One hundred million Americans, roughly 41 percent of all adults, are currently carrying medical debt. Together they owe at least $220 billion. The United States spends more on healthcare per person than any other wealthy nation, $14,885 per capita in 2024, nearly twice what Switzerland spends and more than double the wealthy-country average of $7,371. For that price, a country might expect universal coverage, low drug costs, and financial protection when someone gets sick. Instead, it gets the world's leading generator of medical bankruptcy.
The Price Tag Everyone Pays, and the Protection Nobody Gets
Prescription drugs are a useful measure of the gap between what Americans are charged and what the market actually requires. A 2024 RAND study found U.S. drug prices across all medications average 2.78 times what the same drugs cost in comparable countries. For brand-name drugs, the markup is at least 3.22 times. A May 2026 AARP analysis tracked the 25 top-selling brand-name drugs over their market lifetimes: prices rose an average of 81 percent after entering the U.S. market. In 19 comparable high-income countries, the prices for the same drugs fell an average of 13 percent over the same period. Those 25 drugs alone accounted for more than $100 billion in Medicare spending in 2024 and were used by nearly 15 million Medicare beneficiaries.
Health insurance does not automatically shield people from these costs. In 2026, the average deductible on a silver-tier marketplace plan is $5,304. A bronze plan requires $7,186 before coverage kicks in. A typical emergency room visit, a hospitalization, a cancer diagnosis: any of these can consume an entire annual deductible within days, pushing the bill onto credit cards, personal loans, or family members. Research by the Consumer Bankruptcy Project finds that 66.5 percent of all U.S. personal bankruptcies are linked to medical costs or missed work due to illness. For the 12-month period ending March 31, 2026, U.S. bankruptcy filings rose to 591,850, an 11.9 percent increase from the prior year.
The Consumer Financial Protection Bureau finalized a rule in early 2025 to remove medical debt from credit reports, a change that would have given tens of millions of Americans a path toward clearing a mark that follows them through loan applications and job screenings. A federal court vacated that rule in July 2025, finding it exceeded the agency's statutory authority. As of 2026 the protection is gone, and the CFPB has since issued guidance declaring that the Fair Credit Reporting Act preempts state-level protections in roughly 15 states that had tried to fill the gap.
The Bill That Arrived After the Debt Did
Against that backdrop, Congress passed and President Trump signed the One Big Beautiful Bill Act on July 4, 2025. The Congressional Budget Office estimates the law cuts federal Medicaid and CHIP spending by $1.02 trillion over the next decade and will reduce enrollment by at least 10.5 million to 11.8 million people by 2034. The Center on Budget and Policy Priorities puts the total uninsured increase at roughly 15 million when ACA marketplace cuts and the expiration of enhanced premium tax credits are included. Three in 10 young adults on Medicaid are now at risk of losing coverage, according to the Urban Institute.
The mechanism is paperwork. Starting in 2027, Medicaid expansion enrollees must document 80 hours per month of work, community service, or education to remain enrolled. Nebraska began implementing the requirement in May 2026. Research on earlier state-level work requirement experiments consistently shows the main effect is disenrollment among people who are already working or exempt but cannot navigate the documentation process, not an increase in employment. The CBO's own analysis expects more than 5 million people to lose insurance with little or no increase in the employment rate.
"Prices for the 25 top-selling brand-name prescription drugs increased an average of 81 percent after entering the U.S. market. In 19 comparable high-income countries, the prices for the same drugs fell an average of 13 percent over the same period." (AARP Rx Price Watch, May 2026)
What the Countries With Lower Costs Actually Do
No command-economy health system has solved this problem. The Soviet model collapsed under corruption and resource misallocation. Cuba's primary care survives on scarcity of inputs. Venezuela's system, once held up as a model, deteriorated when price controls and political capture removed every incentive to invest in equipment, training, or drugs. The lesson is that markets are relevant to healthcare, but only under conditions that do not currently exist in the United States: transparent pricing, genuine competition, and the ability for buyers to walk away. An emergency room does not offer those conditions. Neither does an insulin prescription when the alternative is a coma.
The countries that combine lower costs with better outcomes, Canada, Germany, France, Japan, and the Netherlands, all use regulated private markets with mandatory coverage, government negotiation of drug prices, and a public backstop that prevents a cancer diagnosis from simultaneously constituting a financial emergency. The Inflation Reduction Act gave Medicare the right to negotiate drug prices for the first time in history, and the first 10 drugs negotiated under that authority saw price reductions that took effect January 1, 2026. The One Big Beautiful Bill does not repeal that authority. It does guarantee that 11.8 million fewer people will be enrolled in coverage when the next medical crisis finds them.
The United States already pays the most per person. The system already drives personal bankruptcy at rates no peer nation accepts as normal. Cutting the coverage rolls by 11.8 million does not lower total costs. It shifts who absorbs them, off a federal ledger and onto families who will borrow, skip doses, and file for bankruptcy to cover the gap.
Sources
- KFF Health News: 100 Million People in America Are Saddled With Health Care Debt
- Peterson-KFF Health System Tracker: The Burden of Medical Debt in the United States
- Peterson-KFF Health System Tracker: How Does Health Spending in the U.S. Compare to Other Countries?
- RAND: Prescription Drug Prices in the U.S. Are 2.78 Times Those in Other Countries
- AARP: New AARP Report Finds Prescription Drug Prices Continue to Rise After Market Entry While Falling in Similar Countries (May 2026)
- Center on Budget and Policy Priorities: By the Numbers: Harmful Republican Megabill Will Take Health Coverage Away From Millions of People
- American Medical Association: Changes to Medicaid, the ACA and Other Key Provisions of the One Big Beautiful Bill Act
- CNBC: Medical Emergencies Can Lead to Debt and Bankruptcy, Even for Insured Americans
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