A new state report shows that medical debt remains widespread in Massachusetts, even though nearly all residents have health insurance coverage. The findings reveal that one in eight residents carries family medical debt, highlighting the financial strain that persists despite the state’s efforts to expand coverage.
The Center for Health Information and Analysis, an independent state agency, released the findings this week. According to the report, 88% of residents with medical debt had insurance at the time their families incurred the expenses. This shows that coverage does not always protect against financial hardship. Families who went without continuous coverage for 12 months were almost twice as likely to have medical debt compared to those who maintained insurance all year.
The report arrives as federal lawmakers debate whether to extend enhanced premium tax credits under the Affordable Care Act before they expire on December 31. Without an extension, more than 337,000 Massachusetts residents will see higher health insurance premiums in 2026. A separate analysis from the Kaiser Family Foundation projects that base premiums nationwide will rise an average of 26% next year.
The impact of medical debt reaches beyond hospital bills. The report found that it can lead families to skip necessary care, experience food insecurity, or struggle with rent and housing costs. Many households also drain their savings, borrow from retirement funds, or face debt collection.
Rising costs under high-deductible health plans have contributed to the problem. The share of residents enrolled in such plans grew from 21% in 2015 to 45% in 2023. These plans lower monthly premiums but increase out-of-pocket costs when care is needed. Deductibles, copays, and costs for services not covered by insurance were the main drivers of reported debt.
Medical debt also affects some groups more than others. About 21% of Black residents in Massachusetts reported medical debt, compared with 14% of White residents. Families earning between 139% and 500% of the federal poverty level were more likely to face debt than lower-income families covered by MassHealth, which eliminates copays and cost-sharing for its members.
Lora Pellegrini, president and CEO of the Massachusetts Association of Health Plans, said the findings reflect a broader affordability crisis in health care. She pointed to high provider prices, prescription drug costs, billing practices, and income inequality as key contributors.
“Solving this will require addressing the real drivers of health care costs,” Pellegrini said, “so that care stays affordable for all Massachusetts residents.”
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