Out-of-pocket health care costs soar

NEW YORK — Privately insured, low-income workers with chronic medical conditions such as diabetes and asthma are being financially squeezed as employers shift the burden of higher health care costs to employees, a new study found.

The number of such individuals spending more than 5 percent of their income on out-of-pocket medical costs soared 48 percent to 2.2 million people from 2001 to 2003, according to a study released Thursday by the Center for Health System Change.

The average individual probably spends about 2 percent of income on out-of-pocket health care costs, said Ken Sperling, a consultant at Hewitt Associates, a benefit consultancy based in Lincolnshire, Ill.

“That means the low-income worker is making some serious trade-off between medical care and food,” Sperling said. “These people are strapped as it is.”

The study also found that one in three privately insured, chronically ill, low-income individuals are from families that struggle to pay medical bills. In such families, 10 percent of patients opted not to receive care, 30 percent delayed care and 43 percent didn’t fill a prescription because of the expense.

Low-income was defined as a family income below 200 percent of the federal poverty level, or $36,800 for a family of four in 2003.

The study illustrates that it isn’t just the uninsured who are struggling with medical expenses, said Paul Ginsburg, president of the Center, a nonpartisan policy research organization. Ginsburg said it is “penny wise and pound foolish” to continue cost shifting to people with serious medical problems because if they forego preventive care they wind up requiring costlier treatments later on.

But as double-digit growth in health care premiums has become routine in the last several years, employers have increasingly required employees to pony up more for their premiums, doctor visits, hospital stays and prescription drugs.

Family premiums in employer-sponsored plans jumped 11.2 percent to $9,950 annually, according to a survey by the Kaiser Family Foundation and the Health Research and Educational Trust. That study found the trend in cost-shifting had moderated but experts said it probably won’t help low-income families since premiums are rising at five times the growth rate of wages and inflation.

High health care costs are limiting wage increases, which in turn squeezes people who have high medical expenses, said Ron Pollack, executive director of FamiliesUSA, a consumer group.

“Health care costs will continue to exert downward pressures on wages,” said Pollack. “So whether it’s overt or covert, people wind up spending more of their own money on health care costs.”

Ginsburg said he doesn’t see any near-term solution to the problem but hopes more companies will alter benefits so individuals with chronic conditions pay lower or no copayments than those with less serious ailments. Most plans don’t make such distinctions now — although some are experimenting with programs to get people with serious medical problems to seek preventive care and avoid costly flare-ups in their conditions.

The study was based on a survey of 312,935 working-age adults between 18 and 64. It found there are about 57.3 million working-age Americans – 33 percent of the working population – with at least one chronic condition.

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