Young people have the most medical debt, study finds

The average size of medical debt is significantly higher for younger people, likely reflecting differences in insurance coverage and financial resources, according to a study released by Health Affairs.

The study — authored by economists at the Federal Reserve Board, Consumer Financial Protection Bureau and American Enterprise Institute — analyzed 2016 credit report data for more than 4 million Americans. It also compared mean medical collections in 2016 to 2011-2015 medical spending.

Researchers found a nearly 40 percent decrease in the average size of patients' medical debt from age 27 to age 64. They said this is likely due to factors such as lack of insurance coverage among younger people, as well as the financial resources of young people compared to their older counterparts.

Although younger people have the most medical debt, medical spending increases with age, according to the study. Researchers said healthcare spending was more than four times higher for people at age 64 than at age of 27. People age 64 reported median annual spending of $3,056, compared to $727 for people age 27.

The study also found insurance coverage rates are less of a contributing factor to the proportion of people with medical debt by age.

Researchers said insurance coverage rates are less of a contributing factor potentially because the size of most medical debt was relatively modest, as more than half of medical collections was less than $600 annually. Therefore, they said, people with typical insurance plans could still incur medical debt.

"Policies that promote insurance coverage for younger adults may have the greatest effect on reducing medical collections," researchers concluded. "However, because most medical debts are relatively modest in size, insurance plans with high deductibles might have only a limited impact. These findings are relevant to a host of policy considerations — particularly with regard to insurance design and regulation."


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