Study Finds Private Insurance Leaves Patients at Risk of Medical Debt and Bankruptcy

Hospitalization for injuries can lead to financial ruin even for insured Americans, according to new research from the University of Washington.

Published on Feb. 15, 2026

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A new study from the University of Washington has found that even with health insurance, a hospital stay following an injury can leave Americans vulnerable to significant medical debt and even bankruptcy. The research reveals that it's not necessarily the lowest-income individuals who are most at risk, but rather working-class and working-age families with private insurance. The study examined the financial repercussions of hospitalization for traumatic injuries, analyzing credit reports of nearly 13,000 patients over an 18-month period.

Why it matters

The findings highlight a systemic vulnerability within the U.S. healthcare system, where individuals with private insurance can face lasting financial consequences from medical emergencies. The issue of healthcare debt in the United States is not new, but the study underscores the profound impact it can have on physical and mental well-being, contributing to increased stress and anxiety. The long-term health consequences of delaying care due to financial concerns represent a significant public health challenge that demands attention and innovative solutions.

The details

The UW study found a 5.2 percentage point increase in the share of patients with medical debt in collections following a hospital stay for injury – a 24% relative increase. The average balance in collections also rose by $290, and 1 in 10 patients found themselves owing more than $4,480. The study also found a 6% relative increase in bankruptcy filings – 3.2 per 1,000 patients – approximately 15 months after the initial injury. Researchers noted that the reason lies in the protections offered by Medicaid, which does a better job of shielding people from high out-of-pocket payments compared to private insurance.

  • The data was collected between 2018 and 2021.
  • The study examined credit reports of nearly 13,000 patients over an 18-month period, spanning from one year before hospitalization to 18 months after.

The players

Dr. John W. Scott

A surgeon at UW Medicine and co-author of the study.

University of Washington

The institution that conducted the research on the financial repercussions of hospitalization for traumatic injuries.

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What they’re saying

“We weren't surprised to see that an injury like a car crash or a fall that gets hospitalized results in increases in medical debt and bankruptcy.”

— Dr. John W. Scott, Surgeon at UW Medicine and co-author of the study

“Medicaid does its job protecting people from high out-of-pocket payments.”

— Dr. John W. Scott, Surgeon at UW Medicine and co-author of the study

“It's bad to have medical debt, it's bad for bankruptcy. But what gets me interested as a physician is the impact on people's health.”

— Dr. John W. Scott, Surgeon at UW Medicine and co-author of the study

What’s next

Lawmakers in Washington state are currently working on legislation to address the issue of medical debt interest rates, proposing to reduce the permissible interest rate on medical debt from 9% to 1%. This proposed change aims to alleviate some of the financial burden faced by individuals struggling with medical expenses.

The takeaway

The UW study and ongoing legislative efforts bring into sharp focus the need for broader systemic changes to protect Americans from the financial devastation that can accompany medical emergencies. While Medicaid provides a safety net for some, the findings suggest that those with private insurance require additional safeguards to prevent crippling debt and ensure access to ongoing care.