Many Adults struggle to pay Medical Bills, report finds

By Aimee Miles

March 19, 2011--A recession-driven spike in unemployment levels, rising treatment costs and unaffordable insurance coverage caused four in 10 Americans to struggle to pay their medical bills last year, according to a report by the Commonwealth Fund.

The Commonwealth survey also found that more than 40 percent of the respondents said that high costs had compelled them to forgo the care they needed—up from 29 percent in 2001. 

Karen Davis, president of Commonwealth, a N.Y.-based foundation that advocates for health care access, said the trends will ease with the implementation of the new health law, which is set to mark its first anniversary next week amid Republican efforts to choke off federal funding.

The Commonwealth report, she says, "tells the story of a continuing deterioration of health care accessibility, efficiency, security and affordability over the past decade."

The fund conducts the national survey on health insurance every two years, and this poll of more than 3,000 working age adults reflects the recent recession that threw millions of Americans out of work. For many of them, unemployment also meant the end of employer-provided health insurance.

Nearly a quarter of respondents said they or their spouses had experienced a job loss in the past two years. Among those who lost their health benefits along with their jobs, 57 percent reported they could not get new insurance.

A quarter of those losing jobs and health benefits said they were able to get coverage through their spouse or some other method and about 14 percent turned to COBRA, which allows workers to continue their insurance for 18 months after losing their job. Usually the worker has to pay the entire cost of the program, but as part of the federal stimulus package, the government subsidized part of that cost for most workers. But enrollment in that program ended last May.

The Commonwealth Fund survey comes on the heels of two Gallup polls released earlier this month. One reported an overall decline in employer-based health care, the other noted a rise in uninsured levels in almost every state.

The analysis with the state poll suggested that the new health law could "fill the voids in care" created by state budget problems and rising unemployment rates.

But such relief wouldn't come until after 2014, when the law will extend Medicaid coverage to anyone whose income falls within 133 percent of the federal poverty level, and the federal government will subsidize part of the cost of private coverage for families earning up to 399 percent of the poverty level.

The health law will also standardize the benefits that health insurers offer in plans they sell on the individual and small group markets, bringing them in line with the benefits available to those offered by large employers; and prohibit insurers from denying coverage because of an individual's medical history.

"It eliminates some of the unpleasant surprises in the fine print in insurance policies," Davis said.

But conservative groups like the Heritage Foundation, a D.C.-based think tank, have criticized the health law. The foundation has called for changes in the health care system to make it less reliant on government and to have individuals "own and control their own health care policies." They also say the health law will increase government spending.

"Of course there's some people who will benefit from the law, but just focusing on individuals with benefits is misleading," said Brian Blase, a policy analyst in health studies at Heritage. "You have to look at the law in its totality."