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Health Care Economics
Working-Age Americans Bear Brunt of Medical Debt
Psychiatric News
Volume 40 Number 20 page 16-29

Nearly one-third of working-age Americans struggle to pay their medical bills, according to a recent report, with African Americans and women the most financially strained.

A recently released analysis of the 2003 Commonwealth Fund Biennial Health Insurance Survey concluded that an estimated 77 million adult Americans—both insured and uninsured—have difficulty paying medical bills, have accrued medical debt, or both. The latest findings support the conclusions of earlier studies that have found medical debt to be a significant problem, even for those with health insurance (Psychiatric News, March 18).

"Medical bill and debt problems not only create financial hardship but can deter people from seeking further health care," said Michelle McEvoy Doty, Ph.D., a study author and senior analyst at the Commonwealth Fund. "In the long run that situation puts a bigger burden on the health care system because you are missing out on preventive medicine and not managing chronic conditions."

Working-age adults are much more likely to face medical bill problems than Americans aged 65 and older, since pensions and Medicare offer protections for older Americans. The survey found that nearly one-third of the working-age respondents (32 percent) reported struggles with medical bills, while just 14 percent of elderly respondents reported the same. Medical debt was reported by 16 percent of working-age adults compared with 4 percent among adults over 64 years old.

Doty said the larger impact of medical bills on working-age adults stems from private insurers' "much more fragmented" approach to coverage, compared with Medicare's "very reliable" assistance in paying medical bills.

The challenge for working adults trying to pay for health care was even greater than for seniors among those with low incomes. The report found that 48 percent of low-income, working-age adults reported medical bill problems in the 12 months prior to the survey, while only 20 percent of low-income seniors reported such problems.

Working-age women were strongly impacted by the cost of medical care, and 39 percent reported medical bill problems, compared with 25 percent of men.

The survey found that 52 percent of African Americans reported medical bill problems, in contrast to 34 percent of Hispanics and 28 percent of whites, according to the report.

The data stem from a national telephone survey conducted from September 3, 2003, through January 4, 2004, among a random, nationally representative sample of 4,052 U.S. adults. The survey had a 50 percent response rate.

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Health care reform advocates, such as Physicians for a National Health Program (PNHP), said the data support long-held beliefs that the rising cost of health care reduces access to that care, especially among working-age Americans, who lack the Medicare or pension coverage that buffers costs for older Americans.

"Though some protection for the retired is afforded by pension funds, the much larger incomes of the workforce are not adequate to compensate for the deficiencies of private coverage," according to a statement on the results issued by PNHP, which advocates a national, single-payer health system. "Obviously a universal Medicare program with expanded benefits would be much more effective in preventing medical debt."

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Those without health insurance coverage during the study period had significantly higher rates of medical bill problems and debt (60 percent) than did the continuously insured (35 percent).

Rates of medical bill problems for the uninsured were more than twice those of the insured, with 35 percent of those without insurance at some point in the year contacted by collection agents compared with 15 percent of the continuously insured.

However, the possession of health insurance was not enough to prevent large numbers of Americans from incurring a large burden of medical debt. Researchers found that 57 percent of adults with medical bill problems and 70 percent with medical debt were insured at the time their financial obligation was incurred.

"As employers continue to pass on health care costs to their employees, you are going to see more people struggling with their medical bills and accruing debt," Doty said.

A survey of 1,800 firms released in September by Mercer Human Resources Consulting found more employers are struggling with ways to cover what is expected to be a nearly 10 percent increase in health insurance costs for 2006 and plan to shift more of the burden of paying for medical care to their employees. Despite the expected 10 percent increase, employers polled plan to increase their spending by only 6.4 percent and have their employees make up the difference.

Medical bill problems and inadequate insurance, said the Commonwealth survey analysis, were also linked by inadequate or absent prescription drug coverage. Nearly half of working-age adults without prescription coverage in their insurance plan had problems covering the medical costs, compared with one-third who did have prescription drug benefits.

The study also found that medical bill burdens and medical debt reduced Americans' access to health care, with 63 percent of adults with medical debt problems forgoing needed care within the preceding year due to cost. Only 19 percent of adults without medical bill challenges avoided seeking needed health care.

The study found 43 percent of workingage adults experiencing medical bill or debt problems failed to fill a prescription because of cost, compared with just 9 percent of adults not enduring such problems.

Even after adjusting for insurance coverage, income, health status, and other variables, the researchers found that Americans with problems paying health care bills were much more likely to leave a prescription unfilled, forgo a needed physician's visit, or skip recommended tests or follow-up visits than were adults less challenged by medical costs.

The study found as well that 23 percent of those struggling to pay medical bills did not see a specialist when needed, compared with 6 percent without such bill-paying challenges. Thirty-seven percent with medical bill problems skipped medical tests, treatment, or follow-up, while only 6 percent of those without bill problems did so. Additionally, 42 percent of those with daunting medical bills had a medical problem but did not visit a physician or clinic for treatment, far more than the 8 percent without difficult medical bills and did not seek needed assistance.

"People who have bills and debt are more likely to have health care access problems," Doty said.

"Seeing Red: Americans Driven Into Debt by Medical Bills" is posted at<www.cmwf.org/usr_doc/837_Doty_seeing_red_medical_debt.pdf>.

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