79 million US adults have medical bill problems or are paying off medical debt

High cost of care and inadequate insurance leading more adults to delay or avoid getting treatment; working-age Americans spending more of income on out-of-pocket costs

New York, NY, August 20, 2008—The proportion of working-age Americans who have medical bill problems or who are paying off medical debt climbed from 34 percent to 41 percent between 2005 and 2007, bringing the total to 72 million, according to recent survey findings from The Commonwealth Fund. In addition, 7 million adults age 65 and over also had problems paying medical bills, for a total of 79 million adults with medical bill problems or medical debt.

In a new Commonwealth Fund report about the survey findings, Losing Ground: How the Loss of Adequate Health Insurance is Burdening Working Families, the authors describe how working-age adults are becoming more exposed to the rising costs of health care, either because they have lost insurance through their jobs or because they are paying more out of pocket for their health care. This combination of factors, along with sluggish growth in average family incomes, is contributing to problems with medical bills and cost-related delays in getting needed health care.

The report finds that in 2007, nearly two-thirds of U.S. adults under age 65, or 116 million people, had medical bill problems or debt, went without needed care because of cost, were uninsured for a time, or were underinsured—insured but had high out-of-pocket medical expenses or deductibles relative to income.

"We are seeing a perfect storm of negative economic trends threatening working families in the United States," said Sara Collins, Commonwealth Fund Assistant Vice President, and the study's lead author. "While gas and food prices are increasing and home values are declining, the rise in health care costs is surpassing income growth and fewer people have adequate insurance. As a result, working people are struggling to pay their bills and accruing medical debt."

While the increase in problems paying medical bills or carrying unpaid medical bills cuts across income brackets, low and moderate income families are burdened the most. The report finds that more than half of working-age adults earning less than $40,000 a year reported problems paying medical bills or being in debt due to medical expenses. Medical bill problems included not being able to pay bills, being contacted by a collection agency about an unpaid bill, and changing one's way of life in order to pay medical bills.

Those with medical bills and medical debt are increasingly facing serious financial problems and sometimes facing trade-offs among immediate life necessities. Thirty-nine percent of those with bill problems or debt say they have used up all of their savings to pay their health care bills; 29 percent are unable to pay for basic necessities like food, heat, or rent; and 30 percent took on credit card debt. Twenty-four percent of adults under age 65 with medical debt owe $4,000 or more and 12 percent owe $8,000 or more in unpaid medical expenses.