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People Struggle to Pay for Care

Even with insurance, people struggle to afford copayments, coinsurance, and deductibles.

Health insurance does not cover everything, and people usually have to pay additional costs on top of what they pay in premiums. Typically, even generous health insurance plans require the insured person to pay the full cost of his or her care up to a certain amount (the deductible) and copayments or coinsurance for health services every time he or she uses them. These out-of-pocket costs can be considerable. For example, in Ohio, 45% of adults reported they had unpaid medical debt. For more information, please see Ohioans’ Experiences with Going into Debt to Pay for Healthcare one-pager. If they are high enough, the insured person is considered underinsured. Sometimes, they can result in medical bankruptcy.

In 2007, the average annual out-of-pocket costs—not counting premiums—for an insured adult were $729. This was 34% higher than in 2004. Americans needing extensive medical care had much higher out-of-pocket costs: In 2007, the highest-spending 1% of people paid $8,703 in out-of-pocket costs in 2007, and the highest-spending 10% paid $3,364. Employer-sponsored insurance covered 81.4% of all workers’ medical bills in 2004, but only 80.1% in 2007. This decrease was the result of more insurance plans requiring deductibles and higher levels of deductible payments.

If affordable coverage is defined as health insurance premiums plus out-of-pocket costs less than or equal to 10% of income, the proportion of people with affordable coverage fell at every income level between 2004 and 2007 (Gabel, et al., 2009). In other words, having employer-sponsored health insurance does not guarantee that healthcare will be affordable, and out-of-pocket costs are rising for everyone over time.

Source

Gabel, Jon R., Roland McDevitt, Ryan Lore, Jeremy Pickreign, Heidi Whitmore, Tina Ding. 2009. Trends in Underinsurance and the Affordability of Employer Coverage, 2004-2007. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.4.w595?ijkey=26IWghF1By26E&keytype=ref&siteid=healthaff.

 

Since 1997, The Health Foundation of Greater Cincinnati has invested over $111 million in projects that improve the health of the Cincinnati area. With major healthcare reform imminent, the Health Foundation aims to be a source for credible, timely information that can inform people in our region about the healthcare reform debate. While we do not support any specific plan or approach, we do support certain principles that we believe would improve access to healthcare and make our region healthier.

The Health Foundation supports a healthcare system that:

Please visit http://www.healthfoundation.org/reform for more information.