Lima, Ohio – Medical debt impacted one in four Americans and one in five Ohioans last year, according to new research, a burden that affects even those with health insurance. A recent study by the Urban Institute, supported by the Robert Wood Johnson Foundation, found that over a quarter of American adults reported medical debt for themselves or a family member in 2025. More than half of these individuals owed at least $1,000. Of those reporting debt, 26% were adults who had current health insurance.
Katherine Hempstead, a senior policy officer for the Robert Wood Johnson Foundation, stated in a press release announcing the study that health insurance does not protect people from rising healthcare costs and the significant burden of medical debt. She added that historic cost increases and coverage losses are forcing difficult choices between healthcare and other basic needs.
Researchers at the Health Policy Institute of Ohio (HPIO) have also examined medical debt and its effects on families and overall health outcomes within the state. Brian O’Rourke, an HPIO researcher, told the Capital Journal that while being uninsured is a major risk for medical debt, recent data in Ohio indicates this problem extends beyond the uninsured population. Citing the Ohio Medicaid Assessment Survey, O’Rourke noted that over one in five Ohio adults struggled to pay medical bills in the last year. This included a quarter of Ohioans with private insurance who also faced difficulties.
The Urban Institute study further revealed that hospital services were the largest source of reported debt, with 52% of adults citing hospital costs. Debts also stemmed from specialist visits, dental care, and general doctor services. The study identified adults aged 45 to 54 as the largest population grappling with medical debt, though 17.6% of Medicare participants also reported owing medical debt.
O’Rourke highlighted that out-of-pocket medical spending represents “a significant burden in Ohio,” with the average family’s spending in the state exceeding the national average. Both the Urban Institute study and HPIO research anticipate worsening medical debt due to rising health insurance costs and forthcoming changes to Medicaid and Affordable Care Act (ACA) policies.
HPIO has released research detailing potential impacts from federal budget cuts, known as the One Big Beautiful Bill Act, and reduced subsidies for the ACA. Ohio’s ACA Marketplace population has already decreased by 100,000, and HPIO projects that as many as 300,000 Medicaid participants could be dropped due to newly imposed work requirements. O’Rourke warned this would likely leave many uninsured and with limited resources to pay off medical bills. The Urban Institute’s Michael Karpman affirmed that the analysis shows medical debt is widespread, affecting adults across various age groups, income levels, and both insured and uninsured populations. Karpman stressed the importance of monitoring how the burden of medical debt shifts as policies restricting access to Medicaid and ACA Marketplace coverage take effect.
Increased uninsured populations and higher medical debt place strain on households and could affect healthcare providers, particularly in rural or underserved areas, O’Rourke explained to the Capital Journal. He warned that more uncompensated care could lead to closures and potentially raise healthcare prices further in the state.
In response to these challenges, the Ohio legislature is considering a bipartisan measure to address medical debt. Ohio House Bill 257 was introduced in May 2025 by Rep. Michele Grim (D-Toledo) and Rep. Jean Schmidt (R-Loveland). The proposed bill aims to cap the interest rate for medical debt at 3% annually, prevent methods like wage collection to pay bills, and bar healthcare providers or collections agencies from reporting nonpayment of medical debt to consumer reporting agencies.
The bill has undergone several hearings in the Ohio House Health Committee and has received support from various organizations, including the American Lung Association, the American Cancer Society Cancer Action Network, and the American Diabetes Association. Gary Dougherty, director of state government affairs for the American Diabetes Association, testified in June to the House Health Committee that medical debt has been reported as a key factor for patients delaying care or not filling prescriptions. He added that for individuals with diabetes, it is critical to remove financial barriers that might cause them to forgo necessary care.
However, groups such as the Consumer Data Industry Association and the Association of Credit and Collection Professionals have spoken against the bill. They argue that the measure would take an overly broad approach to limiting medical billing and collection practices, which could lead to unintended negative consequences for Ohio consumers and providers of medical services.
House Bill 257 must pass through the General Assembly by December; otherwise, it will need to be reintroduced in the new year when a new two-year General Assembly term begins.
