By Martha Heberlein
Two studies just out in the September issue of Health Affairs highlight the troubles many face in affording health care coverage.
The first study by researchers at the Commonwealth Fund found that over the past 7 years the number of people who had coverage year-round, but were considered “underinsured” rose by 80%. (The authors define “underinsured” as having out-of-pocket medical expenses amounting to 10% or more of income (5% for those under 200% FPL) or a per person deductible of at least 5% of income.) As a result, 81 million adults (44%) were either uninsured or underinsured in 2010, up from 61 million in 2003. The risk was greatest for those with lower incomes – 77% of those with income less than 133% of the FPL were either underinsured or uninsured.
The study also found that these folks go without needed health care and struggle to pay medical bills. In fact, the rates of forgone care among the uninsured were three times as high and the rates among the underinsured were twice as high as rates reported by adults with adequate coverage.
Couple this with the second study and you get a more complete picture of why a greater number of people are spending such a large share of their income on health care and are considered “underinsured.” The authors, two RAND researchers, found that between 1999 and 2009, the median income for a family of four with ESI grew about 30%, from $76,000 to $99,000. However, this gain was almost entirely offset by an increase in what they spent on health care. During this same time period, premiums rose 128% and out-of-pocket spending rose 78%. After taking into account other necessary spending, such as food and shelter, families were left with just $95 extra to spend on other priorities.
As the Commonwealth researchers say in their conclusion, “the erosion of health insurance for the working-age population, combined with stagnation in real family incomes over the past decade, has put uninsured and insured adults alike at risk of spending substantial shares of their income on medical care.” But health reform provides hope – if it guarantees affordable and adequate coverage to those with modest incomes, the number of underinsured could drop by 70%.
