The Trouble with For-Profit Healthcare: Even the Insured Face Mountains of Debt

For one in five Americans, just having medical insurance isn't enough to forestall the damaging consequences of the nation's for-profit healthcare system.

A comprehensive new poll from the Kaiser Family Foundation and the New York Times finds that while an unsurprising 53 percent of people who are uninsured face problems with medical bills, a whopping 20 percent of working-age Americans who do have insurance also report having medical debt that causes serious financial challenges and changes in employment and lifestyle.

According to a Kaiser Foundation statement, people with insurance who faced the burden of medical debt reported "a wide range of consequences and sacrifices during the past year as a result," including:

• delaying vacations or major household purchases (77%),
• spending less on food, clothing and basic household items (75%),
• using up most or all their savings (63%),
• taking an extra job or working more hours (42%),
• increasing their credit card debt (38%),
• borrowing money from family or friends (37%),
• changing their living situation (14%), and
• seeking the aid of a charity (11%).

In addition, insured people with medical debt reported skipping or putting off other health care in the past year because of the cost, such as postponing dental care, skipping doctor-recommended tests or treatments, or not filling a prescription.

The report shows that for people with insurance, such consequences loom as large as--or in some case, larger than--they do for uninsured people with problem medical bills. Indeed, a full 62 percent of those who had medical debt say the bills--stemming from co-pays, deductibles, unexpected claim denials, and more--were incurred by someone who had health coverage at the time.

"These financial vulnerabilities reflect the high costs of health care in the United States, the most expensive place in the world to get sick," wrote Margot Sanger-Katz for the Times, where individuals shared how medical debt had affected them.

What's more, the data highlights the problems inherent to a for-profit healthcare model.

As Sanger-Katz explained: "Since the late 1990s, insurance plans have begun asking their customers to pay an increasingly greater share of their bills out of pocket though rising deductibles and co-payments. The Affordable Care Act, signed by President Obama in 2010, protected many Americans from very high health costs by requiring insurance plans to be more comprehensive, but at the same time it allowed or even encouraged increases in deductibles."

That's why we need a different system, such as a uniform, single-payer national health program based on a Medicare-for-All model, advocates say.

What the Kaiser/Times statistics show is that "anyone short of Bill Gates is in big trouble if they get sick, even if they have insurance," Dr. David Himmelstein, a co-founder of Physicians for a National Health Program (PNHP) and professor in the CUNY School of Public Health at Hunter College, told Common Dreams on Tuesday.

"A solution," he continued, "would be real health insurance like people in the rest of the developed world have."

Noting that residents of countries like Canada, France, and Germany don't face the same gaps in coverage, out-of-network costs, co-pays, and "all those other things that leave Americans in trouble," Himmelstein compared the average health insurance plan to a standard hospital gown--"it looks like you have coverage until you turn around and see what's up in the back."

National Nurses United policy director Michael Lighty echoed that call in an interview with Common Dreams. "Continued medical bankruptcy is inevitable because people simply can't afford the out-of-pocket expenses that are inherent in the Affordable Care Act," he said on Tuesday. "In that context, of course, the only solution is a system of guaranteed healthcare where we replace premiums with taxes and everyone has insurance and there's never any possibility of bankruptcy due to healthcare needs."

Under such a system, Lighty said, "out-of-pocket costs are virtually non-existent, you don't have out-of-network costs because there's a single network, and you have the ability to control costs without shifting the cost to the individual. You can't do that under the current system. But you can do that under improved Medicare-for-All."