The Ethics of Medical Debt in the US

With 8% of people in the US in some kind of medical debt, and most of those people owing more than $1000, the American healthcare system clearly has its flaws [1]. Nevertheless, solutions continue to evade our grasp. The task of resolving this issue falls to the “politics” of medicine, which is to say the multitude of theories and attitudes directed towards the legislation of our medical system. Within this scene, the problem of debt proves particularly contentious. The idea that it is justifiable for healthcare to bankrupt patients is almost unilaterally repudiated, but that is about as far as consensus extends. Some people emphasize personal responsibility, others espouse varying degrees of support for government intervention, and still others seek to limit or eliminate medical debt as a whole. However, regardless of political orientation, these views can be boiled down to a few key ethical ideas: justice, equality, and autonomy. 

Before examining the underlying ethical principles, it is important to take a look at the state of the problem today. Across populations and geographic areas, the total medical debt owed at the end of 2021 was estimated to be “at least $220 billion.” [1] This enormous sum accrued in large part due to the American health insurance system, where patients are expected to meet deductibles and copays even with insurance. Additionally, surprise billing and ambiguous pricing can make it challenging to know what is owed. Both factors exacerbate stress and uncertainty in a situation where people are at their most vulnerable, especially for minorities and marginalized populations. Medical debt disproportionately affects people with disabilities, middle aged adults, black people, low income adults, those without health insurance, and rural, Southern communities [1]. As a result, medical expenses are cited as responsible for a striking 66.5% of bankruptcies (from a 2019 study) [2]. Looking at the statistics, one can plainly see why this issue has been garnering national attention—people’s lives and livelihoods are at stake.

Politics and healthcare both pose a host of ethical dilemmas, so it comes as no surprise that their intersection is a hotbed of debate. The first disagreement usually pertains to the role of justice in the American system. Healthcare is a necessity, and it could be argued that people should have equal access to necessities. Nevertheless, hospitals must be equipped with advanced and effective tools, and require funds in order to maintain themselves. Thus, a tension arises: financial resources drive innovation and fuel our healthcare system, but our country has a massive disparity in who possesses those resources. One position maintains that if people have the money to buy better care, they should be entitled to do so: healthcare is a necessity, but we purchase other necessities all the time (houses, food, etc.). In those situations, the rich are allowed access to higher quality goods, so it follows that the system should be consistent. In this sense, the system is “just” because it rewards individual effort and economic contribution. Nevertheless, this same system could also be called unjust because it violates the principle of equality: if all people have a right to medical treatment, then by imposing wealth-based regulation on healthcare many people are denied that right. Those without means disproportionately bear the burden of medical debt, and this translates into other areas of their life, preventing them from accessing business or housing loans. Good health is fundamental to the pursuit of work, and therefore a system which bases healthcare on wealth is cyclical, predatory, and unequal. Moreover, the problem of medical debt calls into question patient autonomy, which states that individuals should be in control of their healthcare decisions. Medical debt often undermines true autonomy by forcing individuals to choose between financial stability and necessary treatment. For example, there are many stories on the internet of people who Uber or rideshare to the hospital rather than taking an ambulance simply because they fear the bill. Autonomy is central to dignity and good patient care, and if people are forced into worse choices about their health simply because they fear being bankrupted by medical debt, their autonomy has been violated. 

In response to the ethical questions raised, politicians have come up with various measures. Shortcomings in insurance coverage increase the likelihood of debt [1], and forms of universal healthcare would combat this. However, opponents worry that it would constitute a sizable burden on the hospital system, worsening quality of care, increasing wait times, and distorting incentives. In addition to expanding coverage, politicians are focusing on ameliorating the negative effects of debt. This past January, the Biden administration finalized a bill to “[prohibit] lenders from considering medical debt when assessing the creditworthiness of borrowers,” but the Trump administration has since placed it on hold [3]. As unpaid medical bills are the “largest source of debt reported to collections agencies,” this could substantially help those with poor credit scores get their lives back after going into medical debt [3]. The unpredictability and urgency of most medical situations means that it is a poor predictor of whether or not people will actually pay back loans, so this new rule affecting lenders attempts to reinterpret how credit worthiness is assessed [3]. While the bill was put on hold by the Trump administration, so were all activities of the Consumer Financial Protection Bureau; in all likelihood, bipartisan support will help enact this rule in the near future. 

The problem of medical debt is both nebulous and perfectly clear. Though disagreements persist about the correct course of action, and the causes resist being pinned down, both sides of the aisle can agree that we need a solution. Perhaps by focusing on the ethical principles which support the broader political movements, we can understand that what seem like opposing stances share common motivations. Both parties wish to preserve justice, equality, and autonomy (in different measures); by recognizing this shared goal, we can shift the discussion to what it really is: a delicate balancing act between financial and ethical responsibility. Yet a consensus must be reached, especially because the privilege—or right—to healthcare is quite literally a question of life and death.

Designed By: Shameema Imam

Edited By: George Nathaniel,

References

[1] Shameek Rakshit, M. R. (2024, February 12). The Burden of Medical Debt in the United States. KFF. https://www.kff.org/health-costs/issue-brief/the-burden-of-medical-debt-in-the-united-states/ 

[2] Himmelstein, D. U., Lawless, R. M., Thorne, D., Foohey, P., & Woolhandler, S. (2019). Medical Bankruptcy: Still Common Despite the Affordable Care Act. American journal of public health, 109(3), 431–433. https://doi.org/10.2105/AJPH.2018.304901

[3] The Federal Rule on Medical Debt. (n.d.). https://www.commonwealthfund.org/publications/explainer/2025/feb/federal-rule-on-medical-debt