Insured, But Not Protected

What Americans with health coverage can do to avoid medical debt

FRIDAY, Jan. 6, 2006 (HealthDay News) -- Millions of American families are struggling to pay their medical bills, while others are swimming in debt accrued through doctor and hospital visits, studies reveal.

What's troubling is that a significant percentage of these people have health insurance.

As the cost of medical care continues to rise, consumers are bearing a greater share of their medical expenses. The additional cost-sharing comes in many forms, including higher deductibles and co-payments, separate deductibles for hospital admissions and the move from fixed-fee co-payments to percentage-based "coinsurance." In some cases, health plans are widening limits on coverage of certain treatments.

"We're looking really at the tip of what's happened with the erosion of benefits as employers and plans start to share the costs with employees," said Michelle M. Doty, a senior analyst at The Commonwealth Fund and author of a recent study examining the insurance trend. "We're going to see more of this," she predicted.

The resulting cost-shift can be a real strain on family budgets, particularly for low-income Americans who are pinching pennies to begin with and people suffering from chronic or multiple health conditions.

In 2003, one in five working-age Americans with chronic health problems -- some 12.3 million people -- lived in families that had problems paying medical bills, according to an analysis published last year by the Washington, D.C.-based Center for Studying Health System Change (HSC).

More recently, Doty and her colleagues reported that almost two out of five U.S. adults -- an estimated 77 million people -- have difficulty paying medical bills or are struggling with medical debt. Seventy percent of the people overwhelmed by medical debt and 57 percent of those with current bill-paying problems said they were insured at the time their difficulties began, the study found.

For some families, filing for personal bankruptcy may be the only way to escape the debt they've piled up. According to a Harvard study released last year, illness and medical bills contributed to roughly half of personal bankruptcy filings in 2001. More than 75 percent of the filers were insured when they incurred the debt that set them back, yet many lost coverage during their illness.

But an overhaul of federal bankruptcy laws that took effect in October makes it tougher to extinguish those debts. Based on income, some Americans will have to repay some of what they owe.

If you have health insurance, there are a few things you can do to help avoid financial trouble.

"Here's the best advice I can give every American who has health insurance: Understand how your policy works. Understand the limits and understand where the 'carrots' are," said Alwyn Cassil, a spokeswoman for HSC.

For example, if you are enrolled in a preferred provider organization, try to use doctors and hospitals that participate in the provider network. You'll get a substantial discount on "in-network" services and your out-of-pocket costs will be lower than if you were to see out-of-network providers, she said.

If you're having an elective procedure, try not to get stuck with bills from hospital-based physicians who don't contract with your health plan. Find out ahead of time whether the anesthesiologist, radiologist or pathologist who will participate in your care is a member of the provider network. These specialists may not have agreements with your insurer, Cassil warned, even if your hospital and surgeon do.

To save money on drugs, investigate alternatives. "Oftentimes you can save significant money by going mail order or generic or switching from a non-preferred brand to a preferred brand," she noted.

If your health plan imposes an annual limit on, say, physical therapy or mental health visits, try to time your care so you won't have to pay for extra visits out of pocket.

As for patients who are already in debt, "Don't stick your head in the sand," Cassil urged. "Talk to the people you owe money to and see what you can negotiate. See what you can work out."

More information

The U.S. Agency for Healthcare Research and Quality has information on controlling health costs.

Read this Next
About UsOur ProductsCustom SolutionsHow it’s SoldOur ResultsDeliveryContact UsBlogPrivacy PolicyFAQ