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Report: 1 in 3 Americans Burdened With Medical Bills

Photo by Nancy R. Cohen.

It’s clear this election season that the politics of health care costs and coverage remains a major lightning rod. But a study published Tuesday shows that some grim statistics continue to bind Americans of both political stripes.

In 2011, one in three Americans were part of a family that would call their medical bills a “financial burden.” One in five struggled to pay those bills each month and one in 10 admitted they wouldn’t be able to pay them at all. Perhaps just as startling: even for those who have private insurance, 26.7 percent needed to stagger their medical payments because they couldn’t afford to pay off those bills entirely at the end of the month.

The latest sign of the times, painted by the Centers for Disease Control’s National Health Interview Survey, confirms just how much the nation is weighed down by ballooning health care costs:

After speaking with 52,000 people between January and June of 2011, the researchers also concluded that the chances of having trouble paying medical bills decreased with age. According to Robin Cohen, a statistician and principal author of the report, children 17 years old and younger were more than three times as likely as adults aged 75 and over to be in families having problems paying medical bills in the past year.

Check out the survey’s full results here. Before last year’s survey, the CDC hadn’t asked participants to answer questions about medical debt, making the 2011 numbers a “baseline” for future research but one offering little comparison to the past, Cohen said.

But according to Peter Cunningham, senior fellow for the Washington-based Center for Studying Health System Change, the CDC’s new stats track pretty closely with the frequent surveys conducted by his own group. Below, Cunningham provides some context for the CDC report:

Q: So just how closely does this CDC report line up with your own findings?

Cunningham: Actually they compare very well. For the initial question — whether people experienced problems paying medical bills — both surveys estimated that about 1 in 5 Americans have troubles there. The difference between this CDC survey and ours is they have asked some additional questions. One I thought was particularly interesting was whether these survey participants also have medical bills they cannot pay. Roughly 10.5 percent of them said that they did, which basically means half the people who have reported that they’re having difficulty paying their medical bills aren’t able to pay them at all.

Q: Are these numbers indicative of larger trends?

Cunningham: Absolutely. When we talk about problems associated with health care costs, it’s important to look at the impact on family finances. Is the family being forced to cut back on other things — and the answer is often yes. They need to cut back on basic necessities, food and clothing. They need to borrow money, take money out of savings in order to pay for their medical bills. That’s one side to it. But the other important thing to point out is that when people have trouble paying medical bills, they often put off or don’t receive additional or follow-up care they may need. They don’t want to accumulate more bills on top of their current ones. And so all of this has a cumulative negative impact on their health.

Q: What are the numbers telling us over time?

Cunningham: Our most recent survey was in 2010, and we also conducted it in 2003 and 2007. Between 2003 and 2010, we definitely saw an increase in people reporting medical bill problems. In 2003, the number was about 15 percent and in 2010, it was up to 21 percent — a pretty big jump. That number lines up roughly with the 20 percent reported by the CDC from the first half of 2011. A lot of this increase is probably as expected. In the early 2000s, we were in a period when health care costs were rising faster than incomes, and employers were shifting much more of their health care costs onto workers in the form of premiums, deductibles and co-payments.

The other interesting thing is that most of the increase occurred between 2003 and 2007, with almost no increase between 2007 and 2010. That’s initially surprising because obviously that was the period that includes the Great Recession, when a lot of people were losing their jobs and their employer-based health care coverage. What we think happened during that period is that because of the recession and all the financial problems going on, people started pulling back on health care spending and utilization. A lot of debt and bills had just kind of hit a wall, and we went through a period of cutting back, trying to pay down those debts.

Q: The CDC report found that children were three times as likely as elderly adults to be in families having problems paying medical bills. Does that remain consistent with your findings?

Cunningham: Yes, we’ve seen the exact same trends. Some of it reflects the age of the family. Differences in insurance coverage — younger families being much more unlikely to be insured. Because of Medicare, seniors are much more universally covered than small children and young people. But some of that also reflects where people are in their lives. Young parents are typically financially strained on a number of different fronts — mortgages, tuition, the everyday costs of raising a family. A lot of things are competing for their dollars, whereas the elderly are often at a point in their life where their expectation is that they will have health problems, they’re going to have prescription drug costs and they need to budget for them. So to some extent, they’re going to be in a better position to absorb that.

Q: Has your group looked at how all of this might be impacted by health care reform?

Cunningham: We haven’t looked at it explicitly. But we do expect, certainly, that some of these trends will continue. For example, lower-income people will continue to be much more likely to have trouble paying their medical bills than those with higher incomes. But to some extent, things could get better for the low-income people who will receive new coverage through the Medicaid expansion and the development of health insurance exchanges. There’s some expectation that that will have a pretty significant effect. But we also expect that the Affordable Care Act is not going to do much about the affordability of employer-sponsored coverage, and that’s where we’ve seen the biggest increases among all the types of coverage. Now there is a provision in the ACA that says that if you spend more than 9.5 percent of your income on premiums, you’re allowed to opt out of employer-sponsored coverage. But otherwise people will be required to sign up with their employer’s health plan and obtain coverage in that way. For these people, the ACA really isn’t going to have a big effect on their medical bills.

Graphics courtesy of CDC – National Center for Health Statistics.

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