Ranks of underinsured U.S. adults increase 60%

underinsured increased 60 percent between 2003 and 2007 to more than 25 million, a study released today found.

Ranks of underinsured U.S. adults increase 60%

Victoria Colliver, Chronicle Staff Writer

Tuesday, June 10, 2008

The number of adults nationwide who have health insurance but face financial risk due to high out-of-pocket expenses – known as the underinsured – increased 60 percent between 2003 and 2007 to more than 25 million, a study released today found.

Middle- and higher-income families, those with annual incomes of at least $40,000, experienced the sharpest increase among the uninsured, nearly tripling from 4 percent in 2003 to 11 percent in 2007, according to the study by the Commonwealth Fund, which was published online in the journal Health Affairs.

While an estimated 47 million Americans have no insurance at all, health experts say people who are required to pay high deductibles and co-payments for limited benefits often go without care due to costs.

“Lack of insurance is only one part of the problem as even the insured have serious gaps in coverage,” said Karen Davis, president of the Commonwealth Fund, a private fund that supports independent health research. “Insurance coverage is the ticket into the health care system but, for too many, that ticket does not provide genuine access to care.”

The study based its data on a survey of about 3,500 adults conducted from June to October 2007. About three quarters of the respondents were between the ages of 19 and 64 years old, meaning most were working adults who were not yet eligible for the federal Medicare program.

Those defined as underinsured had health insurance all year but had out-of-pocket medical expenses of at least 10 percent of their income, or 5 percent for those with low incomes.

The report’s authors said people with individual or small-group coverage, typically those who worked for a small business or were self-employed, were more likely to have insurance that required substantial cost sharing than those with coverage through large employers.

Forty-five percent of the underinsured reported difficulties paying their medical bills, being contacted by collection agencies for unpaid bills or changing their way of life to cover their health expenses.

“Here in the United States, you can have health insurance all year long and still go into medical debt or face bankruptcy,” said Cathy Schoen, senior vice president of the Commonwealth Fund and lead author of the report.

A 61-year-old San Mateo County woman, who declined to be identified out of fear that she could lose her policy, said she’s incurred $35,000 in out-of-pocket medical expenses in the last six years despite never having a gap in health insurance.

“I’ve put stuff on credit cards up to my elbow,” she said. She and her husband changed their lifestyle to afford their share of medical costs, but have not had to file for bankruptcy.

Some of her uncovered expenses include $5,000 for her share of three MRIs conducted in January 2007 for a back injury and a recent $1,750 bill for three injections that were not covered by her Anthem Blue Cross small-group business policy. The policy costs $1,000 a month for her and her husband along with a $5,000 annual deductible.

“The rates keep going up, but they keep cutting services,” she said, noting that she still feels fortunate to have health insurance.

To read the report, go to commonwealthfund.org or healthaffairs.org.

Insured, but vulnerable

A study released today by the Commonwealth Fund found that people who had health insurance all year but were required to pay high out-of-pocket expenses experienced some of the same problems as those with no health insurance at all. According to the study:

— About 68 percent of the uninsured and 53 percent of the underinsured said they went without needed care because of cost, compared with 31 percent of those with adequate insurance.

— Nearly half – 45 percent – of the underinsured reported financial stress due to medical bills. About 51 percent of the uninsured and 21 percent of those with better coverage said they experienced similar financial difficulties.

Source: Commonwealth Fund

E-mail Victoria Colliver at vcolliver@sfchronicle.com.

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