The Price We Pay for Medical Care

By REED ABELSON

Americans seem to be paying the price for the unrelenting rise in health care costs in this country, according to several studies being published on Thursday in Health Affairs, an academic journal.

The higher cost of coverage has taken a huge cut in the increase in income earned by the average family, says one study, and lower-income families are particularly hard hit, according to another. Meanwhile, the numbers of people who cannot afford insurance or do not have enough coverage have significantly increased, according to a third study.

In an analysis of just how much of a family’s paycheck is being gobbled up, analysts from Rand looked at how much of the average increase in a family’s gross annual income over the past decade has gone to pay for health care.

While the family saw an increase in income from $76,000 a year in 1999 to $99,000 a year in 2009, the researchers then deducted what they estimated would go to pay for insurance premiums, deductibles and co-payments and taxes to support Medicare and Medicaid. By the Rand calculation, if the cost of health care had been in line with overall inflation, the average family would have had nearly $5,400 in additional income a year that they could have spent.

The bottom line: Americans have less and less money to spend “on everything else” because they are forced to devote so much of their income to health care.

The authors conclude: “Given the perilous state of the US economy, the fiscal burdens imposed on ally payers by steadily rising health care costs can no longer be ignored.”

In a second study, researchers make the case that lower-income families are even more burdened by the high cost of medical care than those who are better off. Patricia Ketsche, a researcher from Georgia State University, and others calculated that low-income families pay more than 20 percent of family income toward health care, looking at both private spending and taxes, while other families who make more pay no more than 16 percent of their family income.

A third analysis looks at the unaffordability of health care by estimating how many people were without adequate coverage in 2010. The study, by the Commonwealth Fund, estimates some 29 million Americans were underinsured and about 52 million were or had been recently without coverage. Those 81 million adults compare to an estimated 75 million in 2007 and 61 million in 2003.

While the Commonwealth study suggests the federal health care law has the potential to significantly lower the number of people with insufficient or no coverage, the researchers also emphasize the need to reign in health care costs. “To ensure that premiums and care remain affordable, efforts to slow rising costs of care and reduce waste, duplication, and care of little value must intensify,” they say.

The September issue of Health Affairs is focused on health care costs, and the two studies that look at how American families are affected are available online for a week and afterwards by subscription. The Commonwealth Fund report will remain available on-line without a subscription.

No Job, No Insurance, No Health Care

Workers who lose their jobs in the economic downturn typically suffer a double whammy: they lose not only their incomes but their employer-based health insurance as well. Millions are forced to forgo the medical care that they cannot pay for.

The depressing facts are laid out in the Commonwealth Fund’s latest biennial health insurance survey. An analysis of the data found that nine million working-age adults who lost their jobs between 2008 and 2010 became uninsured. Most of those could not find affordable coverage from insurance companies, and some were turned down when theyapplied.

Of that number, nearly three-quarters delayed needed care because of the cost. They were sick but did not visit a doctor, or chose not to fill a prescription, or skipped a recommended test, treatment or visit to a specialist.

Nearly three-quarters had problems paying medical bills when they did visit a doctor or a hospital. They used up their savings, struggled to pay medical debts over time, took out loans when they could, declared bankruptcy or ended up unable to pay for other basic necessities like food or housing.

Substantial help will not arrive until 2014, when the major provisions of the national health care reforms kick in. The reforms will provide subsidies to help millions of Americans buy insurance on new exchanges and will greatly expand Medicaid coverage for the poor.

In the interim, Congress should extend unemployment benefits to help the jobless pay for health care. It should also re-establish the subsidies provided by the 2009 stimulus package that helped laid-off workers stay on their former employers’ policies while looking for work.