The number of Americans of working age who have accumulated medical debt or are experiencing financial difficulties paying off their medical bills has climbed to a staggering 41% by 2007, up from only 34% in 2005. Of these 72 million Americans, almost 50 million of them were without medical insurance at some point during the previous year. The remainder had medical insurance but coverage was so costly that the out-of-pocket expenses the individual was required to pay to get medical care left economic hardship in other aspects of daily life.
An additional 7 million Americans age 65 and older report similar financial hardships as a result of medical expenses, bringing the nation’s total of American adults experiencing problems paying medical bills to an estimated 79 million.
Calling the inadequacies of our current medical system coupled with the many other negative economic issues of our time a “perfect storm” that threatens working families across the United States with financial devastation, Sara Collins, an assistant vice president at the Commonwealth Fund, says many Americans are forced to delay or forego medical care simply because of cost alone. Collins is lead author of the study, Losing Ground: How the Loss of Adequate Health Insurance is Burdening Working Families, just released by the Commonwealth Fund, a private foundation dedicated to a high-performance health system that includes independent study of the nation’s current health policy as well as measures for its reform.
Americans age 65 and older fare better than younger adults, thanks in large part to the Medicare system. Many older Americans also offset their Medicare benefits with supplemental coverage from private insurers and Medicaid. Americans in this age bracket are not exempt from the financial burden of medical expenses, however. Nineteen percent of them report having difficulties paying medical bills or living with medical debt.
Some data gleaned from the study include:
- Two out of every three adult Americans younger than 65 (116 million adults) say they either went without medical care, were uninsured at some point during the year, were underinsured, or had problems with medical debt in 2007.
- More than half of all Americans earning less than $40,000 had problems paying or were in debt due to medical expenses. Such problems were defined for the sake of the study to include the financial inability to pay medical bills, contact from a collection agency about unpaid medical expenses, and the need to change one’s way of life in order to accommodate medical debt.
- 39% of the people reporting problems with medical expenses say they’ve depleted their savings to pay medical expenses.
- 29% say they could not afford life’s basic necessities, such as rent, food, and heat, because of medical expenses.
- 30% accrued credit card debt as a result of medical expense payment problems.
- 24% of American adults under the age of 65 have medical debt of $4,000 or more.
- 12% owe $8,000 or more.
- 60% of all American adults are uninsured or underinsured. Being underinsured means there is healthcare coverage in place but income isn’t adequate enough to take advantage of the situation. In such cases, deductibles and other out-of-pocket expenses make getting medical care either out of the question or a great financial burden.
- 45% of working-age Americans reported problems getting medical treatment because of the cost of care, up from only 29% in 2001.
- One-third of all working-age Americans spent 10% or more of their 2007 income on medical expenses, including health insurance premiums, up from 21% in 2001.
- 61% who reported problems with medical expenses accrued those expenses during a time when they were covered under a medical insurance policy.
- 53% who pay insurance deductibles that amount to 5% or more of their income report having problems paying medical expenses.
- Families making less than $20,000 a year are more likely to be uninsured than those making more.
- Of families of moderate means, making between $20,000 and $40,000 a year, 41% were uninsured at one point or another during the year 2007, up from 28% in 2001.
- Of the 50 million American adults without healthcare coverage in 2007, 58% lived in a household where at least one adult member worked full time.
- 47% of all uninsured or underinsured working-age Americans reported deficiencies in health care that included delays in getting needed medical tests, duplication of expensive medical tests, and delayed results even when tests indicated abnormalities, compared to only 26% of adequately insured Americans reporting similar inefficiencies in medical care.
The nation’s current economic slump, including skyrocketing food and gas prices, declining home values, and stagnant incomes, poses serious risk to the growing number of Americans who struggle with medical expenses and lack of adequate medical insurance coverage. According to the Commonwealth Fund, the crisis in health care needs to be a very high priority for the new Administration when it takes office in 2009 so that millions of Americans are no longer faced with financial ruin simply because they get sick.
Source: Commonwealth Fund