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Problems Paying Medical Bills Increase for U.S. Families Between 2003 and 2007

1 in 5 Americans Faced Medical Bill Problems in 2007, up from 1 in 7 in 2003

News Release
Sept. 24, 2008

Alwyn Cassil (202) 264-3484 or

WASHINGTON, DC—The proportion of Americans in families with problems paying medical bills increased to 19.4 percent in 2007, up from 15.1 percent in 2003, according to a national study released today by the Center for Studying Health System Change (HSC) and funded by The Commonwealth Fund.

The growth translates to more than 57 million Americans in families with medical bill problems in 2007—an increase of 14 million people since 2003, according to findings from HSC’s 2007 Health Tracking Household Survey, a nationally representative survey with information on 18,000 people; the survey had a 43 percent response rate.

While rates of medical bill problems remained stable for elderly Americans, more nonelderly insured and uninsured people, alike, faced medical bill problems in 2007, the study found. And, although the rate of medical bill problems is much higher for uninsured people, most people with medical bill problems—42.5 million—hyad insurance coverage,

"Increases in problems paying medical bills are affecting not only those who have always struggled with medical costs—low-income and uninsured people—but also an increasing number of insured middle-income families," said study author Peter J. Cunningham, Ph.D., an HSC senior fellow.

About 2.2 million people with medical bill problems were in families that filed for bankruptcy as a result of their medical bills, and a much larger number reported other financial consequences, such as problems paying for food and housing. Likewise, people with medical bill problems—both insured and uninsured— reported much higher levels of unmet medical needs in the previous year because of costs compared with people without medical bill problems.

"The increase in medical bill problems—especially among insured people—is the main reason why more people reported unmet medical needs because of cost in 2007 than in 2003," Cunningham said.

The study’s findings are detailed in a new HSC Tracking Report—Trade-Offs Getting Tougher: Problems Paying Medical Bills Increase for U.S. Families, 2003-2007available here.

Other key findings include:

  • About 60 percent of people reported that medical bill problems resulted from family members’ illnesses, while 28.6 percent of bill problems were related to an accident or injury. About 8 percent of people reported that their medical bill problems were caused by the birth of a child.
  • The uninsured nonelderly were more likely to be in families with medical bill problems (34.4%) compared with insured nonelderly people (18.3%). Among enrollees in Medicaid or other state coverage programs, 28.4 percent reported medical bill problems.
  • The proportion of Americans with medical bill problems increased across all income levels between 2003 and 2007, including those with moderate and higher family incomes. Overall, the percentage of people with medical bill problems was higher among low-income people-31.8 percent in 2007 for those with incomes less than 200 percent of poverty, or $41,300 for a family of four in 2007, compared to 12.4 percent for people in families with incomes of 400 percent of poverty or higher.
  • The higher rate of low-income people with medical bill problems reflects both a higher proportion of low-income people who are uninsured and the fact that insurance coverage appears to make less of a difference in the rate of medical bill problems for low-income people. Among low-income people, 36.1 percent of the uninsured reported medical bill problems compared with 30 percent of the insured. For higher-income people, the uninsured were three times as likely to report medical bill problems (32.3%) compared with the insured (10.7%).
  • The amount of medical debt varied considerably, ranging from about one-fourth with debt of less than $800 to one-fourth with debt of about $5,000 or more. About 10 percent had debt of $12,000 or more.
  • In both 2003 and 2007, the majority of people in families with problems paying medical bills were compelled to make difficult sacrifices as a result, including two-thirds with problems paying for other necessities, such as food, clothing, mortgage or rent, and more than half putting off major purchases. Other financial consequences included 62 percent being contacted by a collection agency, and more than half borrowing money to pay medical bills.
  • Among people who reported problems paying medical bills, more than half reported that their health care providers suggested a payment plan to pay off the bills. Much less frequently reported actions included providers offering a discount (16.2%), informing patients about sources of free care (6.8%) and public assistance (14.6%), suggesting that patients take out a loan (11.5%), and referring patients to another provider (7.1%).
  • When the association of these provider assistance measures with unmet medical needs was examined, only one of these actions—being informed about sources of free care—was associated with a lower level of unmet medical needs because of cost. Among those who were informed by their provider about sources of free medical care, 9.2 percent reported unmet medical needs because of cost compared with 14.7 percent of all people with medical bill problems.
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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by the Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.


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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.