Medical debt is expected to grow in coming years as Republican-led health cuts come into force this winter. As it does, a changing world of medical billing and debt collection awaits patients: one where artificial intelligence increasingly listens, codes, bills and collects. Artificial intelligence takes notes in exam rooms, codes visits, sends out billing messages and powers AI agents who text patients in billing portals – all changing the debt-collection ecosystem.
Medical debt will grow among “both the insured and uninsured, because of how we’re increasingly putting more costs onto individuals for those plans”, said April Kuehnhoff, a senior attorney at the National Consumer Law Center. It’s people who maybe they can afford it but the plan they get isn’t as good, and they are asked to have a higher deductible, higher co-pay, so they just have a higher out-of-pocket [cost],” she said. A report released last Tuesday found that more than one in four US adults reported they owed a medical debt in 2025.
The proportion was the same – about one in four – for people with health insurance, according to an analysis by the Urban Institute and the Robert Wood Johnson Foundation. AI company leaders, such as Anthropic’s Dario Amodei, have promised to cure all diseases in a decade. While scientists remain skeptical of those claims, financial analysts at JP Morgan have celebrated AI in coding, billing and collections as “early wins”.
Artificial intelligence now helps medical debt collectors determine personalized discounts for settlements – an analogue of the personalized pricing criticized by the Federal Trade Commission – and helps medical debt-buying companies determine the price they should offer for debt portfolios. Companies offering AI-backed medical coding and billing services are finding new markets thanks to Republican-led health reforms. Donald Trump’s HR1, known as the One Big Beautiful Bill Act, cut roughly $1tn in federal spending from the healthcare industry.
Paired with Republicans’ refusal to extend subsidies for plans in Obamacare marketplaces, those cuts are expected to result in about 17 million newly uninsured individuals through 2034. When rates of lack of insurance rise, something called “uncompensated care” tends to go up in tandem. This is health industry parlance for the doctor and hospital bills that go unpaid – from care that uninsured and under-insured people inevitably seek even when they can’t pay.
The Urban Institute estimates that HR1 will cause $278bn in uncompensated care by 2034. The result will be cash-strapped hospitals seeking to improve collections, and thereby turning to increasingly high-tech collectors. That leads to openings for companies like Cedar, an AI-driven billing platform backed by venture capital firms such as Andreessen Horowitz and JP Morgan.
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