Supplemental Benefits Help Avoid Medical Debt
Jul 25, 2025
Supplemental Benefits Help Avoid Medical Debt
Jul 25, 2025
Americans young and old continue to struggle with medical debt. This debt can delay or derail plans to build up financial protection, such as saving for a down payment on a house, raising children or paying off student loans. Before they even apply for a mortgage, many Americans have medical debt.
According to the Kaiser Family Foundation (KFF), Americans owe a total of $220 billion in medical debt, including 14 million people who owe more than $1,000. Medical debt affects men and women across all age groups, but not equally. Women between 50-64 are twice as likely to borrow to pay for medical expenses compared to men in the same age group. Also, the KFF found that medical debt disproportionately hits those with the lowest incomes, with about one in 10 adults with incomes below 400 percent of the federal poverty level holding such debt.
Fortunately, voluntary and supplemental benefits like accident, critical illness, and hospital indemnity insurance help offset out-of-pocket costs that major medical insurance does not cover. These voluntary benefits can help prevent the accumulation of medical debt, giving Americans an opportunity to use that money for future financial needs and savings. These products are very popular, especially with middle-income workers that struggle to pay medical out of pocket costs. More and more employers are adding these types of insurance to their employee benefits packages because they help with employee retention and financial wellbeing.
At a time when concerns are rising about the impact of uncompensated care on community hospitals and the rapidly rising cost of health care and its toll on household budgets, policymakers should do everything they can to protect the availability of these important and protective benefits.
Nicholas Silano
Nicholas Silano is an ACLI intern who is attending Florida Atlantic University.
Ian Trepanier
Ian Trepanier serves as Policy Director, Supplemental Benefits and Group Insurance for the American Council of Life Insurers. In this capacity, he supports industry initiatives to expand access to supplemental insurance products that provide important financial protection for workers and families. Previously, Ian worked in regulatory and government affairs for Global Atlantic Financial Group, and was a policy analyst at ACLI and the American Academy of Actuaries.
