The Underinsured

From Business Week

The number of American adults who had inadequate health insurance coverage rose 60% from 2003 to 2007, from 16 million to more than 25 million people.

Hardest hit were families with middle and higher incomes, those whose income was 200 percent above the federal poverty level or those with an annual income of $40,000 or more, a new report by The Commonwealth Fund found.

The report is published in the June 10 issue of Health Affairs.

To make their estimates, the researchers conducted a national survey in 2007 of 3,501 adults. They found that among adults aged 19 to 64, 25.2 million were "underinsured." That number was based on out-of-pocket health-care costs as a proportion of income.

People who are underinsured are people who have health insurance but spend 10 percent or more of their income on out-of-pocket medical expenses. For people below 200 percent of the federal poverty level, being underinsured means spending more than 5 percent of income on out-of-pocket medical costs.

Being underinsured also means paying deductibles of 5 percent or more of family income.

The researchers found that people who were underinsured were more likely to go without needed health care and have problems paying medical bills, compared with people who have adequate health insurance.

In fact, 53 percent of the underinsured and 68 percent of those without health insurance had to forgo needed medical care, such as not seeing a doctor when sick, not filling prescriptions, and not getting recommended diagnostic tests or treatments. "The underinsured look a lot like the uninsured," Schoen said.

Among the underinsured, 45 percent reported having difficulty paying bills, being contacted by collection agencies for unpaid bills, and curtailing their way of life to pay their medical bills, compared with 21 percent of people with adequate health insurance.

Also, underinsured people were more likely to have insurance plans that limit payments. They were also more likely to have high deductibles. For example, one quarter of underinsured people had deductibles of $1,000 or more, the report found.

However, premiums for the underinsured were similar to or higher than those paid by people with adequate insurance, the researchers found.