Medical debt doesn’t care if you were just in a car wreck, dealing with a high-risk pregnancy, or got hit with a surprise ER visit. It shows up, often out of nowhere, and it sticks around.
Across the country, more than 100 million adults — that’s roughly 4 in 10 — are currently saddled with some form of medical or dental debt. In Texas, it’s worse. A 2022 report from the Urban Institute estimated that around 22% of Texans had medical debt in collections, significantly higher than the national average.
And here’s the thing: a lot of this debt isn’t massive. It’s often under $2,500. But when you’re living paycheck to paycheck — and nearly 60% of those with medical debt say they’ve had to cut back on food or clothing to make payments — even a few hundred bucks can tip the scales.
How Did We Get Here?
It’s Not Just the Uninsured
Sure, Texas has the highest rate of uninsured residents in the country. As of 2023, nearly 17% of Texans had no health insurance at all — a stubbornly high number. But even folks with insurance still get hammered with medical debt.
High deductibles, limited networks, and steep out-of-pocket costs are doing damage. A lot of people think they’re covered until the bill shows up and says otherwise.
Hospitals Aren’t Making It Easier
Another issue? The lack of consistent financial assistance. Nonprofit hospitals are supposed to offer some form of charity care — basically, discounted or free services for low-income patients — in exchange for those juicy tax exemptions. But for-profit hospitals? Not required.
Even among nonprofit hospitals, Texas doesn’t have any laws that force them to meet specific financial assistance standards. It’s more of a suggestion than a rule.
What Texas Is (and Isn’t) Doing
Let’s look at how Texas stacks up on a few major fronts when it comes to protecting patients from medical debt.
Financial Assistance Policies
- Federal baseline: Nonprofit hospitals must have a financial assistance policy. That’s about it.
- Texas: No statewide law requires hospitals to offer financial aid. There’s no minimum standard, no required eligibility rules, and no enforcement mechanism. It’s up to each hospital.
Compare that to places like Illinois or New Jersey, where laws require hospitals to offer financial assistance based on income and other factors. In Texas, you’re mostly on your own.
Billing and Collections
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Texas also falls short here. The state does not have:
- A required waiting period before sending a bill to collections
- Caps on the interest charged for medical debt
- Strong rules limiting how aggressively debt collectors can be
And if you can’t pay? Creditors in Texas can take you to court. They might garnish your wages, freeze your bank account, or — in rare but real cases — go after your home.
One bright spot: Texas law does provide homestead protections, which can make it harder for creditors to force a sale of your primary residence. But don’t count on that keeping collectors off your back. Legal threats and wage garnishments are still on the table.
Community Benefits
Nonprofit hospitals are supposed to give back to the community in exchange for tax breaks. In some states, that means providing a certain percentage of their budget to charity care or other local programs.
- Texas? It’s got community benefit standards, but they’re vague. There’s no required minimum spending, and little oversight on how the money gets used.
So, hospitals might be technically checking the box, but are they helping the people who need it most? That’s up for debate.
Who’s Getting Hit the Hardest?
Medical debt doesn’t hit everyone equally. In Texas, as in the rest of the country, some groups carry more of the burden.
- Black and Hispanic residents: More likely to be uninsured, more likely to be sued over medical bills.
- Women are more likely to cut back on basic needs or dip into savings to pay down debt.
- Low-income families: Already juggling rent, food, gas, and childcare, medical debt is often the final straw.
- People with chronic conditions or disabilities face ongoing, often expensive care that insurance doesn’t always cover.
And for undocumented residents? Forget about accessing financial assistance — most hospitals won’t provide it unless explicitly required, which Texas doesn’t do.
A National Patchwork
Across the U.S., protections vary wildly from one state to another. Here’s how Texas compares to a few peers:
| State | Financial Assistance Required? | Billing Rules? | Community Benefit Oversight? |
| California | Yes (includes for-profits) | Strong rules on collections | Active enforcement |
| New York | Yes (nonprofit-focused) | Some billing protections | Moderate oversight |
| Texas | No | Minimal protections | Weak enforcement |
| Illinois | Yes (based on income) | Limits on interest | Must match tax savings |
| Washington State | Yes | Uniform application required | Moderate enforcement |
And It’s Not Just the Bills
Once debt gets sold to collections, the damage deepens. Your credit score can take a hit, sometimes for years, affecting your ability to rent, get a loan, or even apply for a job.
The SingleCare offers stats about how widespread and damaging medical debt has become. About 1 in 6 Americans with credit reports have medical debt in collections, and over 60% say it negatively affected their mental health. And that’s on top of the physical health problems that caused the debt in the first place.
So, What Could Texas Do Better?
Let’s keep it simple. If state leaders want to reduce medical debt, not just talk about it, here’s what they coulddoc:
1. Set a Floor for Financial Assistance
Require all hospitals, including for-profit ones, to provide financial assistance to low-income patients. Define who qualifies and make the application process simple.
2. Crack Down on Aggressive Collections
Ban certain types of legal actions, like wage garnishment or liens for medical debt. Require a longer waiting period and mandatory notifications before collections.
3. Limit Interest Rates
No one should be paying 20% interest on a hospital bill. Cap the rate, especially for patients under a certain income level.
4. Mandate Transparency
Hospitals should be reporting how much they spend on charity care versus what they get in tax breaks. If they’re falling short, hold them accountable.
5. Expand Medicaid
Texas is one of the few states that hasn’t expanded Medicaid under the Affordable Care Act. That decision alone leaves over a million people in the “coverage gap” — not poor enough for current Medicaid, but too poor for ACA subsidies.
Final Thought: Debt Shouldn’t Be the Cost of Staying Alive
Medical debt isn’t just about numbers on a bill. It’s skipped doctor’s appointments. It’s sleeping in your car because you lost your apartment. It’s crying in a pharmacy line because your copay wiped out your last twenty bucks.
Texas has the tools to do better. Other states are doing better. What’s missing is the will.
Until then, Texans will keep getting crushed by bills they never saw coming, for care they couldn’t afford, in a system that offers too little help too late.
Let’s be real: health care might be complicated, but protecting people from financial ruin? That shouldn’t be.
