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More Than 25 Million Americans Underinsured, Study Finds

June 10, 2008 at 6:45 PM EST
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More than 25 million Americans with health insurance did not have sufficient coverage for their medical expenses in 2007, according to a study released Tuesday in the journal Health Affairs.
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JEFFREY BROWN: For many years now, the problem of the uninsured has been growing. Today, some 47 million Americans have no health insurance.

Now researchers are focusing again on another significant issue: the underinsured, those who have insurance coverage, but still struggle to pay their medical bills.

Last year, 25 million Americans, 1 in 5 under the age of 65, were underinsured, up from 16 million in 2003, according to a new report by the Commonwealth Fund, a nonprofit foundation that studies health policy issues.

The report was released today in the journal Health Affairs. Cathy Schoen, the study’s lead author, joins us now. Also with us is Susan Dentzer, now the editor-in-chief of Health Affairs and, of course, previously our longtime health correspondent.

And welcome back to you.

SUSAN DENTZER, Health Affairs: Great to be back, Jeff. Thanks.

JEFFREY BROWN: Let me start with you, Cathy Schoen. Now, let’s explain a little bit more about what we mean by “underinsured.” Who are we talking about? How do they qualify?

CATHY SCHOEN, The Commonwealth Fund: We’re talking about people who had insurance all year long, paid their premiums, but they have such poor protection that it left them paying 10 percent or more of their income for medical bills, the part of the medical bill that the insurance didn’t pay, or if they were low-income, 5 percent of income, or the deductible alone equaled 5 percent of income.

And a lot of these had two deductibles, three deductibles in the family. So they were at risk both of medical debt, going bankrupt, but they also were going without care.

JEFFREY BROWN: And your study makes pretty clear that this is now hitting people more — middle-class people.

CATHY SCHOEN: Absolutely. One of the disturbing things in this study is that it’s moved right up the economic ladder. The rate in the middle- and upper-income families has tripled over the last four years. So we’re losing health and economic security in these families.

Pre-existing health conditions

JEFFREY BROWN: Susan, when you look at this, are these people who know they're underinsured? Or they feel like they have insurance and then what happens? When do they realize?

SUSAN DENTZER: I think they especially feel underinsured when they get very sick. We know that about 10 percent of the people in this country account for 64 percent of all health care dollars spent.

And it's that population in particular -- they're chronically ill people, they've got diabetes, hypertension, what have you -- when they get sick and they have these kinds of policies, policies that have not only the large deductibles, the high premiums to begin with, but also on top of that don't cover a lot.

For example, if you're buying coverage on the individual insurance market and you're one of these people, it's quite likely they're going to write out of your coverage the precise thing you need the coverage for, your pre-existing condition.

So if you're on the hook for that yourself, you're paying those bills directly out of pocket, you feel really hammered. And it's this part of the population that really creates special concern.

JEFFREY BROWN: And this goes to the why it's happening. I mean, is it that the policies are not as comprehensive as they once were?

CATHY SCHOEN: Absolutely. Absolutely.

SUSAN DENTZER: And there have been several trends. One is, because health insurance is so -- becoming so unaffordable, premiums overall have gone up 91 percent since 2000, from 2000 to 2007. Wages have only risen 24 percent.

So health insurance is unaffordable. More costs are being shifted to individuals to pay these out-of-pocket shares just to keep the coverage. And you put all of that together into the mix, it creates these huge gaps in people who have to buy coverage, especially people who have to buy coverage on the individual insurance market.

CATHY SCHOEN: And I would add it's also a small business concern. Small businesses don't have the leverage a large company has, so a bigger share of the premium often stays with the insurance company, and then they end up buying less benefits.

And in addition to what Susan said about your condition might not be covered, sometimes the total amount they'll pay for drugs or for an incident of care is capped and you go right through the cap. So they'll only pay so much for cancer care or they don't cover these drugs or they cap it, and you're stuck paying the remainder of the bill.

Small businesses susceptible

JEFFREY BROWN: Are you looking mostly at people who have their insurance through their employers? Or is it...

CATHY SCHOEN: This was a broad-based survey of adults. The majority had it through the employer market, as most of us get our coverage there, but they were particularly likely to work for small firms or be buying it on their own, self-employed, small firm managers, so that part of the market is particularly susceptible to this erosion.

JEFFREY BROWN: And this big jump that we're seeing, that's because the kinds of changes you're both talking about have -- well, we've all seen it in the last few years.

CATHY SCHOEN: That's right. And so it's a struggle. You're trying to hold onto your insurance, and the deductible going up, a limit here or there does a slight decrease in the premium, and that's the only premium you can buy anymore, it's the only coverage that's being offered.

JEFFREY BROWN: To what degree -- what are the consequences? To what degree are we seeing people impacted in the kind of choices that they make or don't make, in terms of their treatment?

SUSAN DENTZER: Well, as Cathy's study showed, the underinsured population behaves a lot like the uninsured population does.

If you're uninsured, it's very likely that you'll postpone going to the doctor when you need to go. You'll probably not get the kind of preventive care, screenings and so forth, that you need.

Underinsured population behaves exactly the same way for obvious reasons. They're on the hook for a lot of those bills, and they simply can't afford it. So that's one very real outcome.

CATHY SCHOEN: And they end up putting their health at risk then. So they make a choice, "I can take my diabetes medicine, but I can't get my mammogram." Or, "I'm going to take care of my children's health problem, but I'm going to wait and just hope that I'll be OK without the recommended care."

JEFFREY BROWN: And you see people going into medical debt...

CATHY SCHOEN: Absolutely. You know, one of the disturbing things we're finding -- not only are they struggling paying bills, but when you say, "What does that struggle mean?" They took out a loan; they took out new credit card debt; they took out a mortgage on their house.

So they're going to be still facing these bills, plus interest, next year and into the future.

Health care key issue in politics

JEFFREY BROWN: So how much of this discussion is bubbling up to corporations, to policymakers, to politics? Where are we at in thinking about this?

CATHY SCHOEN: I think this is why we're seeing health care rise to the top of one of the core economic security, as well as health issues, in the presidential debates.

When you talk to families, middle-income families, if they have a policy like this, they're probably worried. They may not have hit our count because they didn't get sick this year, but they don't feel well-protected, and so the insured, as well as the uninsured, are looking for national leadership around this issue.

JEFFREY BROWN: What do you see, Susan?

SUSAN DENTZER: Absolutely. It means that if you put together this study's number, 25 million underinsured people, on top of almost 50 million uninsured people, you've got 75 million people, 42 percent of the population under the age of 65, that is really at risk for basically having completely inadequate health care.

And what that feeds into in the policy level is a sense that, when we get into talking about national or hopefully -- at least hopefully for some -- system-wide reform next year, we're going to have to be addressing the issues of coverage for the people who have coverage.

We're going to have to be talking about, what things need to be in the benefit package? How much does coverage have to be subsidized for these low- income people who are particularly susceptible to having poor coverage, unless they get some help?

So it really broadens the discussion well beyond just the uninsured.

JEFFREY BROWN: All right, we'll have to leave it there. Cathy Schoen and Susan Dentzer, thank you both very much.

SUSAN DENTZER: Thanks, Jeff.