Health Care costs for a monthly premium and associated health care costs, such as, deductibles and monthly prescriptions have become a significant portion of the family income. In the screenshot below, for a family of four with a $100K income, 24% of their income is spent on health care associated costs for coverage.
Reference Kaiser Family Foundation, Health System Tracker
With a significant amount of dollars tied to a high percentage of the family income, one major health event can impact a family’s finances severely and potentially lead to bankruptcy. A recent survey by West Health and Gallup reveals that 50% of Americans have this concern.
Reference: Gallup: 50% in U.S. Fear Bankruptcy Due to Major Health Event
This fear has increased by 5% from the 2019 study. It also shows that non-white adults with health care related bankruptcy concerns have grown by 12%.
Additional factors could be because of COVID-19. The unemployment rate increased by more than 14 million, according to FactTank: Unemployment Rose Higher in 3 months of COVID-19 than it did in two years of the Great recession. Unemployment impacts employer coverage of health care benefits, leaving individuals having to self-pay or purchase a catastrophic temporary plan with a monthly premium and a high deductible.
For others who may have purchased a High Deductible Plans (HDP), medical debt and bankruptcy is also a concern. In 2018 this was 47 percent of commercially insured, according to HFMA: High-Deductible Plans Surge CDC. Typically, individuals choose HDP plans for affordability and with the promise of good health and minimum need to use the plan for the year. With COVID-19, many are concerned with the impacts to their family members and out-of-pocket costs should a family member test positive for COVID-19.
Long-Term Medical Debt
In addition to health related bankruptcy concerns, according to the West Health and Gallup poll, 15% of adults report at least one person in the family has medical debt. The concern is this debt will not be repaid within the next 12 months, 12% of white adults, 20% non-white adults.
From a political perspective, given this is an election year, the study notes the rate is 18% political independents, 18% Democrats, 16% and 8% Republicans.
This leaves individuals attempting to identify alternative ways to make payments. Non-payment resulting in an impact on credit scores, borrow money or put on a credit card incurring another monthly payment and additional charges due to interest.
While there have been several options with loans and stimulus checks during COVID-19, most of that money is used for rent and daily essentials with medical debt continuing to be a burden.
Drug Prices Contribution to Medical Debt
Approximately a quarter of Americans struggle in affording their prescriptions with 44% under 65 and on a High-Deductible-Plan (HDP) leaving their insurance plan covering only a small portion. KFF: Health Tracking Poll Due to cost, 29% report not taking prescription medicines because of cost or they skip a day to make the prescription last longer or take daily but cut pills in half.
To remedy this issue, some key options Americans are favoring include:
- Requiring drug companies to list prices.
- Provide better options for generic drugs to be available.
- Allowing the federal government to negotiate to get better rates for Medicare recipients.
- Allow Americans to buy drugs from Canada.
Reference: KFF: Bi-Partisan Majorities Support Range of Policy Changes Aimed at Lowering Drug Costs
Without options drug prices continue to soar, impacting access to care and medical debt often leading to bankruptcy and impacts to health because of individuals not being able to get access to the much-needed medication.
Reference: Financial Times: Why Prescription Drugs Cost so much more in America.
COVID-19 Impacts to Medical Debt and Bankruptcy
The COVID-19 pandemic has only increased the challenges. It has been reported that 14% of Americans with COVID-19 symptoms would not get care due to cost and associated drugs that may be needed for care.
Unemployment and loss of health insurance have elevated bankruptcy concerns with added medical debt from loans and the inability to pay. The rise in number of unemployed workers due to COVID-19 has increased significantly and surpassed the numbers from the Great Recession (December 2007-June 2009).
This all combined with an election year where The Affordable Care Act (ACA) could be up for significant revisions or being dismantled depending on which candidate is voted as President in November, leaving additional concerns related to cost of premiums, coverage for preexisting conditions, or coverage under a parents plan until 26 years of age, may no longer be an option, all of which could contribute negatively to a family’s monthly income.
What Happens to My family if the Affordable Care Act (ACA) is repealed
The Choice – No Health Care Insurance
The ACA attempted to address the gap of insured by requiring all to have insurance or be subject to a penalty. This caused a reduction in uninsured when the ACA was enacted in 2010, by 46.5 million, according to KFF: Key Facts about the Uninsured Population.
However, in 2017 and 2018 this number of uninsured has risen. In 2018, 27.9M, non-elderly individuals were uninsured. While an increase the uninsured is still lower than it was prior to the ACA.
The uninsured are typically low-income families who may have one working family member. The reasons for not having health insurance are because of the high cost of premiums, deductibles and co-insurance. Some will hope for good health and no emergent issues requiring the need for care. However, should something happen and a hospital stay or ER visit is needed, the bill can run $3K – $12K depending on care provided and easily become a debt that cannot be paid with the result potentially bankruptcy.
2020 is an important election year. Regardless of political affiliation, know the facts and the issues that need to be addressed. 2020 has proven to be a year to never forget in terms of a fragile health care system, racial injustice, fear and isolation. While it has brought us together, it has also created division. We are stronger when we are one, be wise, be kind and be a Savvy Voter in the 2020 election… AND Vote!