33% of Americans Can't Pay a $500 Medical Bill (Much Less Buy Gifts This Year)

Mounting medical expenses are putting a strain on the holiday season for one-third of Americans.
Updated July 18, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

A recent AccessOne survey showed that 33% of respondents are not confident they can pay a medical bill of $500 or more. This alarming statistic sheds light on the immediate financial challenges average Americans face and raises questions about the broader implications as we enter the holiday season and move into the new year — 2024 might be a struggle for consumers, especially if they are unable to stop throwing money away now.

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today”
  • Create your account (important!) by answering a few simple questions
  • Start enjoying your discounts and perks!

Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.

Become an AARP member now

33% can't pay a medical bill of $500

The AccessOne survey reveals a stark reality — nearly one-third of the surveyed individuals find themselves unequipped to handle a medical bill totaling $500 or more, answering they were “not confident at all” in the task. Some respondents dip into personal savings to handle the bills to supplement their income, and 32% use their personal credit cards to cover bills.

This can have a huge impact on finances for both short- and long-term goals for families across the country. It becomes even more troublesome during the holidays, especially if anything goes wrong medically, as families tend to spend more than they can afford this time of year. It's extremely difficult to do as more high-earners than ever report the need to stop living paycheck-to-paycheck.

Impact on finances this time of year

As we enter the holiday season, healthcare bills add an extra layer of stress to individuals already grappling with seasonal expenses. For many, the tradition of partaking in festivities and sharing gifts with loved ones may clash with the harsh reality of financial limitations. If you can't pay a $500 medical bill normally, how will you afford that plus gifts for loved ones?

Moreover, as 2024 approaches, these financial constraints may carry over, influencing how people plan for the new year. Unpaid medical bills can hinder the ability to set financial goals, make long-term plans, or even save for unexpected future expenses.

Tips for improving your situation

There are always steps you can take to try and overcome the financial situation you've found yourself in. You can find ways to pay off debt, save more, and make sure you are better prepared to deal with the unexpected. Here are some tips to consider. 

Prioritize an emergency fund. Building and maintaining an emergency fund is crucial, especially for unexpected healthcare expenses. Allocating a portion of your income to an emergency fund can provide a financial cushion in times of need. While past guidelines recommended 6-9 months of living expenses tucked away, post-COVID recommendations have increased to at least 12 months of living expenses in the case of emergency. The challenge is that those with mounting debt are also most in need of an emergency fund. It is recommended that consumers in this bind focus on the highest-interest debt while contributing to an emergency fund. Even if it is a small amount each month, money in a high-yield savings account still accumulates, pays interest, and is kept safe.

Explore flexible payment options. Healthcare providers and financial institutions often offer flexible payment plans. It's essential to communicate with your healthcare provider, inquire about available options, and negotiate a payment plan that aligns with your financial capacity. Some doctor’s offices allow interest-free payments. Finding these opportunities can help eliminate some money stress from your life.

Adjust financial planning for the holidays. Create a realistic budget for holiday spending, considering your desire to celebrate and the need to manage existing financial obligations. Prioritize essential expenses and allocate funds accordingly. You can still give gifts without breaking the bank.

Explore alternative financing. In cases where traditional payment methods may not suffice, exploring alternative financing options can be beneficial. Organizations like AccessOne offer consumer-centric payment tools and financing options designed to ease the burden of medical expenses. Other options include Health Savings Accounts (HSAs), where you can make pre-tax payroll deductions to save for designated medical expenses. Maximum contributions for 2023-2024 to HSAs are $4,150 for self-coverage and $8,300 for families. Those aged 55 and older can make an additional $1,000 catch-up contribution. These payments can go toward deductibles, copayments, coinsurance, and, in some cases, dental, vision, and prescription drug expenses. Determining if your coverage is eligible is important, as you can only contribute to an HSA if you have an HSA-eligible plan.

Learn about insurance coverage. Understanding your insurance coverage is vital. Familiarize yourself with the terms of your policy, including copayments, deductibles, and covered services. This knowledge can empower you to make informed decisions about your healthcare expenses.

Bottom line

The intersection of healthcare bills and the holiday season creates a unique financial challenge for many Americans. Navigating this season requires a proactive approach to financial planning, emphasizing the importance of emergency funds, exploring flexible payment options, and making informed decisions about holiday spending.

By and large, the most important thing for any consumer to do, particularly those in financial trouble, is to pay down debt. Medical creditors might be more inclined than other creditors to offer flexible payment options, and taking advantage of this is imperative if you're in a bind. If you are among the many Americans who would feel uncomfortable in your ability to pay a $500 medical bill, the impending new year is a good time to contribute as much as possible each month to debt and savings.

As we usher in 2024, it's crucial to acknowledge the impact of healthcare costs on long-term financial goals. By adopting prudent financial practices and seeking available resources, individuals can overcome immediate challenges and lay the groundwork for a more secure financial future. The key lies in proactive financial management and informed decision-making, ensuring that the burden of healthcare expenses doesn't overshadow the spirit of the holidays or hinder aspirations for the coming year.

Choice Home Warranty Benefits

  • First month free
  • Protection for unexpected expense
  • 24/7 claims hotline
  • Network of over 15,000 technicians

Author Details

Georgina Tzanetos Georgina Tzanetos is a former financial advisor who has been active in financial media for the past six years. She holds a master's in political economy from NYU, where she studied distressed labor markets.