A father dreamed of a home for his family. Medical debt nearly pushed them onto the streets.

Kayce Atencio used to be haunted by a thought while working at a homeless shelter in downtown Denver. "It could have been me," said Atencio, 30, who lives in a small apartment with his son and daughter not far from the shelter.

It nearly was. Atencio and his children for years slept on friends' couches or stayed with family, unable to rent an apartment because of poor credit. A big reason, he said, was medical debt.

Atencio had a heart attack at 19, triggered by an undiagnosed congenital condition. The debts from his care devastated his credit score. "It always felt like I just couldn't get a leg up," he said, recalling a life of dead-end jobs and high-interest loans as he tried to stay ahead of debt collectors. By 25, he'd declared bankruptcy.

Across the country, medical debt forces legions of Americans to make painful sacrifices. Many cut back on food, take on extra work, or drain retirement savings. For millions like Atencio, the health care system is threatening their very homes.

That's proven particularly devastating in communities like Denver, where skyrocketing prices have put housing out of reach for many residents and fueled a crisis that's left thousands homeless and sleeping on the streets.

At the Community Economic Defense Project, or CEDP, a Denver nonprofit that helps people facing eviction or home foreclosure, about two-thirds of clients have medical debt, an informal survey by KFF Health News and the organization suggests. Close to half of the nearly 70 people surveyed said medical debt played a role in their housing issue, with about 1 in 6 saying it was a major factor.

"All day long I hear about medical debt," said Kaylee Mazza, a tenant advocate who staffs a CEDP legal clinic at the Denver courthouse that offers aid to tenants going through eviction proceedings. "It's everywhere."

Nationwide, about 100 million people have some form of health care debt. Of those, about 1 in 5 said the debts have forced them to change their living situation, including moving in with friends or family, according to a 2022 KFF poll.

A growing body of evidence shows that stable housing is critical to physical and mental well-being. Some major medical systems — including several in Colorado — have even begun investing in affordable housing in their communities, citing the need to address what are sometimes called social determinants of health.

But as hospitals and other medical providers leave millions in debt, they inadvertently undermine community health, said Brian Klausner, a physician at a clinic serving homeless patients in Raleigh, North Carolina.

"Many of the hospitals across the country that are now publicly vowing to address health inequities and break down barriers to health are simultaneously helping to create these very problems," Klausner said. "Nobody likes the elephant in the room, but the reality is that there are thousands of sick Americans who are likely homeless — and sick — because of medical debt."

A downward spiral

Medical debt can undermine housing security in several ways. For some, it depresses credit scores, making it difficult to get a lease or a mortgage. Last year, about 1 in 8 U.S. consumers with a credit report had a medical debt listed on it, according to the nonprofit Urban Institute.

Patients with chronic medical conditions may fall behind on rent or home payments as they scramble to keep medical debts in check to preserve access to health care. Many hospitals and other providers will turn away patients with outstanding bills, KFF Health News found.

Denise Beasley, who also assists clients at CEDP in Denver, said many older people, who typically depend most on physicians and medications, believe they must pay their medical and pharmacy bills before anything else. "The elderly are terrified," she said.

For others, such debt can compound financial struggles brought on by an accident or unexpected illness that forces them to stop working, jeopardizing their health coverage or ability to pay for housing.

In Seattle, researchers found widespread medical debt among residents in homeless encampments. And those with such debt tended to experience homelessness two years longer than encampment residents without it.

More broadly, people with medical debt are more likely to say the debt has caused them to be turned down for a rental or a mortgage than people with student loans or credit card debt, according to a 2019 nationwide survey of renters, homebuyers, and property owners by real estate company Zillow.

For Atencio, who left home at 16, his struggles with medical debt began with the heart attack. He was working at a gas station and living in Trinidad, a small city in southern Colorado near the New Mexico border.

Rushed to a local hospital, he underwent surgery. The bills, which topped $50,000, weren't covered by his health plan because he'd unknowingly gone to an out-of-network provider, he said. "I fought it as hard as I could, but I couldn't afford a lawyer. I was stuck."

Atencio, who is transgender, has close-cropped dark hair and a large tattoo on his right forearm memorializing two friends who died in a car accident. Sitting on an aging couch in an apartment with bars on the windows, he's philosophical about his long journey from that medical crisis through years of debt and housing insecurity. "We've pulled ourselves out of this," he said. "But it took a toll."

When Atencio's credit score dipped close to 300, the lowest rating, there were few places to turn for help. Atencio's relationship with his parents, who divorced when he was 2, had been strained for years. Atencio got married at 18, but he and his husband rarely had enough to make ends meet. "I remember thinking, 'What kind of a start to my adult life is this?'"

They were ultimately taken in by Atencio's mother-in-law. "If it wasn't for her, we would have been homeless," he said. But getting out from the debt was agonizing.

"You end up in this cycle," he said. "You get into debt. Then you take out loans to try to pay off some of the debt. But then there's all this interest." With poor credit, Atencio relied at times on payday lenders, whose high interest rates can dramatically increase what borrowers owe. Many employers also check credit scores, which made it difficult for Atencio to land anything but low-wage jobs.

The job at the shelter was a step up, and Atencio this year got the apartment, which is reserved for single-parent families at risk of being homeless. (Atencio separated from his husband last year.)

Colorado's housing challenges

Atencio's housing struggles are hardly unique. Jim and Cindy Powers, who live in Greeley, a small city north of Denver, saw their own housing dreams collapse after Cindy was diagnosed with a life-threatening condition that required multiple surgeries and left the couple with more than $250,000 in medical debt.

When the Powers declared bankruptcy, the settlement protected their home. But their mortgage was sold, and the new lender rejected the payment plan. They lost the house.

Lindsey Vance, 40, who moved to Denver five years ago seeking more affordable housing than the Washington, D.C., area where she was from, still can't buy a house because of medical debts. She and her husband have a six-figure income, but medical bills for even routine care that she's struggled to pay since her 20s have depressed her credit score, making it difficult to get a loan. "We're stuck in a holding pattern," she said.

In and around Denver, elected officials, business leaders, and others have become increasingly concerned about medical debt as they look for ways to tackle what many see as a housing crisis.

"These things are deeply connected," Denver City Council member Sarah Parady said. "As housing prices have gone up and up, I've seen more and more people, especially people with a medical issues and debts, lose housing security." Parady, who ran for office last year to address housing affordability, is helping lead an effort to get the city to buy and retire medical debt for city residents.

Fueled by skyrocketing prices and rising interest rates, the cost of buying a home more than doubled in Denver from 2015 to 2022, according to one recent analysis. And with rents also surging, evictions are rocketing upward after slowing during the first two years of the pandemic.

Perhaps nowhere is Denver's crisis more visible than on the streets. The city's downtown is dotted with tents and encampments, including one that stretches over several blocks near the shelter and clinic where Atencio used to work. By one count, metro Denver's homeless population increased nearly 50% from 2020 to 2023.

CEDP, which was founded to help residents with housing challenges sparked by the pandemic, this year joined other Colorado consumer and patient advocates to push the legislature for stronger protections for patients with medical debt.

And in June, Colorado enacted a trailblazing bill that prohibits medical debt from being included on residents' credit reports or factored into their credit scores, a move that put the state at the forefront of efforts nationally to expand debt protections for patients.

A few other states are considering similar steps. And in Washington, D.C., consumer and patient advocates are pushing for federal action to limit medical bills on credit reports. In most states — including many with the highest rates of medical debt — patients still have no such protections.

For his part, Atencio is hoping the new apartment marks a turning point.

The home is modest — a small unit in an aging concrete tower. There's a security guard by the front door and long, linoleum corridors painted institutional blue and brown.

Atencio's family is settling in, along with four pet rats — Stitch, Cheese, Peach, and Bubbles — who live in a large cage in the living room. "This feels like freedom," said Atencio.

He's tried to give his children, who are 5 and 11, a sense of security: home-cooked meals and the space to play or hang out in their own bedrooms. Like parents everywhere, he frets over their screen time and rolls his eyes when they critique what's for dinner. (They didn't like the potatoes he put in a pot roast.)

They are all full-time students: Atencio, who left his job at the shelter, is working on a master's in social work. His son just started kindergarten, and his daughter is in middle school. "I have big plans and big goals," he said.

And with several thousand dollars of medical debt still to pay off, Atencio said he's careful not to take his kids to an out-of-network hospital or physician. "I won't make that mistake again," he said.

About this project

"Diagnosis: Debt" is a reporting partnership between KFF Health News and NPR exploring the scale, impact, and causes of medical debt in America.

The series draws on original polling by KFF, court records, federal data on hospital finances, contracts obtained through public records requests, data on international health systems, and a yearlong investigation into the financial assistance and collection policies of more than 500 hospitals across the country.

Additional research was conducted by the Urban Institute, which analyzed credit bureau and other demographic data on poverty, race, and health status for KFF Health News to explore where medical debt is concentrated in the U.S. and what factors are associated with high debt levels.

The JPMorgan Chase Institute analyzed records from a sampling of Chase credit card holders to look at how customers' balances may be affected by major medical expenses. And the CED Project, a Denver nonprofit, worked with KFF Health News on a survey of its clients to explore links between medical debt and housing instability.

KFF Health News journalists worked with KFF public opinion researchers to design and analyze the "KFF Health Care Debt Survey." The survey was conducted Feb. 25 through March 20, 2022, online and via telephone, in English and Spanish, among a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current health care debt and 382 adults who had health care debt in the past five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.

Reporters from KFF Health News and NPR also conducted hundreds of interviews with patients across the country; spoke with physicians, health industry leaders, consumer advocates, debt lawyers, and researchers; and reviewed scores of studies and surveys about medical debt.