Insurance gaps and medical debt are creating financial instability for American families
The financial stability of millions of Americans is increasingly threatened by the escalating costs of healthcare, significant gaps in insurance coverage, and the pervasive burden of medical debt. There is a deepening crisis in healthcare affordability, and particularly a disproportionate impact on low-income households and those with subprime credit.
Insurance coverage disparities
A record number of Americans – nearly 29 million – say they can’t afford to pay for healthcare. A West Health-Gallup study classified these people as "cost desperate."1 This classification includes adults earning less than $24,000, making access to essential care or vital medications a struggle.
While efforts to expand health insurance coverage have seen improvements, disparities persist for low-income families. The Kaiser Family Foundation, a health policy organization, found that nearly 10% of individuals under age 65 were uninsured in 2023.2 Many don’t have access to coverage through their jobs or face barriers to gaining access to Medicaid.2 This means many are without the support they need to manage rising healthcare expenses.
The hidden crisis of underinsurance
Beyond the uninsured is the often-overlooked issue of underinsurance — when someone has insurance, but the policy isn’t enough to cover expenses. The Commonwealth Fund's 2024 Biennial Survey reveals that in 2023, nearly one in four adults in the U.S. were underinsured.
Because of the lack of coverage, these individuals often skipped or delayed needed medical care and/or had medical debt they were paying off over time.3 Underinsurance can lead to worsening health problems due to delayed or no treatment, which can lead to higher medical risk and costlier treatments.
The rise of medical credit and the debt trap
When traditional insurance isn’t enough to cover full claims expenses, a growing number of Americans are resorting to financial products to cover medical costs. The Consumer Financial Protection Bureau has raised concerns about the surge in the use of medical credit cards and loans, particularly among those already struggling. These financial tools often come with high interest rates, deferred interest clauses, and aggressive repayment terms.4 For already vulnerable families, this could create a dangerous debt trap — transforming medical needs into long-term financial burdens. A record 12% of U.S. adults report borrowing money last year to pay for healthcare.2
How credit unions can help
Credit unions, guided by the philosophy of “people helping people,” are uniquely positioned to support their members during these moments of financial vulnerability. Financial guidance and coverage to fill the gaps and protect finances can help members cover needed healthcare and may help avoid financial hardships.
Your trusted partner
Securian Financial offers a robust suite of insurance products designed to help protect individuals and families from the often-catastrophic financial impact of medical expenses and lost income. Learn about how we can help.
