Consumer Reports on the underinsured
Are you really covered?
Why 4 in 10 Americans can’t depend on their health insurance
You might think that you don’t have to worry about paying for medical care if you have health insurance. But you would be wrong.
From escalating medical debt to postponed retirement, our exclusive national survey of working-age adults shows the depth of jitters even for those lucky enough to have insurance through their jobs or families:
- 29 percent of people who had health insurance were “underinsured,” with coverage so meager they often postponed medical care because of costs.
- 49 percent overall, and 43 percent of people with insurance, said they were “somewhat” to “completely” unprepared to cope with a costly medical emergency over the coming year.
- 20 percent of people said they were so disappointed with their HMO or PPO that they wanted to switch plans.
- 16 percent had no health plan at all, including many working respondents whose jobs didn’t offer insurance, or who couldn’t afford the premiums or deductibles of the available plan.
Insured but not covered
Our survey found evidence of the increasing frailty of our system of health insurance almost everywhere we looked.
Between 2001 and 2005, the percentage of middle-income families - those who earn between $40,000 and $80,000 for a family of four - who had job-based health coverage dropped by 4 percentage points. Half lost benefits because their employers dropped health insurance altogether or quit offering dependent coverage. But 15 percent gave up their employer-based insurance because they could no longer afford the premiums.
But even those who have managed to hang on to insurance have found it more difficult to pay their medical bills.
In our survey, the median household income of respondents who were underinsured was $58,950, well above the U.S. median; 22 percent lived in households making more than $100,000 per year.
An explanation isn’t difficult to find: Health plans are offloading more and more expenses onto consumers. Co-pays and deductibles have risen steadily in the past several years.
This combination of deductibles and co-pays can quickly add up to serious bills in the case of a major illness. A 2006 study found that 10 percent of insured patients with cancer had out-of-pocket expenses of more than $18,500.
How to pay?
Consumers faced with higher health costs have to find the money somewhere, and many in our survey found that tough to do. Overall, 37 percent said their health insurance and checking accounts together weren’t enough to pay for their medical expenses over the previous year. But 59 percent of underinsured respondents fell in that category. They had to raid their retirement accounts, run up credit-card balances, and borrow from friends and family to pay their medical bills. Twenty-seven percent said they were still in debt to doctors and hospitals, and 3 percent said medical bills had forced them to declare bankruptcy.
Almost 4 in 10 underinsured respondents deferred needed auto or home repairs. Almost 3 in 10 said they made decisions such as changing jobs, postponing retirement, or changing their marital status mainly to preserve access to health insurance.
But the most worrisome result of underinsurance is reduced access the health care itself. Forty-three percent of underinsured respondents said they had postponed going to the doctor because they couldn’t afford it, and 28 percent had put off filling prescriptions.
http://www.consumerreports.org/cro/index.htm (subscription required)
By Don McCanne, MD
Private health plans work for people who do not and never will need health care. But what if medical needs arise? How well do they work?
Thirty-seven percent of privately-insured consumers with higher health costs found that their insurance plus their checking accounts were not enough to pay for their medical expenses over the previous year. And for the underinsured, that rose to fifty-nine percent.
Yet most of our politicians want to build on private insurance plans to provide coverage for everyone, but they do recognize that premiums are no longer affordable for average-income individuals. So what do they recommend? Let’s make premiums affordable by reducing further the coverage provided by the private plans.
What will happen then? Health care will remain affordable for those with insurance plus very large balances in their checking accounts. The rest of us with insurance will have to “raid our retirement accounts, run up credit-card balances, and borrow from friends and family.”
Listen up, Politicians! PRIVATE PLANS WON‘T WORK! Get over it!