Health insurance can take away some of the sting of healthcare costs, but it can be much more difficult to pay for those costs if you don’t have insurance. Even with insurance, many necessary healthcare events can involve large out-of-pocket costs.

If healthcare costs get too high for you to comfortably afford, you may look for ways to cover out-of-pocket costs. Some possible options include using a personal loan to cover additional expenses or even a debt consolidation loan to combine multiple debts.

Healthcare costs statistics

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  • In 2021, 29.6 million Americans under age 65 were uninsured.
  • 66.6% of American adults in 2021 ages 18-64 had private health insurance, while 21.7% had public health insurance.
  • 41% of U.S. adults have some form of medical or dental debt.
  • Out-of-pocket spending is estimated to hit roughly $800 billion by 2026.
  • In 2021, the average U.S employee paid $1,669 out-of-pocket before hitting their deductible.
  • On average, U.S employee’s spend 11.6% of their median income on health plan costs.
  • About one in six Americans use personal loans to pay for medical bills.
  • On average, people save $X amount from deductions

How healthcare works

Many Americans, even those with employer-sponsored healthcare coverage, are susceptible to high levels of medical debt. On top of paying a premium each month, the individual must pay a set amount out-of-pocket before the coverage — also known as the deductible — kicks in. While coverage results in lower costs for in-network providers and prescriptions, an unexpected medical bill can take years to pay off.

According to a recent Kaiser Institute survey, 24 percent of adults surveyed said they currently have medical or dental debt they’re unable to pay off. The situation is even worse for uninsured Americans, who often use personal loans or credit cards to finance their expenses.

However, how people finance their medical debt is nuanced and based on factors such as gender, socioeconomic status and race. The KFF survey found that those with a higher income are more likely to take out a personal loan, while those with lower incomes are more likely to borrow the funds from family members or friends.

Financial effects of healthcare

When it comes to Americans with health insurance — both public and private — those aged 65 and over are the population with the most insurance coverage. In contrast, those between the ages of 26 and 34 have the least coverage.

Here are the percentages of Americans with health insurance in 2019, from those who fall in the 0-18 year age range, to individuals 65 years of age and older.

Age % of people insured
0-18 94.3%
19-25 85.3%
26-34 84.0%
35-44 86.1%
45-54 88.6%
55-64 91.5%
65+ 99.2%

When the American Cares Act (ACA) was implemented in 2010, it helped narrow the disparities in health insurance coverage; however, it didn’t eliminate it completely. A 2019 KFF report found that nonelderly people of color are more likely to remain uninsured when compared to their white counterparts.

Here’s how the health coverage disparities play out in the country by race, which the KFF study asserts likely reflects “more limited rates of private coverage among these groups.”

Race % of people covered
White 93%
Black or African American 89%
Hispanic or Latino 80%
American Indian or Alaska Native 78%
Asian 93%
Native Hawaiian or Pacific Islander 88%

People can be uninsured for many reasons, but some of the most common include:

  • They don’t think they can afford health insurance, even with subsidies.
  • Their employer does not offer health insurance and they do not know how to find it from another source.
  • Signing up for insurance can be difficult or confusing.
  • They don’t think they need insurance.
  • They can’t find an insurance plan that meets their needs.

Out-of-pocket healthcare costs

Deciphering all of the out-of-pocket terms and what they mean for your wallet can be confusing, so we’ve broken down the most common terms that you can expect on your next medical bill.

  • Coinsurance: The percentage of the medical costs you pay after meeting your deductible.
  • Copay: A fixed fee you pay when getting in-network healthcare care or prescription medication.
  • Deductible: The amount you need to pay in covered healthcare services out-of-pocket before your insurance begins to pay.
  • Premium: The amount deducted monthly from your paycheck to pay for your insurance. The amount you pay will depend on your employer and the health insurance plan you choose.

The share of healthcare spending in the country is greatly dependent on age and health status. A KFF analysis found that only two percent of people in the U.S. reported being in poor health; however, the numbers change drastically as people age, with 20 percent of those over 65 reporting their health as “fair” or “poor.”

Peterson-KFF’s Health System Tracker found that as of 2019, individuals aged 55 and older hold the largest share of the amount spent on healthcare. Despite only making up 30 percent of the population, this age group accounted for 56 percent of the total health spending.

Age Avg. share of spending
0-18 9%
19-34 12%
35-44 9%
45-54 13%
55-64 21%
65+ 35%

Out-of-pocket spending and costs fell dramatically during the COVID-19 pandemic in 2020. An issue brief composed by the Employee Benefit Research Institute (EBRI) found that costs declined by 12 percent when compared to 2019 costs. Recent studies have found that the average out-of-pocket costs are increasing as people begin seeking regular healthcare again.

Item Cost
Median high percentile cost $3,295
Median cost $205
Prescription drugs $151
Inpatient services $127
Outpatient services $631

Ways to finance-out-pocket costs

While health expenses can be high, you may be able to finance these costs through one or more ways.

A personal loan

People often resort to using personal loans to finance large or unexpected medical bills after discussing all of their payment options with the hospital. Lenders may disburse the funds within a few days of approval, and depending on your credit, the interest rate is often lower than other financing options. However, you’ll be on the hook for years of monthly payments.

Credit cards

If you get hit with a smaller bill that you need immediate funds for, turning to a credit card could be a good way to pay off your medical bills. Keep in mind, though, that financing large amounts on a credit card can lead to significant high interest debt should you not be able to make the monthly payments.

A payment plan

Personalized payment plans are common among doctors, hospitals and other medical providers. These plans break up a larger sum into smaller amounts that are paid off over time. While these plans are ideal for those with smaller bills, consumers with higher medical bills could find themselves with years of large monthly payments.

A HELOC

A home equity line of credit (HELOC) allows homeowners to borrow against the amount of equity they’ve built up in their home. Depending on the amount of wealth you’ve accumulated, taking out a HELOC can help finance high amounts of medical debt. However, you need to keep up with the monthly payments to avoid losing your home.

Frequently asked questions