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Out-of-Pocket Health Care Costs Up

Dec. 12, 2006 -- Health care costs are digging deeper into Americans' wallets, with 17 million of those under age 65 "underinsured" in 2003, a new study reports.

The underinsured are those who have insurance but still do not have "adequate financial protection" from high out-of-pocket health care costs," according to the study.

In this case, that means the number of Americans under 65 who have insurance but still spend more than 10% of their family income on health care.

"We define the underinsured as persons who live in families that spend more than 10% of tax-adjusted family income on out-of-pocket health care costs (excluding premiums)," Jessica Banthin, PhD, tells WebMD in an email.

Banthin, along with Didem Bernard, PhD, were the researchers on the study. Both work at the Agency for Healthcare Research and Quality (AHRQ), a part of the Health and Human Services Department.

The study was published in The Journal of the American Medical Association.

The study reports that nearly 49 million Americans under 65 -- including those with no insurance -- lived in families that spent more than 10% of their tax-adjusted family income on health care when insurance premiums were included.

And about 19 million Americans under 65 lived in families that spent more than 20%.

Such costs drove some people to delay or skip medical care for financial reasons, the study shows.

Those tough budget choices can have "severe consequences for those in poor health," the researchers write.

Health Care Costs

Banthin and Bernard analyzed data from two large AHRQ studies on health care costs from 1996 and 2003. The 1996 study looked at about 20,000 people under 65; the 2003 study included almost 29,000.

Both studies provided information on family income and health care payments, including health insurance premiums and out-of-pocket expenses.

The researchers focused on the percentage who lived in families that spent more than 10% of their tax-adjusted family income on health care.

In 2003, nearly 49 million people were in the 10% group. That's almost 12 million more people than in 1996, the study shows.

Meanwhile, 18.5 million Americans spent more than 20% of their family income on health care in 2003, up from nearly 13 million in 1996, according to the study.

'Underinsured' Workers

Based on the data, and not including the cost of premiums, 17 million people in the U.S. younger than 65 were "underinsured" in 2003, the researchers estimate.

About 9 million of those underinsured people had private health insurance through employers.

The others had public health coverage or private health insurance not affiliated with an employer or group.

Underinsured people tended to have low incomes and were older, in fair or poor health, disabled or with chronic medical conditions, and without group health insurance.

The data only focused on family income. It doesn't include financial assets such as a home or investments, or financial burdens such as debts.