Even families with healthcare insurance report difficulty in paying medical expenses, analysis of data gathered in 2003 indicates.

In all, almost 20 million American families—representing 43 million people—reported some problems paying medical bills in 2003, according to newly released analysis from the study by The Center for Studying Health System Change (HSC).

Two-thirds of families who said they had difficulty paying medical bills have health insurance coverage, according to the survey managers.

Medical debt also affected families' ability to pay other basic necessities—rent, mortgage payments, transportation or food.

The study did indicate, however, that the problem was more acute for families with a combined annual income of under $38,000.

Another consequence reported was that many families with medical payment bills skipped visiting healthcare providers and taking regular dosages of prescribed medicines. This in turn could lead to deteriorating overall wellness.

People in families with medical bill problems also reported much greater trouble getting care because of cost concerns—one in three did not get a prescription drug, one in four delayed care and one in eight went without needed care.

HSC reported that many lower income Americans are unable to pay for medical care, a problem that may be worsening because of rapidly rising costs, greater numbers of uninsured Americans, more patient cost sharing for insured people and higher levels of existing consumer debt. Nearly half of all personal bankruptcies are due in part to medical expenses, HSC said.

Many Consequences

New findings from HSC's nationally representative 2003 Community Tracking Study (CTS) Household Survey indicate that many more Americans face the less drastic but still serious consequences of medical debt.

When asked "During the past 12 months have you or your family had any problems paying medical bills?" about 20 million families, or one in seven American families, reported problems paying medical bills.

Not surprisingly, uninsured families—in which all family members are uninsured—are about twice as likely to report medical bill problems as insured families (23.7% for uninsured families compared with 11.4% for insured families).

However, insured families—in which all members have coverage—comprise the majority (68%) of families with medical bill problems. Even with insurance coverage, many families face higher out-of-pocket medical expenses because of rising deductibles, co-payments and coinsurance, where patients pay a percentage of the total bill.

HSAs Can Help

HSAs were designed to help families over some of these bumps in yearly medical costs. For middle-income families, out-of-pocket expenses below $2,000 can be managed. Having an HSA makes this process a little easier.

What is important to remember out of the survey is that medical expenses for a majority of the reporting families was less than the $5,000 family set aside permitted under the new regulations.
High out-of-pocket medical costs, low incomes, lack of health insurance coverage and inadequate coverage all can contribute to problems paying medical bills. About 35 percent of families with high out-of-pocket costs—defined as $2,000 or more in the past year—reported problems paying medical bills, compared with 6.6 percent of families with out-of-pocket medical expenses of $250 or less.

Among non-elderly families, privately insured families were less likely than publicly insured families to report problems paying medical bills, primarily because the privately insured tend to have higher incomes and fewer health problems.

However, even modest out-of-pocket medical expenses can cause difficulties for low-income families, who also are more likely to be uninsured. About one-fifth of low-income families—those with family incomes less than 200 percent of the federal poverty level, or $36,800 for a family of four in 2003—had problems paying medical bills, compared with 7.4 percent of families with incomes 400 percent of poverty or higher. And while about one-third of families overall have incomes below 200 percent of poverty, about half of all families with medical bill problems are low income.