Medical Bankruptcy Statistics: 7 Numbers for 2026

Anyone searching for medical bankruptcy statistics runs into two numbers that seem to contradict each other. One says two-thirds of bankruptcies are medical. The other says four percent. Both come from peer-reviewed research. Both are cited in Congress. Understanding why they differ tells you more about how illness wrecks a household budget than either figure does on its own.

This article lays out the seven numbers that matter, explains the two studies behind the headline fight, and shows what both of them leave out.

Medical bankruptcy statistics: what share of filings are medical?

The two-thirds figure comes from David Himmelstein, Steffie Woolhandler, and colleagues, published in the American Journal of Public Health in 2019. They surveyed about 900 people who filed for bankruptcy between 2013 and 2016 and asked what contributed. About 58% cited medical bills directly. About 44% cited income lost to illness. Combined, 66.5% named at least one. The authors scaled that to roughly 530,000 families a year.

The four percent figure comes from Carlos Dobkin, Amy Finkelstein, Raymond Kluender, and Matthew Notowidigdo, published in the American Economic Review in 2018. Instead of asking filers, they matched California hospital admission records to credit reports and bankruptcy filings for adults under 65. They measured what a hospitalization did to a person's finances over the following years, compared to a similar person who was not hospitalized. Their answer: hospitalizations caused about 4% of bankruptcies among non-elderly adults.

The gap comes from the definition. Ask a person drowning in three kinds of debt whether the $9,000 hospital bill contributed and they will say yes. Trace which single event pushed them over the edge and the hospital stay may not be it. Illness is a factor in most filings and the sole cause of a minority. The honest reading of both studies is that a medical event is one of the most common shoves toward insolvency, and rarely the only one.

How many people file for bankruptcy each year?

Fewer than a decade ago, but still hundreds of thousands. The Administrative Office of the U.S. Courts recorded roughly 434,000 non-business bankruptcy filings in calendar 2023 and close to 500,000 in 2024, a rise of about 14%. Filings peaked above 1.5 million in 2010 after the financial crisis, then fell through the pandemic as stimulus checks and paused collections kept people afloat. The 2024 increase is the first sustained climb since.

Filings understate the problem. Chapter 7 requires a filing fee near $340 plus attorney costs that commonly run $1,000 to $2,000. People who cannot afford to go broke in court simply stop paying, and their debt lives on in collections. Researchers at the Federal Reserve Bank of New York and the Consumer Financial Protection Bureau have documented this pattern for years: the poorest households with medical debt are the least likely to appear in bankruptcy data.

How much medical debt sits behind the filings?

Seven numbers set the scale.

Two more numbers round out the seven. KFF's 2022 survey found about 1 in 4 adults with health care debt owed more than $5,000, and about 1 in 8 owed more than $10,000. The Commonwealth Fund's 2024 survey found 23% of insured working-age adults were underinsured, meaning their plan left them exposed to costs above 10% of income, or a deductible above 5% of income.

That last figure is the bridge between the debt data and the bankruptcy data. Most people who end up in bankruptcy court with medical debt had an insurance card in their wallet when the bills arrived.

Why does insurance not prevent medical bankruptcy?

Because a modern American health plan is built to shift cost to the patient, and a serious illness triggers all of it at once.

Start with the deductible. KFF's 2024 Employer Health Benefits Survey put the average single deductible above $1,700, and family deductibles in high-deductible plans routinely exceed $3,000 to $5,000. Then the out-of-pocket maximum, which federal rules capped near $9,450 for an individual and $18,900 for a family in 2025 marketplace plans. A household earning the median income of about $80,000 (U.S. Census Bureau, 2023) that hits a family maximum has lost nearly a quarter of a year's pay before taxes, on top of a premium share near $6,000.

Now add the second blow the Himmelstein survey captured and the Dobkin study measured directly: lost income. Dobkin and colleagues found hospitalized adults under 65 saw earnings drop by roughly 20% in the years after admission, and that the income loss did more financial damage than the medical bills. Only about 40% of private-sector workers have access to short-term disability coverage through an employer (BLS, National Compensation Survey). The rest absorb the lost paychecks themselves.

The math of a typical filing looks like this: $8,000 in hospital bills, three months without wages, a credit card carrying the difference at 24% interest, and a landlord who does not accept a diagnosis as rent. The bankruptcy petition lists all four. The survey researcher counts it as medical. The economist counts it as an income shock. The family counts it as the month everything ended.

Who is most likely to face medical bankruptcy?

The demographic pattern is consistent across KFF, Census, and CFPB data. Adults ages 35 to 64 carry the most medical debt, because they are old enough to get sick and too young for Medicare. Black adults are more likely to carry medical debt than white adults. Households in the South, and in the states that declined Medicaid expansion, show the highest rates of medical debt in collections, per the Urban Institute's county-level analysis. Adults with a disability or a chronic condition are more than twice as likely to hold medical debt as those without.

Income matters, but not the way people assume. The very poor are less likely to file for bankruptcy because they cannot afford the process. Middle-income households, with enough assets to protect and enough credit to run up, are the most common filers. Medical bankruptcy is a middle-class event.

For the mechanics of what happens when bills go unpaid, read what happens if you don't pay medical bills. For the personal side of the story, the earlier FFLW piece on medical bankruptcy walks through a single household's collapse. For the size of the debt itself, see how many Americans have medical debt, and the cluster pillar on medical debt in America.

Does medical bankruptcy happen in other countries?

Almost never. Canada, Germany, France, Japan, and the United Kingdom each spend roughly half what the United States spends per person on health care, according to the OECD, and none of them has a research literature on medical bankruptcy because the phenomenon is too rare to study. Universal coverage plus regulated prices plus paid sick leave removes all three legs of the American trap: the bill, the lost wages, and the uninsured gap.

That is the systemic answer the two-thirds-versus-four-percent debate obscures. Argue about the attribution method all you like; no other wealthy nation needs the argument. The United States built a health system where sellers set prices, insurers shift cost to patients, and employers are the main source of both coverage and income, so a single illness can remove both at once. The wage that took twenty years to build disappears in a quarter. Medical bankruptcy is an affordability statistic, and it belongs in the same column as rent, childcare, and the rest of the broken American Dream.