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Fewer Families Burdened by Medical BillsMarch 5, 2015:
A new report by the National Center for Health Statistics indicates that fewer people under the age of 65 are living in families reporting problems paying medical bills. In 2014, approximately 47.7 million people under 65 years of age live in families with problems paying medical bills—down from 56.5 million in 2011.
The report does not explore why the prevalence of problems paying medical bill is declining, but we offer three potential explanations.
- ACA Coverage and Access Provision. Millions of Americans have gained health insurance coverage through the Affordable Care Act (ACA). Under the ACA, health plans do more than just offer financial protection during medical emergencies. Specifically, health plans are no longer allowed to deny coverage or charge higher premiums for people living with pre-existing health conditions. Health plans are also required to cover free preventive services and offer a core set of essential benefits. Finally, the ACA prohibits health plan from putting annual of lifetime dollar limits on most benefits. All of these provisions work to provide affordable coverage options and reduce the burden of high out-of-pocket costs.
- High Deductible Health Plans. Over 17 million people were enrolled in high deductible health plans in 2014—up from 3 million in 2006, according to America’s Health Insurance Plans (AHIP) Center for Policy and Research. High deductible health plans require enrollees to pay a specific amount prior to the gaining financial protections from an insurer. There is ample evidence that individuals use fewer services when enrolled in a high deductible plans, which therefore reduces their health care spending.
- The Economy. Not only does an improved economy place more cash into the pockets of Americans, but a growing economy should improve access to employer-sponsored health insurance. Yet, as our recent report on employer-sponsored health insurance shows, employer offer rates have not returned to pre-recession levels.
While fewer people are reporting problems paying medical bills, there are still stark differences across subpopulations. Low-income and uninsured populations are more than twice as likely to report problems paying medical bills. Additionally, one in four African Americans and one in five Hispanics are living in families reporting problems paying medical bills.