COST: The Growing Ranks of the Underinsured

As if we didn't have enough to worry about. Not only are we worried about the care and cost of the uninsured, now we have to worry about people who have health insurance too. According to a new study released today by the Commonwealth Fund, a whopping 25 million Americans with health insurance are "underinsured" or financially vulnerable due to the high costs of medical care. That's nearly a 60 percent increase from Commonwealth's last study on the underinsured five years ago.

How underinsured are these 25 million Americans? The study, published in Health Affairs, defined the underinsured as individuals with either out-of-pocket medical expenses equal to 10 percent of their income, (5 percent if they were low-income) or with deductibles that exceeded 5 percent of their incomes. The authors attributed much of the rise to the growing prevalence of insurance plans with limited benefits and or high deductibles. They also found that the underinsured behaved similarly to the uninsured, avoiding care when they were sick, forgoing checkups and not taking their prescriptions because of high medical costs.

The study is attracting attention because it so clearly illustrates the impact of rising health care costs on the middle class. Case in point: three times as many people making $40,000 a year in a family of four are underinsured now compared with 2003. The New York Times' Reed Abelson has a nice summary of the findings, and quotes New America's Len Nichols on the significance of the study:

The Commonwealth study also underscores the need to address the rising cost of health care, which is starting to leave even those in the middle class vulnerable to financial stress, said Len Nichols, a health economist who directs the health policy program for the New America Foundation ... "Cost is central," he said. He noted that a national debate is already under way about how best to control medical expenses, through changes in the payment process and better information technology.

NPR's Julie Rovner helped put a human face on the story, interviewing a woman from Cleveland, Ohio, whose family struggled to keep up with co-pays and deductibles after her husband injured his neck—even though they were paying $550 a month in premiums. On a hopeful note, one of the study's authors, Cathy Schoen, suggests that a silver lining of the study's sobering numbers may be that, in Rovner's words, "as the problem reaches increasingly into the middle class there may be more of an imperative for policy makers to finally address it." We hope she's right.