Americans Spending More of Their Income to Pay Medical Bills

Low and moderate income families are feeling the heat of negative economic trends and higher health care costs by joining the ranks of the uninsured, underinsured and those facing more medical debt,   according to a new report by the Commonwealth Fund.

The report, “Losing Ground: How the Loss of Adequate Health Insurance is Burdening Working Families,” said 53 percent of adults in families with income less and $20,000, and 36 percent of adults earning between $20,000 and $60,000, spent 10 percent or more of their income on health care.  Among those earning between $40,000 and $60,000, 36 percent spent 10 percent more of their income on health care, up from 18 percent in 2001.

The report’s authors, PhDs Sara R. Collins and Michelle M. Doty, and Jennifer L. Kriss and Sheila D. Rustgi found that in 2007 an estimated 50 million U.S. adults were uninsured for some time during the year, up from 38 million in 2001. Meanwhile, insured U.S. adults whose out-of-pocket expenses, excluding premiums, left them significantly underinsured increased five percent between 2003 and 2005 to as many as 25 million people, the report said.

As a result, 72 million working age adults said they had problems paying their medical bills or paying off accrued medical debt during the past year, up from 58 million people who reported having difficulty paying their medical bills in 2005.

“A perfect storm of negative economic trends is battering working families across the United States,” wrote the authors of the report, which was published Wednesday. “More adults are struggling to pay their medical bills and are accumulating medical debt over time.” 

The report said 28 percent of the U.S. population reported paying off medical debt in 2007. Twenty four percent of that group said they were carrying $4000 or more in medical debt.  Another 12 percent said they had medical balances of $8000 or more.

In coping with the financial burdens of higher health care costs, 45 percent of U.S. adults said they skipped medical care in 2007. Additionally, 29 percent were unable to pay for food, heat or rent because of their bills, while 39 percent used their savings to pay bills, and 30 percent took on credit card debt, the report said.

“The evidence paints a vivid portrait of the U.S. health care system as experienced by families with low and moderate incomes,” the authors concluded in the report. “The time has never been more urgent for policymakers to forge ahead on solutions to the nation’s worsening health insurance problem.”