Study: Families Struggle with Medical Debt

Wed Jun 30
By Kim Dixon

CHICAGO (Reuters) - One in seven families in the United States -- most of which are already covered by health insurance -- are struggling with debt from medical expenses, a study found on Wednesday.

That amounts to 20 million families, many of which report difficulties paying for basic needs like food and shelter because of problems with debt from medical care, the nonprofit Center for Studying Health System Change found in its poll of 25,400 families.

"It was kind of a surprise that it was that high," said Peter Cunningham, a senior health researcher at the think tank and study author.

One striking finding in the study is that two-thirds of those facing medical bills they cannot pay already have health insurance. Unpaid medical bills comprise roughly half of all personal bankruptcies, according to studies.

Medical costs are soaring at twice the rate of general inflation and faster than incomes. The primary cost drivers for health care premiums -- prescription drugs, hospital care and doctors -- rose 7.4 percent in 2003.

As employers grapple with these costs, they are shifting more out-of-pocket costs onto consumers, studies say. Fees charged to patients for doctors' visits and prescription drugs, which are not fully paid for by insurance, have risen significantly for several years.

That is likely a factor driving the trend, and with health care costs rising so steeply, it is likely to burden more families in the future, Cunningham said.

Costs are clearly on the minds of consumers are they take on a greater burden for the cost of their health care.

Medical premium prices that employees paid for family coverage jumped 50 percent from 2000 to 2003, to $2,412 from $1,619, according to the Kaiser Family Foundation.

Corporate America is embracing these higher payments as a way to engage and educate consumers about soaring medical costs.

The notion is that if patients pay more, they will better appreciate the cost of care and be less likely to overuse medical care. For example, they will less likely run to a doctor for a minor ailment if their co-payment is $20, when before it was $5.

But the study suggests some of these tactics may backfire if they cause patients to forego care altogether. Skipping needed health care can lead to more expensive emergency treatment being required in the future.

Among those facing mounting medical debt, one in three put off getting a prescription drug, one in four delayed care and one in eight skipped getting medical care altogether, the debt study showed.


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