Number of Underinsured Growing

The number of uninsured is commonly stressed in discussions of health care reform but there is another growing problem. Many people have some type of health insurance, but their insurance does not provide sufficient coverage to allow them to receive needed health care. The Commmonwealth Fund has found that the number of underinsured has been growing:

The number of underinsured U.S. adults—that is, people who have health coverage that does not adequately protect them from high medical expenses—has risen dramatically, a Commonwealth Fund study finds. As of 2007, there were an estimated 25 million underinsured adults in the United States, up 60 percent from 2003.

Much of this growth comes from the ranks of the middle class. While low-income people remain vulnerable, middle-income families have been hit hardest. For adults with incomes above 200 percent of the federal poverty level (about $40,000 per year for a family), the underinsured rates nearly tripled since 2003.

These results and others are published in How Many Are Underinsured? Trends Among U.S. Adults, 2003 and 2007, (Health Affairs Web Exclusive, June 10, 2008), by The Commonwealth Fund’s Cathy Schoen, Sara R. Collins, Jennifer L. Kriss, and Michelle M. Doty.

They found a correlation between the number of underinsured adults and the way in which health care benefits are designed:

The sharp increase in the number of underinsured adults, say the authors, is partly due to design changes in insurance benefits that leave individuals financially vulnerable. Underinsured adults were more likely than those with adequate insurance to report benefit limits—for example, restrictions on the total amount a plan would pay for medical care or on the number of physicians’ visits allowed. They were also far more likely to report high deductibles: one-quarter had annual per-person deductibles of $1,000 or more. Despite benefit limits and higher deductibles, underinsured adults often reported high annual premium costs, in line with those reported by more adequately insured people.

“Benefit design matters,” the researchers conclude. Having a policy with substantial cost-sharing relative to income can undermine access to care and erode family finances. While improving insurance coverage is a worthy goal, it is important for policymakers to consider cost-sharing provisions, scope of benefits, and income when exploring coverage mandates, they say. Health care reform in Massachusetts, for example, includes graduated cost-sharing, as well as premium assistance for those with incomes up to 300 percent of the poverty level.

The goal is high-quality care and improved outcomes—not just coverage, write the authors. “[T]here is growing recognition of the need for coherent strategies that combine coverage with payment and other policies to change directions and move toward a more inclusive and higher-performing, high-value health system.”

The problem worsens as patients have to pay more of their health care expenses our of their own pocket–which happens to be just what John McCain and many Republicans are now advocating.