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The Toll of Medical Debt on U.S. Workers

The Toll of Medical Debt on U.S. Workers

2.5 minute read

According to a survey of American workers, 37% of employees have medical debt and 32% struggled to pay their medical bills last year. As health care costs rise, so does the number of medical bills sent to collections. While health insurance is intended to help employees cover a portion of their costs, many are still in debt due to high deductibles, out-of-network charges and costs that exceed out-of-pocket maximums.


Why Are Employees Struggling?

Rising health care costs, record-high inflation, and cost-of-living increases are straining employees’ financial reserves. Less than half of Americans have enough savings to cover an unexpected $1,000 expense. One in five Americans have outstanding medical debt. And 60% of these individuals are in debt as a result of a single illness or medical procedure.

While many workers have employer-sponsored health insurance, some plans may not provide employees with adequate financial protections Twenty-six percent of adults with employer-sponsored health plans are considered underinsured and vulnerable to expensive medical bills, according to the Financial Health Network. Individuals who are underinsured are less likely to visit a doctor when they have a medical issue or skip filling needed prescriptions. This can often lead to more costly care down the road for both the employee and employer.

Medical debt can also affect workers’ performance in the workplace. Debt can lead to financial stress, which can cause distractions at work and lead to depression or anxiety. It can also decrease productivity.


How Can Employers Help

Employers can help employees reduce and, in some cases, prevent medical debt. Here are some strategies employers can use:

  • Help employees manage health care costs. Employers can offer benefits and services to aid employees in managing their health care costs like offering a medical savings account to help with out-of-pocket expenses.
  • Survey employees. Employers can survey their workforce anonymously to understand what their financial needs are and then take steps to meet those needs.
  • Tailor health care benefits. Employers can offer benefits that best meet employees’ financial and health care needs. This can be done by offering benefits based on individual financial situations and health care needs.
  • Measure employees’ financial risks. Perform an audit to get a better understanding of employees’ financial risks for large health claims.



Prioritizing employee financial wellness can help employers increase their attraction and retention efforts, as well as help employees improve their financial health and reduce their medical debt. Offering financial well-being benefits that complement and enhance health insurance can help keep their workforce healthy and productive and ensure they’re getting the treatment they need without incurring debt. Download the bulletin for more details.

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National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Scott Fritz

Scott Fritz

Scott Fritz always has a willingness to help others, which has made him an ideal candidate for working in the public sector benefits arena throughout his career. He’s a team player and enjoys strategizing, problem solving, and finding effective cost-saving solutions for his clients. As an Employee Benefit Consultant with National Insurance Services, Scott is responsible for the overall assessment and management of an employer’s benefit plans. He is a licensed insurance agent and works with schools, cities, counties, and community mental health organizations in Michigan and North Carolina.