Middle-class Americans are saddled with the most medical debt

The middle class was once a symbol of financial security. Not quite anymore.

A new study from Third Way shows that nearly a quarter of American households that earn between $50,000 to $100,000 per year—about 17 families—carried medical debt in 2020.

That's more than any other income bracket.

Seventeen million Americans represent 23.5% of the middle class – compared with 22% of lower-income families carrying medical debt and 12.9% of higher-income Americans.

The research found that Black and Hispanic middle-class families have the highest rates of medical debt. It equally hits those with and without children, and across all education levels.

"Families in the heart of the middle class are more likely to have medical debt than lower-income families despite having higher rates of good insurance coverage," the research found.

"Middle-income families are also less likely than higher-income families to have the disposable income to pay high deductibles and other out-of-pocket costs."

Medical debt by race and education

Compared with their lower and higher-income counterparts, middle-class Black and Hispanic Americans see significantly higher rates of medical debt.

Four million Black middle-class Americans—nearly 40%—carry medical debt, which is 8.5% higher than low-income Black Americans and 16 points higher than high-income Black Americans.

In the Hispanic community, six million middle-class Hispanics—just over 25%—carry medical debt, 5% higher than low-income Hispanics and 7% higher than high-income Hispanics.

20% of White middle-class Americans carry medical debt, which is 1% higher than low-income White Americans and 9% higher than high-income White Americans.

Within the Asian American community, 16% of Asian middle-class families carry medical debt, which is 7% points higher than low-income Asian Americans and 8.4% higher than high-income Asian Americans.

Education has little effect on medical debt levels.

Whether it's a family with a high school diploma, some college, or a bachelor's degree, middle-class American families consistently see a higher rate of medical debt.

The burden is real

How much precisely is owed in medical debt? There's no definite answer, but a few studies offer a hint at the scale.

The Survey of Income and Program Participation (SIPP) tallied up $195 billion in medical debt.

Another report from Health System Tracker found that 16 million Americans owe over $1,000 in medical debt, and three million owe more than $10,000 to the country's hospitals.

The actual figure, however, may be far higher.

The Consumer Financial Protection Bureau (CFPB) estimates that Americans' credit reports reflect $88 billion in medical debt. Although, as CFPB acknowledges, not all medical debt may show up in those reports.

Whatever the actual total may be, it's clear that medical debt is a concern for all income brackets—though none feel it more keenly than the American middle class.