A new Health Affairs study reveals that healthcare affordability concerns affect 27% of non-senior US adults, impacting low- and middle-income families. While some face severe issues like high out-of-pocket costs and medical debt, a broader definition, including delayed care, raises the percentage to 46%. Income level significantly correlates with affordability issues. The study emphasizes the importance of addressing these multifaceted challenges comprehensively, highlighting policy implications such as the Inflation Reduction Act of 2022 and the need for Medicaid continuous enrollment for low-income populations.
Healthcare affordability issues have become a pressing concern for a significant portion of the US population. While some adults face severe challenges such as high out-of-pocket costs, medical debt, or postponed medical care, many more are burdened by healthcare financial strain. A recently published study in Health Affairs sheds light on the extent of this issue and its impact on low- and middle-income families in the United States.
According to the study conducted by researchers from the Agency for Healthcare Research and Quality (AHRQ), approximately 27 percent of non-senior adults live in families grappling with severe healthcare affordability issues. These issues include high out-of-pocket expenses, medical debt, or the postponement of necessary medical care. When a broader definition of healthcare financial strains, including delayed care, is considered, this percentage jumps to nearly 46 percent of US adults.
The research, which draws from data collected through the Medical Expenditure Panel Survey (MEPS), provides a comprehensive view of the financial pressures faced by individuals and families in the United States. The study’s dataset consists of information from 2018 and 2019, focusing on individuals aged 19 to 64 who do not have anyone aged 65 or older in their households. Seniors were excluded due to their unique healthcare needs, coverage options, and financial constraints.
This study is unique in its use of MEPS data to analyze various healthcare affordability issues and one of the few to leverage the survey’s medical debt data to understand how these issues affect American families.
Low-income families are disproportionately affected by healthcare affordability challenges. When examining a strict definition that includes out-of-pocket burden, medical debt, and care barriers, nearly 43 percent of adults living in poverty experience at least one financial problem. Expanding the criteria to account for only delayed (not forgone) care and loosening the requirements for problematic medical bills increases this percentage to approximately 53 percent. In contrast, families with incomes exceeding four times the federal poverty level face significantly fewer healthcare affordability challenges.
The study indicates a clear association between income level and healthcare affordability, with the burden declining as income levels increase. Medical debt is also more prevalent among poor (11 percent), low-income (11.5 percent), and middle-income (11.8 percent) families. Financial barriers to care are more common among these groups, affecting 28 percent, 28 percent, and 22 percent, respectively.
The type of insurance coverage also plays a significant role in healthcare affordability. Adults covered by employer-sponsored insurance encounter fewer financial problems compared to those with private non-group plans, Medicaid, or other public coverage, as well as those with no coverage.
Additionally, the study reveals that adults in families with diabetes or limitations in daily living activities experience higher frequencies of healthcare affordability issues. However, having a family member with cancer does not appear to be associated with an increased frequency of financial burdens.
Families with substantial medical care needs often find themselves in the difficult position of choosing between high out-of-pocket expenses, accumulating medical debt, or delaying necessary care due to cost constraints. These findings emphasize the urgency of addressing healthcare affordability issues comprehensively.
The study acknowledges certain limitations, such as different but overlapping study periods and the absence of data on employer premium contributions, which could contribute to the financial burden on families with employer-sponsored coverage. Nevertheless, the study’s findings have significant policy implications.
The Inflation Reduction Act of 2022, which extends pandemic-era Marketplace premium and cost-sharing reductions through 2025, gains importance in light of the high rates of financial strain among adults with private non-group coverage. The findings underscore the significance of Medicaid continuous enrollment for low-income populations who might otherwise have no coverage or costly private coverage.
Above all, this study contributes to a more holistic understanding of healthcare affordability and its implications, transcending individual policy measures aimed at addressing medical debt and other financial strains. It underscores the need for comprehensive solutions to alleviate the multifaceted challenges faced by individuals and families throughout the United States. The study’s conclusions emphasize the urgency of addressing all dimensions of healthcare financial strain across the nation.
