The number of underinsured adults nationwide has grown at a startling rate over the past four years, researchers said, as the cost of healthcare keeps rising. The individual health insurance market is contributing to the problem, and most states are failing to protect consumers against abuses, according to two studies released last week.
The underinsuredthose with health insurance all year but also with high out-of-pocket medical expensesgrew by 9.2 million people from 2003 to 2007. A total of 25.2 million adults between the ages of 19 and 64 are now underinsured nationwide, according to the Commonwealth Fund.
Most affected were the middle class who work for small businesses or have individual policies. Underinsured rates nearly tripled for those with family annual incomes above $40,000, according to the report.
The underinsured look a lot like the uninsured, said Cathy Schoen, senior vice president of the Commonwealth Fund, and lead author of the study. You can have healthcare all year long and still face medical debt.
Some 45% of the underinsured said they have difficulty paying medical bills, comparable with the uninsured, of whom 51% reported trouble paying medical bills. By contrast, 21% of the fully insured said that they had trouble paying medical bills, according to the report, which used data from the Commonwealth Funds biannual telephone health insurance survey of 3,501 people.
Rising costs led the uninsured to forgo necessary medical care, such as filling prescriptions, seeing a doctor and getting tests. Some 53% of the underinsured went without needed care because of cost, compared with 68% of the uninsured and 31% of the fully insured.
The authors identified the underinsured as people who spent 10% or more of their income on out-of-pocket medical expenses, or 5% of income for those with incomes under $40,000 a year. People with deductibles equal to 5% or more of family income were also included.
More cost-sharing, especially among smaller employers, and individual coverage changes are fueling the trend. What were finding is an erosion of what a premium buys on the market, Schoen said.
But lawmakers are doing little to protect consumers from premium surcharges and costs on the individual market, according to a survey of laws in all 50 states by Families USA. In 35 states and the District of Columbia, there are no limits on how much insurers can raise premiums based on an individuals health status. In 29 states and the district, insurers can rescind coverage based on a long-ago pre-existing condition. In 21 states and the district, insurers can exclude coverage for pre-existing coverage, such as cancer and heart disease, for more than one year.
So you can have insurance that doesnt pay for the care you need the most, said Ron Pollack, executive director of Families USA. We think it is essential for the federal government to provide a floor of protections.