Underinsured Risking Debt to Pay Health Bills

One expert agreed that "underinsurance" is a growing problem.

"They are picking up a trend that is very troubling," said Karen Davis, the president of The Commonwealth Fund. "It's not enough to have health insurance. You have to make sure it's good coverage," she said.

Being underinsured often means limited access to medical care and incurring unmanageable debt, Davis said.

Increasingly, middle-class families are being squeezed by out-of-pocket costs, Davis said. She agrees that the answer lies in universal health coverage, but it also has to be adequate coverage, she cautioned.

In addition, Davis believes insurance plans need to be tailored to suit individual needs. "We have to limit the financial liability of individuals, including premiums and out-of-pocket costs, to an affordable share of their income," Davis said.

Another expert believes individuals, not just government, have a key role to play.

"The insurance system is a mess," said Greg Scandlen, the founder of Consumers for Health Care Choices, which advocates for private health insurance. "That's why we support health savings accounts," he said.

With health savings accounts, insurance companies, doctors and hospitals can save on administrative costs and pass those savings on to consumers, Scandlen explained. These costs take 56 percent of every health care dollar, he said.

With the savings accounts, individuals can also put tax free money away and spend it on the health care they want, he added. "You get a dollar's worth of service for the dollar you spend," he said. "That's more efficient than a third-party payer system. And you can put money away for future health care expenses."

But Davis disagreed, saying that health care savings accounts are taking Americans in the wrong direction. "It hasn't made a dent in the number of people who are uninsured. In fact, those numbers have been going up," she said. "What it's done is help erode the quality of coverage and forced people to spend their savings."

More information

For more information on health insurance, visit The Commonwealth Fund.

SOURCES: Nancy Metcalf, senior project editor,Consumer Reports, Yonkers, N.Y.; Karen Davis, Ph.D., president, The Commonwealth Fund, New York City; Greg Scandlen, founder, Consumers for Health Care Choices, Hagerstown, Md.; September 2007,Consumer Reports