Think the Insured Can Afford Their Medical Bills? Not So, New Survey Finds

Despite the recent federal law requiring that most Americans buy health insurance or pay a fine, this mandated insurance coverage still fails to protect a significant percentage of Americans. A new Kaiser Family Foundation/New York Times survey challenges a narrative put forth by many policymakers — the notion that patients do not have enough “skin in the game.” To the average American, this is nonsense.

Millions of Americans not only have skin in the game, but also muscles, tendons and bones. The survey finds that one in five working-aged Americans with health insurance coverage experienced problems paying medical bills that caused serious financial problems. Not surprisingly, the uninsured are even harder hit by the problem of unaffordable healthcare costs with more than half (53%) experiencing problems paying medical bills.

Some might be surprised to learn that health insurance fails to protect people. Unfortunately, ever-increasing healthcare costs have shifted more first-dollar coverage onto patients in the form of high deductibles, substantial co-payments and even co-insurance (where the patient pays a percentage of the bill rather than just a fixed co-payment amount). The survey found that 75% of those with insurance who experienced medical bill problems said they could not afford these costs. Americans are being squeezed by out-of-pocket medical expenses with more now underinsured.

There are various consequences that result from unaffordable healthcare costs. Some are medical. Two out of five people reporting medical bill problems said that they or a family member did not get recommended medical treatment due to cost – and this was true for both insured and uninsured patients.

But there are also financial consequences. A majority (58%) of Americans reporting medical bill problems were contacted by a collection agency for unpaid medical bills. (You can see if a collection account is affecting your credit by getting your free annual credit reports at AnnualCreditReport.com or by checking your credit scores for free each month on Credit.com.) And this was also true for insured and uninsured patients.

Of even greater concern are the strategies used by people to address their medical bills. Six in ten (59%) of those with medical bill problems used all or most of their savings trying to pay these bills, one-third (34%) took on credit card debt to do so, and a quarter (26%) withdrew funds from a retirement or college account in order to pay.

Despite nation health reform, healthcare costs continue to threaten financial stability for millions of American families. The report’s conclusion sums it up well: “While insurance provides some protection against incurring medical bill problems in the first place, once these problems occur, the effects on individuals and families are often as serious for the insured as they are for the uninsured.”

Have healthcare costs threatened your family’s financial security? Share your story in the comments below.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.