The estimates are sobering, if unsurprising. They are also an incomplete snapshot of the financial burden that medical bills place on uninsured households, the authors noted. The research did not include bills from doctors, ambulances or other services independent from the hospital.
The results suggest most uninsured household budgets have almost no ability to withstand a hospital stay, with limited exceptions. Those with the most assets among the 11% of uninsured households with income of at least four times the federal poverty level could pay most or all hospitals bills. And those with income between two times and four times poverty threshold and assets in the top 90th percentile could cover about half of hospital bills.
For more recent research on the distress associated with medical debt, read prior posts on bankruptcy and health insurance benefits or a related study on bankruptcy and Medicaid coverage.
Using survey data on household assets and 2008 sample figures on hospital costs and bills, the HHS report estimated uninsured households could pay off 5% of bills for hospitalized patients.
Notably, that meager amount was after households emptied out retirement and savings accounts and cashed out stocks, bonds, mutual funds and other liquid assets. “The analysis also assumes that uninsured people would be willing and able to use all of their financial assets to pay medical bills, but that they would not have recourse to their non-financial assets (such as the value of their homes) to pay these bills,” the report said.
That may not be realistic should households need assets to pay for living expenses, the report acknowledged. Households may turn to other financing options not considered in the analysis, such as loans or the sale of a home.
Liquid assets are strikingly small to start with among the uninsured, the report said. Half had assets that totaled $20 or less, and among those living closest to poverty, household resources were unsurprisingly even more limited. Researchers with the Agency for Healthcare Research and Quality reviewed Medical Expenditure Panel Survey from 2006-2007 to gather asset data.
In 2008, hospitals admitted 2.1 million uninsured patients. Roughly six out of 10 (58%) faced hospital bills of at least $10,000 and accounted for about 90% of the $47.9 million billed for uninsured hospitalized patients that year.
Authors of the report also underscored an argument popular with hospital executives: When patients cannot pay, everyone else bears some of the costs. “In these cases, the uncompensated care costs must be absorbed by providers or shifted to other payers, including federal, state and local governments and private insurers,” the report said.
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