Jennifer N. Edwards, Michelle M. Doty, Sara R. Collins, and Alyssa L. Holmgren

1. How Medical Debt Threatens Economic Security and Access to Care: Findings from The Commonwealth Fund’s Biennial Health Insurance Survey Jennifer N. Edwards, Michelle M. Doty, Sara R. Collins, and Alyssa L. Holmgren The Commonwealth Fund Presentation to AcademyHealth, June 7, 2004

2. Research Questions • How many people in the United States have medical debt? • What are the characteristics of those in debt? • What impact does it have on people’s lives and health care to be in medical debt? • What policies could address the causes or the impact of incurring debt?

3. Commonwealth Fund Biennial Health Insurance Survey • Random nationally representative sample of adults 19 and older living in continental U.S. and over-sample of low income, African American, and Hispanic households • 25-minute telephone interview conducted by PSRA International, 9/3/03 -- 1/4/04 • Results weighted to correct for oversampling and to make sample representative of adults living in the U.S. • N = 4,052; response rate = 50%

4. Survey Questions Pertaining to Medical Bills and Accrued Debt • During the last 12 months, were there times when you had problems paying or were unable to pay for medical bills? • In the last 12 months, were you ever contacted by a collection agency about owing money for medical bills? • Over the last 12 months, have you had to change your way of life significantly in order to pay medical bills? • Asked of those saying no to prior three questions: More generally, do you currently or have you in the past three years had any medical bills or medical debt that you couldn’t pay right away and are paying off over time?

5. Who has medical bill problems and debt?

6. 77 Million Adults Experienced Medical Bill Problems and Debt* Bill problem, 19-64 27% No bill problem, 19+ 63% Accrued debt w/o other bill problem, 19-64, 7% Bill problem 65+, 2% Accrued debt w/o other bill problem 65+, <1% 207 million adults Source: The Commonwealth Fund Biennial Health Insurance Survey,2003. *Medical bill problems occurred in the last year; debt was accrued in the last 3 years. Note: 1% did not report age.

7. Seniors are More Protected From Medical Bill Problems and Accrued Debt than Non-Elderly Adults, Regardless of Income Levels Percent of adults who had medical bill problems and accrued debt Source: The Commonwealth Fund Biennial Health Insurance Survey (2003).

8. Pervasive Medical Bill and Debt Problems: Lower Income Adults Most at Risk, but Higher-Income Adults Also Incur Problems Percent of adults ages 19–64 who had the following problems Source: The Commonwealth Fund Biennial Health Insurance Survey,2003.

9. Low-Income and Sicker Adults Have a High Rate of Medical Bill Problems and Debt Percent of adults ages 19–64 with any medical bill problems or accrued debt Source: The Commonwealth Fund Biennial Health Insurance Survey (2003). Note: Income groups based on 2002 household income. *Sicker = Fair or poor health status or any chronic condition

10. How well does insurance protect people from medical debt?

11. Adults with Any Time UninsuredHave High Rates of Medical Bill Problems Percent of adults ages 19–64 who had the following problems in past year: Source: The Commonwealth Fund Biennial Health Insurance Survey (2003).

12. Fewer Insured Patients Have Medical Bill Problems or Accrued Debt Probability of having medical bill problems or accrued debt among adults 19-64 57 39 38 Source: The Commonwealth Fund Biennial Health Insurance Survey (2003). *Controlling for income and health status

13. All Insurance is not created equal….. • 62% of people with accrued debt were insured at the time they incurred the debt • 32% were uninsured

14. Adults Who Lack Drug Coverage and Report Insurance Problems Have High Rates of Medical Bill Problems or Accrued Debt Percent of adults ages 19–64 insured all year with bill problem or accrued debt Source: The Commonwealth Fund Biennial Health Insurance Survey (2003).

15. What impact does medical debt have on people’s lives?

16. Sicker People in Debt Forgo Needed Care More than Others Percent of sicker* adults ages 19–64 reporting the following problems because of cost: Source: The Commonwealth Fund Biennial Health Insurance Survey (2003). *Sicker = Fair or poor health status or any chronic condition

17. Medical Bill Problems or Accrued Debt Threaten Families’ Financial Security Percent of adults ages 19–64 who had bill problem or accrued debt Source: The Commonwealth Fund Biennial Health Insurance Survey (2003).

18. What can be done to reduce medical debt?

19. Policy Solutions for the Uninsured • Provide health insurance. • Implement standardized hospital procedures that assess eligibility for free or reduced price care. • Implement state programs that use uncompensated care dollars to support patients. • Expand availability of free clinics. • Add linkages for specialists and tests.

20. Policy Solutions for the Insured • Set a ceiling on out of pocket expenses at 10% of income. • Implement hospital procedures to discount care or forgive bad debt, with eligibility criteria that take into account the size of the debt relative to income. • Create a state charity care pool for underinsured people.

21. For additional information • The Affordability Crisis in U.S. Health Care: Findings from The Commonwealth Fund Biennial Health Insurance Survey by Sara R. Collins, et al, March 2004. • Additional reports from this survey are forthcoming • Go to www.cmwf.org to view our current reports or sign up for email alerts • Contact the authors: je@cmwf.org