Center for Studying Health System Change

Private Insurance Offering Less Protection Against Rising Health Costs For Low-Income, Chronically Ill, Working-Age People

Proportion Spending More Than 5% of Income Out of Pocket on Medical Care Jumps

News Release
Sept. 23, 2004

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ASHINGTON, D.C.—The proportion of low-income, privately insured, working-age Americans with chronic conditions, such as diabetes, asthma or depression, spending more than 5 percent of their incomes on out-of-pocket medical costs jumped from 28 percent to 42 percent between 2001 and 2003, according to a national study released today by the Center for Studying Health System Change (HSC).

"The study provides strong evidence that rising health costs and increased patient cost sharing are taking a heavy financial toll on low-income, chronically ill people-even if they have private health insurance," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

The study also found that more than one in three privately insured, chronically ill people with low incomes-defined as income below 200 percent of the federal poverty level, or $36,800 for a family of four in 2003-lived in families reporting problems paying medical bills. The study is based on HSC’s Community Tracking Study 2003 Household Survey, a nationally representative survey involving information on about 25,400 families and 46,600 people, including 31,935 working-age adults between 18 and 64 years old.

The 6.6 million uninsured, chronically ill Americans face especially grave financial consequences-nearly half (48%) reported medical bill problems in 2003, making them much more likely to forgo or delay needed medical care. Among the 3 million uninsured, chronically ill people with medical bill problems, four in 10 went without needed care, two in three put off care and seven in 10 did not fill a prescription in the past year because of cost concerns.

Rates of access problems for privately insured, chronically ill people with medical bill problems, while lower than for the uninsured, were still considerable in 2003: 10 percent went without care, 30 percent delayed care and 43 percent did not fill a prescription because of cost concerns.

Overall, about 57 million working-age Americans live with chronic conditions, such as diabetes, asthma or depression, and more than one in five, or 12.3 million people with chronic conditions, lived in families with problems paying medical bills in 2003, the study found.

"The findings that people with chronic conditions bear higher costs and have more problems paying medical bills aren’t surprising, but the extent of the cost burden and the degree to which it impedes timely access to medical care are surprising and cause for concern," said Ha T. Tu, M.P.A., an HSC health researcher and study author.

The study’s findings are detailed in a new HSC Issue Brief-Rising Health Costs, Medical Debt and Chronic Conditions-available online at www.hschange.org. Other key findings include:

• Across the entire working-age population in 2003, 12 percent reported family out-of-pocket health costs exceeding 5 percent of family income, while 19 percent of working-age adults with chronic conditions reported out-of-pocket costs greater than 5 percent of income.
• Almost 40 percent of low-income, chronically ill people had out-of-pocket health costs greater than 5 percent of family income in 2003, compared with 8 percent of chronically ill people with family incomes higher than 400 percent of poverty.
• Working-age adults with chronic conditions were more than twice as likely as healthy working-age adults to live in families reporting problems paying medical bills in the past year-21 percent vs. 10 percent in 2003.
• Among working-age adults with chronic conditions whose families had problems paying medical bills in the past year, negative effects on other aspects of family finances were common: 68 percent of the families had problems paying for other necessities, such as food and shelter; 64 percent were contacted by a collection agency; 55 percent put off major purchases; and 50 percent had to borrow money. More than nine in 10 families with medical bill problems faced at least one of these negative effects on family finances, and almost a quarter experienced all four.

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.