By Margot Sanger-Katz
The New York Times, October 17, 2018
The whole point of health insurance is protection from financial ruin in case of catastrophic, costly health problems. But a recent survey of people facing such problems shows that it often fails in that basic function.
The survey, of some of the country’s most seriously ill people, found that even with health insurance, more than a third of the respondents had spent all or most of their savings while sick. They are often faced with deductibles and co-payments; treatments their insurance won’t cover; and financial challenges — like lost work — that health insurance alone can’t address.
The New York Times, the Commonwealth Fund and the Harvard T.H. Chan School of Public Health used the survey to examine the sliver of the American population who use the health care system the most. To be included in the results, a respondent had to have been hospitalized twice in the last two years, and to have seen at least three doctors.
Their experiences may serve as an early warning system for problems that all of us may face: Because the estimated 40 million people in this population visit doctors, hospitals, nursing homes and pharmacies the most, they are the likeliest to see the weak points in the health care system.
One of these is financial insecurity. Among people with health insurance, more than 20 percent had trouble paying for basic necessities. More than a quarter had bills in collection, and 13 percent had borrowed money as a result of their illness.
Being Seriously Ill in America Today
The Commonwealth Fund, The New York Times, Harvard T.H. Chan School of Public Health, October 2018
From the Conclusions
These poll results present a unique look at the experiences of the most seriously ill patients in America today. They point to significant conclusions.
First, although about nine in ten seriously ill patients (91%) have health insurance coverage, the survey shows that while most people are financially protected, a substantial minority are not. About one-third (34%) report serious problems paying their hospital bills, and about three in ten (29%) report serious problems paying for their prescription drugs.
Among seriously ill patients who have health insurance coverage, these numbers about financial problems are still high. Thirty-one percent report serious problems paying their hospital bills, and 27% say they have problems paying for their prescription drugs.
These unpaid bills have a significant impact. Thirty-seven percent report that they used up all or most of their savings as a result of the cost of their medical condition, and 23% report being unable to pay for basic necessities like food, heat, or housing. For many of these individuals the problem is not that they have no health insurance coverage, but that their coverage is inadequate to deal with a serious illness.
This has implications for the national debate about whether or not governments should require higher levels of basic health insurance coverage for individuals. It also has implications when looking at the scope of public programs, such as Medicare. It is very unlikely that these seriously ill people imagined this high amount of health care expenditures in the years ahead at the time they bought their health insurance coverage or were aware of the level of coverage that Medicare would or would not give them if they were seriously ill.
Other resources on this topic, “Health Care in America: The Experience of People with Serious Illness,” are available at the following link:
By Don McCanne, M.D.
Some say that we need health insurance only for major illnesses and injuries, that we can take care of routine care out of our savings whether or not the funds are transmitted through a health savings account. We know that isn’t true since routine costs have been shown repeatedly to impair access to essential health care services and frequently result in financial hardship for individuals and families. But what about the larger expenses? Does insurance provide adequate protection against catastrophic expenses?
“Among seriously ill patients who have health insurance coverage… Thirty-one percent report serious problems paying their hospital bills, and 27% say they have problems paying for their prescription drugs.” Further, “These unpaid bills have a significant impact. Thirty-seven percent report that they used up all or most of their savings as a result of the cost of their medical condition, and 23% report being unable to pay for basic necessities like food, heat, or housing.”
Obviously insurance is not providing adequate protection for all too many Americans. Even for those over 65 with Medicare, though protection is better it is still not adequate – thirty percent still used up most or all of their savings. That is one of the main reasons why we insist that we need an improved version of Medicare to serve as a financing infrastructure for a single payer national health program.
We can’t say too often that when people use the label, “Medicare for All,” to advocate for a public option or Medicare buy-in, we must challenge them on the inadequacy of such a proposal. Not only is more of the same kind of Medicare inadequate, most of the rest of the financing system that is resulting in the financial hardship reported in this study would remain in place.
The health care financing system needs to be changed. Let’s fix Medicare and then expand it to include absolutely everyone. We’ll still need other changes, but removing the financial barriers to care is a great start.
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