The shocking extent of underinsurance
Changes in Financial Burdens for Health Care National Estimates for the Population Younger Than 65 Years, 1996 to 2003
Jessica S. Banthin, PhD; Didem M. Bernard, PhD
JAMA
December 13, 2006
JAMA. 2006;296:2712-2719.
Context: Policymakers as well as physicians need to understand how rapidly rising health care costs are affecting specific groups of patients.
Objective: To estimate the number and characteristics of individuals in the United States faced with very high financial burdens for health care.
Design, Setting, and Population: Data from a nationally representative sample of civilian, noninstitutionalized US individuals younger than 65 years from the Medical Expenditure Panel Surveys were used to calculate 2 measures of financial burden as a function of tax-adjusted family income. Total burden included all out- of-pocket expenditures for health care services, including premiums.
Health care services burden excluded premiums and, when applied to the insured population, was used to identify the underinsured. We defined the underinsured as insured persons with health care service burdens in excess of 10% of tax-adjusted family income.
Main Outcome Measures: Total and health care services burdens exceeding 10% and 20% of family income in 1996 and 2003.
Results: In 2003, there were 48.8 million individuals (19.2%) living in families spending more than 10% of family income on health care, an increase of 11.7 million persons since 1996. Of these individuals, about 18.7 million (7.3%) were spending more than 20% of family income. In 2003, individuals with higher-than-average risk of incurring high total burdens included poor and low-income persons and those with nongroup coverage, aged 55 to 64 years, living in a non– metropolitan statistical area, in fair or poor health, having any type of limitation, or having a chronic medical condition. Applying our definition of underinsured to the insured population, an estimated 17.1 million persons younger than 65 years were underinsured in 2003, including 9.3 million persons with private employment-related insurance, 1.3 million persons with private nongroup policies, and 6.6 million persons with public coverage.
Conclusions: Our analysis identifies patients at greatest risk of health-related financial burdens that may adversely affect their access and adherence to recommended treatments. Our study also highlights the high costs associated with nongroup health insurance policies.
Author Affiliations: Division of Modeling and Simulation, Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, US Department of Health and Human Services, Rockville, Md.
http://jama.ama-assn.org/cgi/content/abstract/296/22/2712?etoc
Comment:
By Don McCanne, MD
Not more numbers! Don’t we have enough to make the case for national health insurance?
These numbers are important. Let’s see if we can make some sense of them.
This study indicates that the financial burden on families of medical costs has continued to grow worse. We should look at the most recent year studied, 2003, to get a better idea of the extent of the problem as we experience it today.
This is not a study of the numbers of uninsured (we already know those numbers), nor is it a study of the numbers with inadequate insurance or underinsurance (we don’t know those numbers). Rather, it is a study of the numbers of individuals under 65 who experienced financial hardship in a single year because their health care costs were greater than our health care financing system was capable of protecting against. It is not a study of the potential risks, but rather it is a study of actual financial harm done.
Most can agree that spending more than 10% of family income on health care constitutes a financial hardship, except perhaps for the very wealthy. So how many individuals experienced this hardship in one year - 2003? 48.8 million individuals, or 19.2% of our population!
One-fifth of all Americans! If you were to average that out, that means that everyone of us would have a year of financial hardship due to medical bills within the next five years, and every five years. Of course, disease is not evenly distributed, so those who remain healthy will not have a problem, but those with medical disorders will have multiple years of hardship.
Spending 20% of family income would certainly be disastrous for almost all of us. How many individuals spent that in 2003? 18.7 million or 7.3% of our population! That’s a disaster!
Well let’s forget about the uninsured for a minute and look at those of us who have insurance. Let’s not even count the insurance premiums that we or our employers are paying, but let’s look exclusively at the out-of-pocket expenses that we are paying for health care. This will give us a better idea of just how well our insurance is working.
How many paid more than 10% of family income for health expenses not covered by their insurance? Of those younger than 65, 17.1 million individuals! Underinsurance is a national epidemic that engulfs many more everyday!
There are some very important numbers from the tables in the article that do not appear in the abstract above.
What percent of middle-income Americans spent more than 10% of family income on health care? The answer? 22.7%!! That is almost as much as the 23.7% of low-income families that spent over 10% on health care. Health care costs are not just a problem for the poor, they are very much a problem for middle-income America!
One very small number from the charts may say the most about our flawed system of financing health care. What percent of high-income Americans spent more than 20% of their incomes on health care? One- fifth of their high incomes is a lot of money. Well, it was only 0.6% But think about that. One out of every 167 high-income Americans had to spend over 20% of their incomes on health care. If our health care financing system cannot reliably protect the wealthy, then it is a flawed system indeed.
Maybe the wealthy don’t care. The chances are 166 out of 167 that they won’t experience major medical debt in any given year, and they will likely outlive those odds. But middle-income Americans should be very, very afraid!