Financial Burden of Medical Care: A Family Perspective

By Robin A. Cohen, Ph.D., and Whitney K. Kirzinger, M.P.H.

Centers for Disease Control and Prevention, National Center for Health Statistics, January 2014

Recently published data from the National Health Interview Survey (NHIS) found that 1 in 5 persons was in a family having problems paying medical bills, and 1 in 10 persons was in a family with medical bills that they were unable to pay at all. NHIS defines “family” as an individual or a group of two or more related persons living together in the same housing unit. The family perspective is important to consider when examining financial risk because significant expenses for one family member may adversely affect the whole family. Health insurance coverage is one way for a family to mitigate financial risk associated with health care costs, although health insurance status may differ among family members. This report explores selected family demographic characteristics and their association with financial burdens of medical care (problems paying medical bills, paying medical bills over time, and having medical bills that cannot be paid) based on data from the 2012 NHIS.

Percentage of families that had any financial burden of medical care in the past 12 months, by family health care coverage status: United States, 2012

20.9% – All members have private insurance

21.1% – All members have public coverage

35.8% – Some members have private insurance, and some members have public coverage

39.7% – All members are uninsured

46.0% – Some members are insured and some members are uninsured

Summary

Previous reports based on data from NHIS examined financial burdens of medical care from a person-level perspective. One strength of NHIS is that information on insurance and financial burden is collected at the family level, giving analysts the ability to look at both family-level and person-level data. The family perspective is a useful expansion of previous research because having one family member who contributes to the bulk of the financial burden for medical care may place the entire family’s ability to pay medical bills and overall financial well-being at risk. From a family level, this report found that levels of financial burden of medical care were greatest for families with incomes at or below 250% of the FPL, those with children, those with mixtures of coverage types, and those in which at least one family member was uninsured. Often, persons in families with more than one member can financially benefit from shared income and household expenses. However, when one family member experiences a financial burden of medical care, the entire family may be at risk for financial burden.

http://www.cdc.gov/nchs/data/databriefs/db142.pdf

This report confirms that members of insured families who all have the same health care coverage still have a one in five chance of experiencing a financial burden from medical care. What is new in this particular report is they showed that fragmentation of coverage within families produces a greater risk of financial burden, with almost half of families adversely affected if some family members are uninsured. That refers to all family members, not just the uninsured.

Fragmentation of coverage within families is not only perpetuated under the Affordable Care Act (ACA), it may be even worse than before because of the new rigid, complex rules for eligibility for various forms of coverage.

We already know that about 31 million individuals will still not be insured when ACA is fully implemented. Again, this report shows that even if other family members are insured, it is not just the uninsured member who is financially vulnerable, the entire family is.

An employed individual may or may not be covered under an employer-sponsored plan, and coverage of other family members under the same plan is also unreliable because of either affordability or eligibility considerations. Individuals with very low incomes may be eligible for Medicaid in some states but not in others. Children in the family may be eligible for Medicaid or CHIP in some states but not in others. Even if the children are eligible, the adults may not be. Even a determination of whether or not individuals living together in a housing unit constitutes a family can influence eligibility determinations. Many individuals will find that their eligibility status for whatever program for which they may be considered may leave them with unaffordable requirements for premium contributions thereby qualifying them for hardship status which provides them with the privilege of remaining uninsured without having to pay a penalty under the ACA mandate. (The complexity of ACA leads to sentences like this.)

Factors influencing eligibility for various programs such as employment, income, residence, and modification of eligibility rules and income thresholds can vary considerably over time for any given family. The point is that far too many families have and will continue to have fragmentation of their health care coverage and one-third to one-half of them will experience financial burdens as a result.

This injustice would disappear under a single payer national health program – an Improved Medicare for All. What do you think the chances are that President Obama, during his State of the Union address this evening, will recommend health justice for all through the enactment of a single payer system? Even the oddsmakers won’t take that one since they don’t deal in zeros.