Bills and Empty Pockets

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Health insurance is, in principle, about much more than just being able to get the care you need. Like all types of insurance, health insurance is about financial protection: If you develop a condition that requires an expensive medical treatment, you’ll be protected from having to pay for that treatment out-of-pocket. Insurance makes sense because people want financial predictability, and unforeseen medical expenses can hit any of us at any time.

But very few insurance plans offer complete protection from unexpected costs. In addition to monthly premiums, nearly all insurance plans require deductibles, copayments, or cost-sharing when an actual medical expense — for an office visit, drug, or procedure — comes due. This system reflects, in part, the fact that most people are fine with some financial risk — they just want to be protected from unforeseen expenses above a certain level. It also reflects the idea that people might reconsider unnecessary visits, drugs, and procedures if they’re paying some portion of the associated expenses. But it also reflects the fact that many people simply can’t afford health insurance that doesn’t come with high out-of-pocket costs for health-care expenses, and these people must simply hope they won’t get sick or injured.

A new survey shows just how common large out-of-pocket medical costs are in the United States among people with private insurance. Released by the Commonwealth Fund, a nonpartisan group that promotes health-care access and quality, the survey found that 21% of adults with private health coverage spent 5% or more of their income on out-of-pocket costs, not including health insurance premiums. A smaller but still significant number, 13% of adults with private insurance, spent 10% or more of their income on out-of-pocket health-care expenses.

According to a HealthDay article on the survey, the problem of out-of-control expenses was most common among low-income adults, with 41% of those making less than $11,490 a year spending 5% or more of their income on out-of-pocket costs and 31% spending 10% or more of their income. And people with moderate or low incomes were also more likely to skip needed care because of its cost. Among adults earning less than $22,980, 46% said they skipped needed care at least once because of the cost involved, including 30% who said they didn’t see a doctor when they had a health problem and 28% who didn’t fill a prescription. Overall, 43% of adults surveyed said their health insurance deductibles were somewhat difficult, very difficult, or impossible to afford.

What has your experience with out-of-pocket medical expenses been like — if you have private insurance (either employer-provided or self-bought), does it cover enough medical costs to ensure that you get the care you need? Have you ever had to make painful choices between health care and another basic expense? If you have government-provided insurance (Medicare, Medicaid, or another program), does your plan cover enough costs to make your care affordable? Would you switch to a higher-premium plan that covered more costs if you could afford it, or do you prefer taking some financial risk and having more of an incentive not to get unnecessary care? Should the government require that out-of-pocket costs in private plans be kept below a certain percentage of income? Leave a comment below!

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