Study: Uninsured Face Similar Debt as Medi-Cal Beneficiaries

More Californians are borrowing money to pay for health care services — and two-thirds of them have medical insurance, according to a new study by the UCLA Center for Health Policy Research.

“When you think you’re insured, you still end up paying a percentage and that adds up, into thousands of dollars,” report author Shana Alex Lavarreda  said. “So having insurance doesn’t mean you will have things paid for.”

Another surprising finding, Lavarreda said, is that uninsured Californians face a similar medical debt level to those who have insurance through Medi-Cal.

“You would think, in a system where everything is paid for, where medical services are basically free, that the debt would be lower than if you were just uninsured,” Lavarreda said. “Clearly, Medi-Cal doesn’t offer all of the care they need, so they go elsewhere for care.”

The big, uncovered expense for Medi-Cal beneficiaries is dental care, Lavarreda said. Dental care used to be covered, but was eliminated as an optional Medi-Cal benefit.

“When you pay in a fee-for-service way, most people under the poverty level can’t afford it, so they go into debt to get that care,” she said. “I think there needs to be more recognition that this is a vital service. Those services were eliminated as optional benefits, but the people in need of health care don’t find them optional.”

According to the report, 2.6 million non-elderly Californians had some kind of medical debt in 2009 — an increase of 400,000 since 2007.

At the moment, Lavarreda said, she is not aware of any health care consumer protection bills that are going through the Legislature. She said last year’s AB 1503 (Ted Lieu, D-Torrance) was one of the few bills to address medical debt, by requiring emergency departments to charge the uninsured the same price as insured patients pay.

“It’s a different story this year, she said. “One of the reasons we focused on medical debt is that it has really died down, legislatively,” Lavarreda said.

Regulating insurance rates could help address medical debt, she said, but after last year’s turmoil over AB 52 by Assembly member Mike Feuer (D-Los Angeles) makes it , unlikely to move foreard in the Legislature. However, there now is a statewide effort to put that issue on the ballot in November.

“It didn’t work in a Democratic-majority Legislature with a Democratic governor,” Lavarreda said, “so that would seem to be the natural next step.”

Lavarreda noted one other significant note from the study: The demographics of medical debt are not just concentrated in rural areas. “When we looked at areas hardest hit,” she said, “the urban areas were hit as much as rural areas. You’re looking at huge job loss and loss of insurance at the same time.”

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