Lack of Insurance, High Medical Costs Put More in a Bind

By Sopan Joshi
Washington Post Staff Writer
Wednesday, August 20, 2008

Americans are struggling to pay medical bills and are accumulating medical debt at an increasing rate, according to a survey released today.

"A perfect storm of negative economic trends is battering working families across the United States," said the survey by the Commonwealth Fund, a private foundation that supports independent research on health care.

"Health-care costs are climbing much more rapidly than incomes or the growth in the overall economy," said Sara R. Collins, assistant vice president of the foundation and one of the authors of the study. As gas and food prices have soared and real estate values have fallen, the federal minimum wage is now $3 an hour lower, in real terms, than it was 40 years ago, the study said.

"What is notable is how these problems are spreading up the income scale," Collins said.

Two-thirds of the working-age population was uninsured, underinsured, reported a medical bill problem or did not get needed health care because of cost in 2007.

More than two in five adults in the 19-to-64 age group reported problems paying medical bills or had accumulated medical debt in 2007, up from one in three in 2005. Their difficulties included not being able to afford medical attention when needed, running up medical debts, dealing with collection agencies about unpaid bills, or having to change their lifestyle to repay medical debts.

Health-care costs are limiting expenditure on daily necessities. Of those facing mounting medical bills, 39 percent used all their savings, 30 percent incurred large credit card debt, and 29 percent said medical bills left them unable to pay for basic necessities such as food, heat or rent.

The survey found a sharp rise in the number of people spending more than 10 percent of their income on health care. Among people with annual income below $20,000, the figure more than doubled to 53 percent from 26 percent in 2001.

The survey found that 28 percent of working-age adults in 2007 were without insurance at some time during the previous year, up from 24 percent in 2001.

The insured also are facing increasing woes: 61 percent of those with medical debt or bill problems were insured at the time they needed medical attention.

Those without adequate insurance increased to 14 percent of the population in 2007 from 9 percent in 2003.

This was the foundation's fourth biennial survey since 2001. The foundation mentioned salient features of health-care plans of both Sens. John McCain and Barack Obama but struck a nonpartisan note.

The survey showed that the health-care gap between poor and moderate-income families is narrowing, and that even middle- and high-income groups are going without medical insurance at some time during the year.

Half of those with incomes below $20,000 went without insurance during 2007, up one percentage point from 2001. But the figure among moderate-income ($20,000 to $40,000) families increased to 41 percent from 28 percent. Among middle-income ($40,000 to $60,000) families, the figure rose to 18 percent from 13 percent. And among those with incomes above $60,000, it rose to 8 percent from 4 percent.

Universal health-care insurance, the foundation argued, is key to improving health care, and its design would dictate its effectiveness.

President Karen Davis said the foundation has been conducting annual surveys of health-care experience in other countries since 1998, including Australia, Canada, the Netherlands, Germany, New Zealand and Britain. "The U.S. stands out for being the only country . . . that reports significant fractions of the population not getting needed care," Davis said.

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