Washington, D.C. – While much national attention has focused on the uninsured, there is an almost invisible but growing crisis among insured families, as rising health care costs devour an ever-growing portion of their pre-tax income. In the United States, 61.6 million people under the age of 65, 82.4 percent of whom are insured, are in families that will spend more than 10 percent of their pre-tax family income on health care costs in 2008, according to a report issued today by the consumer health organization Families USA. This number is nearly the population of 28 states plus the District of Columbia.
In addition, there are 17.8 million people in families that will spend more than 25 percent of their pre-tax income on health care costs in 2008.
Health care is the top domestic concern among voters in the upcoming elections. This new report is designed to project how significant health care costs will be for family budgets when voters go to the polls in 2008.
The Families USA report is the first of its kind to document these costs on a state-specific basis. The key findings in the report show that high health care costs are not just a problem of the uninsured. More and more families with insurance are affected by rising health care costs, and, for many, the burden of these costs has become too great to bear.
The key findings in the report look at the number of people in families that spend more than 10 percent of their pre-tax income on health care costs:
- In 2000, 41.7 non-elderly Americans were in families that spent more than 10 percent of their pre-tax income on health care costs.
- Between 2000 and 2008, the number of people in families spending more than 10 percent of their pre-tax income on health care costs will have increased by nearly 19.9 million. This increase is nearly the population of 16 states plus the District of Columbia.
- More than four out of five people (82.4 percent) in families spending more than 10 percent of their pre-tax income on health care costs are insured.
- 50.7 million non-elderly Americans with insurance are in families that will spend more than 10 percent of their pre-tax income on health care costs in 2008.
The report also looks at the number of people in families that spend more that 25 percent of their pre-tax income on health care costs:
- In 2000, 11.6 million Americans were in families that spent more than 25 percent of their pre-tax income on health care costs.
- Between 2000 and 2008, the number of people in families spending more than 25 percent of their pre-tax income on health care costs will have increased by 6.2 million.
- More than three out of four people (75.8 percent) in families spending more than 25 percent of their pre-tax income on health care costs are insured.
- 13.5 million Americans with insurance are in families that will spend more than 25 percent of their pre-tax income on health care costs in 2008.
As the Families USA report demonstrates, thousands of Americans are in families that face high health care costs. A number of factors have driven this phenomenon. First and foremost, health insurance premiums are increasing. As premiums rise, employers are forced to make tough decisions about the coverage they offer to their employees: some drop coverage, others increase the share of the premium that employees must pay, and more offer insurance that covers fewer services and/or requires high out-of-pockets costs. As a result, families must shoulder a greater portion of health care costs.
“Families are hit hard in the pocketbooks due to skyrocketing health costs,” said Ron Pollack, Executive Director of Families USA. “As a result, Americans are spending much larger portions of their family incomes on health care costs—and health care is becoming less and less affordable.”
According to the report, these fast-rising health care costs are forcing increasing numbers of people to look for new ways to pay for care. With the majority of doctor’s offices and hospitals now accepting payment by credit card, paying for health services via credit card is becoming increasingly common. Recent data show that more than one in four people with insurance report having trouble paying their medical bills or say that they are in the process of paying off medical debt.
“If this troubling trend continues, the health care affordability crisis will get much worse, and many more people will become uninsured and underinsured,” said Pollack. “The high health care costs faced by families are a clear indication that insurance simply no longer offers the protection that America’s families need.”
To determine how many people are in families that face health care costs in excess of 10 and 25 percent of pre-tax family income in 2000 and 2008, Families USA asked The Lewin Group to analyze data from the U.S. Department of Health and Human Services and the U.S. Census Bureau.
