Report Exaggerates Number of Americans Who ‘Struggle’ to Pay Medical Bills

Health Care News (Heartland Institute), November 1, 2008

As many as 72 million working-age Americans either have “medical bill problems” or are paying off medical debt, according to a survey conducted by The Commonwealth Fund.

The report also found the portion of the population with medical bill problems increased from 34 percent in 2005 to 41 percent in 2007.

Seven million additional adults age 65 or over have medical bill problems, the report contends, bringing the total number of Americans with medical payment problems to a purported 79 million.

The study, “Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families,” was released in September and defines “medical bill problems” as being unable to pay bills, being contacted by a collection agency regarding an unpaid bill, or what the report called “changing one’s life” as a consequence of paying medical bills.

Overstating the Problem

Health policy analysts strongly disagreed with the Commonwealth Fund’s findings, deriding the study’s methods as arbitrary.

“I believe the Commonwealth Fund continues to overestimate the number of Americans struggling with medical debt,” said John R. Graham, director of health care studies at the Pacific Research Institute. “They include ‘changing one’s life in order to pay medical bills’ as a measure of ‘struggle,’ but even holding a job is a way of ‘changing one’s life’ to pay bills.”

The study relied on data gleaned from the past four years of the Commonwealth Fund’s Biennial Health Insurance Survey. It examined U.S. adults’ health insurance status and the implications of that status on family finances and access to health care.

“Insurance coverage deteriorated over the past six years, with declines in coverage most severe for moderate-income families,” according to the report. “As a result, more families are experiencing medical bill problems or cost-related delays in getting needed care.”

Puzzling Assumptions

According to the study, nearly two-thirds of all adult Americans—an estimated 116 million people—struggled to pay medical bills or went without health insurance in 2007. The study’s authors arrived at that number by adding the people who went without insurance at some point during 2007, regardless of the reason, to the 79 million figure.

More than 50 percent of working-age Americans who earn less than $40,000 a year are either underinsured, have trouble paying medical bills, or are in debt due to medical expenses, the report claimed.

“The Commonwealth Fund continues to define ‘underinsured’ as spending 10 percent or more of household income on health care, but this number is completely arbitrary,” said Graham. “Furthermore, the Commonwealth Fund emphasizes the need for Americans to have more complete insurance, but this will not reduce medical costs, which are rising dramatically. If a person who is ‘underinsured’ cannot afford his co-payments and deductible, then how can he afford the more expensive premiums for a policy with a lower deductible and co-payments?

“Despite the Commonwealth Fund’s over-dramatization of the situation, there is no doubt that millions of Americans do struggle with medical bills that threaten them with financial ruin,” Graham added. “The way to make health insurance more affordable is for state and federal governments to unleash competition among providers, which will increase quality and choice at lower prices. This, in turn, will reduce premiums for health insurance.”

Dr. Sanjit Bagchi ([email protected]) writes from India.

For more information …

Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families,” The Commonwealth Fund, September 2008:

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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