Household economic security and medical debt onset: Lessons from the COVID-19 pandemic

To examine how household medical debt responds to changes in income and new health events.

Secondary analysis of a panel survey.

We analyzed data from 6,599 households in the 2019-2021 waves of the nationally representative US Panel Study of Income Dynamics (PSID) with no medical debt in 2019. We focus on the onset of unpaid medical bills, classifying debt ≥20 % of annual income as high burden and <20 % as low or medium. Using logistic regression, we estimate the impact of changes in household income and onset of chronic conditions on acquiring medical debt.

In our analytic sample, 4.4 % of households experienced the onset of low or medium medical debt, and 1.2 % experienced the onset of high medical debt between the 2019 and 2020 waves of the PSID. Pandemic-related earnings loss increased high medical debt onset by 1.1 percentage points (95 % confidence intervals [95 % CI: 0.2 to 1.9]). The onset of low or medium medical debt rose by 3.4 percentage points (95 % CI: 0.4 to 6.4) among households in which the head or spouse received a new diabetes diagnosis, and by 3.5 percentage points (95 % CI: 1.4 to 5.6) among households with a new arthritis diagnosis. High medical debt onset increased by 1.8 percentage points (95 % CI: 0.2 to 3.3) in households with a new cancer diagnosis.

Unexpected earnings losses and new diagnoses of cancer, diabetes, and arthritis significantly increase the risk of medical debt onset.