White House Suggests Loans for Medical Debt in New ACA Rules
Buried in a 1,121-page final rule governing the Affordable Care Act marketplace, the Trump administration has quietly proposed that insurers offer loans to Americans struggling with out-of-pocket medical costs — a suggestion that critics say shifts the burden onto patients rather than addressing the root causes of soaring healthcare expenses. The proposal comes as roughly 100 million Americans — nearly 38% of adults — carry some form of medical or dental debt, according to data from KFF and the Consumer Financial Protection Bureau.
The Proposal
The May 2026 rule, which sets the rules for how the ACA marketplace will operate in 2027, suggests that insurers consider offering loans to customers who cannot afford their deductibles and other out-of-pocket costs. The debt would have to be repaid, presumably with interest, as Raw Story reported, citing The New York Times. Administration officials framed the idea as a way to help people who choose plans with low monthly premiums but unexpectedly face devastating medical bills.
However, the proposal arrives against a backdrop of rapidly deteriorating affordability. Average Obamacare plan premiums have surged to $178 per month in 2026, up from $113 in 2025 — a 57.5% increase — after the Republican-controlled Congress allowed enhanced ACA subsidies to expire at the end of last year. The average annual deductible for ACA plans now sits near $4,000 per person, and new rules could allow deductibles as high as $31,000 for families, according to Political Wire.
A Crisis of Scale
Medical debt is now the single largest source of debt collection in the United States — larger than credit cards, utilities, or any other consumer debt category. Total US household medical debt is estimated at roughly $220 billion, with some estimates placing the figure closer to $500 billion when hidden forms such as medical expenses charged to credit cards are included, according to The World Data.
Perhaps most striking: insured patients account for approximately 57% of total medical debt dollars — a reflection of how high deductibles, out-of-pocket maximums, and coverage gaps have made even “good” insurance inadequate protection against catastrophic costs. A family with a $7,000 annual deductible is effectively uninsured for the first $7,000 of any medical crisis.
Medical debt is tied to approximately 66.5% of personal bankruptcy filings in the US, and 38% of adults report having skipped or delayed medical care due to cost concerns.
Expert Backlash
Stanford economist Neale Mahoney sharply criticized the proposal in comments to The New York Times. “The last thing you want to do is to increase deductibles and load people up with more medical debt,” Mahoney said. “It seems to be hugely out of touch with where people are.”
Consumer advocates were equally blunt. Chi Chi Wu, a staff attorney at the National Consumer Law Center, previously told NPR that “for tens of millions of Americans, balancing the budget is like walking a tightrope. The Trump administration is just throwing them off.”
Arika Sánchez, a healthcare attorney at the New Mexico Center on Law and Poverty, warned of cascading consequences. “When families get stuck with medical debt, it hurts their credit scores, makes it harder to get a car, a home or even a job,” she told NPR. “Medical debt wrecks people’s lives.”
Broader Policy Context
The loan proposal is just one element of a broader shift in federal healthcare policy. The Trump administration’s tax legislation — the “One Big Beautiful Bill” — includes $1 trillion in cuts to Medicaid over the next decade, expected to leave 10 million more people without health coverage by 2034, according to the Congressional Budget Office.
Meanwhile, a Biden-era Consumer Financial Protection Bureau rule that would have removed all medical debt from consumer credit reports was struck down by a Trump-appointed federal judge in Texas after the administration declined to defend it. A lawsuit challenging the new ACA rule is already underway, with plaintiffs warning it could cause at least 3 million Americans to lose coverage in 2026 alone.
Geographic Divide
The medical debt crisis is not evenly distributed. Southern states without Medicaid expansion — including Mississippi, Alabama, Texas, and Georgia — carry the heaviest burdens, with 29% to 37% of adults reporting medical debt. By contrast, states that expanded Medicaid, such as Massachusetts, Vermont, and Connecticut, report rates as low as 7% to 8%, according to research compiled from KFF, the Urban Institute, and the CFPB.
What’s Next
With healthcare costs topping the list of economic worries for voters across party lines, the issue is expected to play a central role in the 2026 midterm elections. A KFF poll published in January found that 66% of adults worry about affording healthcare, and 43% of voters say the cost of care will have a “major impact” on which candidate they support.
As the legal and political battles unfold, the fundamental question remains: will the US address the structural drivers of medical debt — high prices, inadequate insurance coverage, and gaps in the social safety net — or continue to layer new forms of financial risk onto families already struggling to stay afloat?