Privately Insured Chronically Ill Struggle to Pay Medical Bills, Study Finds

An increasing percentage of privately insured workers with chronic illnesses are spending more than 5% of their annual income on out-of-pocket health care costs as more employers shift costs to employees, according to a study released Thursday by the Center for Studying Health System Change, the Wall Street Journal reports (Fuhrmans, Wall Street Journal, 9/23). The study, which was based on a nationwide survey of 24,500 families, found that more than 20% of the 57 million working-age Americans with chronic medical conditions -- both insured and uninsured -- had trouble paying medical bills in 2003. Among U.S. residents ages 18 to 64, chronically ill individuals were nearly 60% as likely to spend more than 5% of their income on medical care as people without chronic health problems (Rapaport, Sacramento Bee, 9/23).

According to Ken Sperling, a consultant at Hewitt Associates, the average individual probably spends about 2% of his annual income on out-of-pocket health care costs (Agovino, AP/Albany Times Union, 9/23). The study found that the percentage of low-income, chronically ill patients with private health insurance who spent more than 5% of their income on medical care increased to 42% in 2003 from 28% in 2001, and about 33% of those people lived in families that had problems paying medical bills. The study defined low income as people with annual incomes below 200% of the federal poverty level. In addition, the study found that 10% of chronically ill, low-income workers with private health insurance reported going without needed medical care in 2003, while 30% reported delaying care and 43% reported not filling a prescription (Sacramento Bee, 9/23).

Among uninsured people with chronic illnesses, 40% reported paying more than 5% of their annual income for medical care, a slight decrease from 42% in 2001, according to the study (Wall Street Journal, 9/23). Nearly 50% of uninsured people reported living in families that have problems paying medical bills; about 40% of those individuals reported forgoing care, 66% reported postponing care and 70% reported not filling a prescription, according to the study (AP/Albany Times-Union, 9/23).

Among all people who reported having problems paying medical bills, 68% said they also had problems affording necessities such as food and shelter, 55% reported delaying major purchases, 64% said they were contacted by a collection agency and 50% reported having to borrow money. More than 90% of families that have problems paying medical bills said they experienced at least one of these problems, and nearly 25% experienced all four problems.

Study author Ha Tu, a health researcher at HSC, said, "The extent of the cost burden and the degree to which it impedes timely access to medical care are surprising and cause for concern" (Sacramento Bee, 9/23). Tu added, "Health insurance coverage is just no longer offering as much protection as it did in the past against financial problems" (Wall Street Journal, 9/23). HSC President Paul Ginsburg said, "The study provides strong evidence that rising health costs and increased patient cost sharing are taking a heavy financial toll on low-income, chronically ill people, even if they have private health insurance" (Sacramento Bee, 9/23).

He added that it is "pennywise and pound foolish" to continue shifting health care costs to those with serious medical problems because foregoing preventive care eventually will result in costlier treatment at a later date. Ginsburg said that he does not see a near-term solution to the cost-shifting trend but added that he hopes more employers will begin to alter health care benefits so that employees with chronic conditions pay lower or no copayments than workers without serious illnesses. Ron Pollack, executive director of Families USA, said, "Health care costs will continue to exert downward pressure on wages. So whether it's overt or covert, people wind up spending more of their own money on health care costs" (AP/Albany Times Union, 9/23). The study is available online.