Medical Debt Weighs on 49 Mln Americans With Health Insurance

Aug. 10 (Bloomberg) -- More than 49 million Americans with health insurance are struggling with medical bills they often have to take on debt to pay, according to a Commonwealth Fund report that comes as more employers trim health benefits.



Two-thirds of patients who paid a premium of at least 10 percent of their income reported borrowing or facing other financial burdens because of medical bills, the report by the New- York based foundation said today. So did half of adults with annual deductibles of at least $500 and almost half of those without coverage for prescription drugs.



Companies have been using plans that require employees to pay higher deductibles and more out-of-pocket costs to help slow health premiums, which may rise 11 percent next year, according to a PriceWaterhouseCoopers LLP survey. About 1 million people now have high-deductible plans, said Karen Ignagni, president of the trade group America's Health Insurance Plans.



``We are beginning to see in the United States that, for some, it's becoming harder and harder to distinguish the insured from the uninsured,'' said Michelle Doty, a senior analyst at the Commonwealth Fund, in an Aug. 8 interview. The trend toward high- deductible health plans may mean more people who have insurance will face increased medical debts, she said.



``Two-thousand three was just the beginning of the trend of high-deductible plans,'' she said. ``We suspect it will be worse in our next survey.''



The report is a new analysis of information collected in the Commonwealth Fund's Biennial Health Insurance Survey. The national telephone survey of 2,000 adults ages 19 and older was conducted from Sept. 2, 2003, through Jan. 4, 2004. The survey has an error rate of plus or minus 2 percentage points.



77 Million Americans



About 77 million Americans with and without health benefits struggle to pay medical bills, the report said. The total includes people unable to pay the bills, those who had been contacted by a collection agency because of medical expenses, those forced to change their buying habits, and those who took out loans or used credit cards, the report said.



Women and black Americans are more likely to have such problems than white men, the report said. Almost 40 percent of women ages 19 to 64 said they struggled with health costs, compared with 25 percent of men. Half of black Americans in that age group reported financial woes, compared with 34 percent of Hispanics and 28 percent of whites.



The U.S. Census Bureau estimated that 45 million Americans lacked medical coverage in 2003. The agency will issue its estimate for 2004 later this month.



Containing Cost



Ignagni, of the insurance trade group, said the health- insurance industry focused on containing costs in 1990s while adding coverage for 5 million people.



Since then, ``what we've been doing is re-inventing tools'' to improve the system, she said. Almost 200 million Americans are enrolled in private health insurance now, Ignagni said.



Joseph Antos, a health-care policy analyst at the Washington- based American Enterprise Institute, said in an Aug. 8 interview that because the percentage of high-deductible enrollees isn't large, those plans probably aren't the source of the financial pinch found by the survey.



``Blaming it on these types of products strikes me as peculiar,'' Antos said. ``The attention seems to have moved away from `the nasty hospitals who overcharge' to `insurance isn't good enough.'''



The U.S. government defines a high-deductible health plan as requiring a single enrollee to pay $1,050 each year before benefits start. The limit on out-of-pocket expenses for an individual is $5,000. For family coverage, the yearly deductible is $2,100 and the cap on out-of-pocket expenses is $10,000.



Earlier Findings



The Commonwealth Fund report supports earlier findings by researchers at Harvard University, which found that half of U.S. personal bankruptcy filers cited out-of-pocket medical expenses as a reason for their financial problems. Most of those people had health insurance, according to the Harvard study, which was published in February by the journal Health Affairs.



Harvard researchers found that hospital bills were the biggest medical expense for debtors, followed by drug costs and doctors' bills.



``To better protect Americans' financial security and access to care, policymakers need to look more closely at the quality of insurance coverage and benefit design,'' wrote the Commonwealth Fund's Doty and her colleagues in the report.