Medical Emergencies Can Lead to Debt and Bankruptcy — Even for Insured Americans

Why It Matters

The research reveals that current private‑insurance structures fail to shield patients from catastrophic costs, signaling urgent policy and market reforms as deductible levels climb and coverage gaps widen.

Key Takeaways

• Private insurance patients face higher post‑injury debt than Medicare
• Medical debt rose 5.2 percentage points after trauma
• Average collections balance increased $290 within 18 months
• Bankruptcy filings grew 3.2 per 1,000 patients post‑injury
• ACA subsidy expiration may boost uninsured rates and debt risk

Pulse Analysis

The study underscores a growing disconnect between health coverage and financial security in the United States. By tracking credit‑report data before and after hospitalization, researchers identified a 24% relative surge in collection accounts and a measurable uptick in bankruptcy filings among trauma survivors. These metrics illuminate how a single health shock can translate into long‑term economic distress, even when patients carry private health plans. The findings arrive at a time when consumer confidence in the health‑care system is already fragile, with two‑thirds of Americans expressing anxiety over medical expenses.

Private‑insurance designs are at the heart of the problem. High‑deductible plans, now averaging over $5,000 for silver marketplace options, require patients to shoulder substantial out‑of‑pocket costs before any insurer contribution. This front‑loaded financial burden leaves many trauma patients unable to pay for urgent care, prompting them to delay treatment or accrue debt that quickly lands in collections. By contrast, Medicare and Medicaid provide caps or minimal cost‑sharing, which the study shows dramatically reduces the likelihood of debt and bankruptcy. Policymakers and insurers must therefore consider income‑based out‑of‑pocket limits or deductible caps to restore the protective intent of health insurance.

The broader policy landscape compounds these challenges. The expiration of enhanced ACA marketplace subsidies at the end of 2025 is projected to push more households into high‑deductible or uninsured status, amplifying the risk of medical‑related financial collapse. Stakeholders—from employers offering health benefits to legislators shaping health reform—must weigh the long‑term economic costs of rising personal bankruptcies against short‑term premium savings. Strengthening consumer protections, expanding subsidy eligibility, or incentivizing value‑based insurance designs could mitigate the debt spiral revealed by the study, preserving both health outcomes and financial stability for Americans facing unexpected injuries.

Medical emergencies can lead to debt and bankruptcy — even for insured Americans

Annie Nova · Published Thu, Feb 12 2026 10:56 AM EST · Updated Thu, Feb 12 2026 12:15 PM EST

Key Points

• Being hospitalized for an injury (e.g., a car accident or fall) raises the risk of medical debt and bankruptcy, according to a new study in Health Affairs.

• Patients with private insurance were more vulnerable to these financial consequences than those covered by Medicare or Medicaid.

• The expiration of enhanced Affordable Care Act (ACA) marketplace subsidies is expected to increase the number of uninsured Americans and those with higher deductibles before coverage begins.

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Even Americans who have health insurance can emerge from medical emergencies with lasting financial scars.

In a study published this month in the journal Health Affairs, researchers found that 18 months after being hospitalized for a traumatic injury (such as a car accident or fall), the share of patients with medical debt in collections rose 5.2 percentage points – a 24 % relative increase compared with the period before the emergency. During the same post‑injury window, the average balance in collections grew by $290, and 1 in 10 indebted patients owed more than $4,480.

Bankruptcy filings also rose, increasing by 3.2 per 1,000 patients (a 6 % relative rise) about 15 months after injury.

“This work grew out of my clinical experience as a trauma surgeon and seeing acutely injured patients shouting at us to stop care because they’re worried about the bill,” said co‑author Dr. John Scott, associate professor of surgery at the University of Washington.

The researchers examined credit‑report data for nearly 13,000 trauma patients from one year before to 18 months after hospitalization (data spanning 2018‑2021). 98 % of the cohort had health‑insurance coverage.

“Insurance reduces the risk of financial catastrophe, but the way private plans are currently designed still leaves many people heavily exposed when something serious happens,” Scott added.

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Patients can incur debt before insurance kicks in

While the ACA expanded coverage to millions, many private plans carry high deductibles that require patients to pay thousands of dollars before insurance benefits begin. In 2026, the average marketplace deductible was $5,304 for a silver plan and $7,186 for a bronze plan (KFF).

“An unexpected injury can mean thousands of dollars in out‑of‑pocket costs before insurance pays a dime,” Scott said.

Caitlin Donovan, senior director at the National Patient Advocate Foundation, called the study’s findings “disturbing,” noting the “utter failure of private insurance to protect people from debt and bankruptcy.” She urged stronger protections, such as limiting deductibles or income‑based caps on out‑of‑pocket spending.

Trauma patients on Medicare and Medicaid experienced far smaller changes in medical debt and bankruptcy. This is likely because Medicaid has minimal out‑of‑pocket costs, and Medicare expenses are often capped.

“If insurance is supposed to protect you from financial ruin after a health shock, Medicaid did its job,” Scott said. “Private insurance, for many people, did not.”

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The study’s findings arrive amid growing concerns over health‑care costs. A recent KFF poll found that two‑thirds (66 %) of Americans are worried about paying for health care, more than concerns about utilities, food, or housing.

Legislators allowed the enhanced ACA marketplace subsidies to expire at the end of 2025, a move expected to increase the number of uninsured and push more people into plans with higher deductibles before coverage takes effect.

“If people are pushed into thinner coverage or out of coverage entirely, those numbers will only get worse,” Scott warned.