The whole point of health insurance is protection from financial ruin in case of catastrophic, costly health problems. But a recent survey of people facing such problems shows that it often fails in that basic function.
The survey, of some of the country’s most seriously ill people, found that even with health insurance, more than a third of the respondents had spent all or most of their savings while sick. They are often faced with deductibles and co-payments; treatments their insurance won’t cover; and financial challenges — like lost work — that health insurance alone can’t address.
The New York Times, the Commonwealth Fund and the Harvard T.H. Chan School of Public Health used the survey to examine the sliver of the American population who use the health care system the most. To be included in the results, a respondent had to have been hospitalized twice in the last two years, and to have seen at least three doctors. In some cases, when patients had died or were too ill to answer questions, relatives who had taken care of them participated in their place.
Their experiences may serve as an early warning system for problems that all of us may face: Because the estimated 40 million people in this population visit doctors, hospitals, nursing homes and pharmacies the most, they are the likeliest to see the weak points in the health care system.
One of these is financial insecurity. Among people with health insurance, more than 20 percent had trouble paying for basic necessities. More than a quarter had bills in collection, and 13 percent had borrowed money as a result of their illness.
Health insurance provided some protection against such outcomes — those in the survey who were uninsured were even more likely to face mounting bills and debts — but the insurance was generally not enough. The intensity of care increased the number of co-payments those surveyed faced, and it increased the chances of receiving the kind of treatment that their insurance denied. And they were most likely to get stuck paying insurance deductibles, which have been steadily rising over the last two decades.
Thirty-one percent of people in the survey said they were unsure what their health insurance would pay for. Forty-two percent said they’d received a hospital bill that their insurance had not fully covered. Twenty-six percent said a treatment their doctor recommended was denied by their insurance.
“What’s staggering here is there’s no way people could know what they would be in for,” said Robert Blendon, a professor at Harvard who helped devise the survey. “They don’t know what their insurance covers. The consequences for people are quite extraordinary.”
Tristan Berger, 47, who was born with spina bifida, has had 16 reconstructive operations on his feet since age 13. A decade ago, he found himself too disabled to continue working, after a series of falls. His wife has health insurance through her job at Walmart, and he has some income from the Social Security disability program, but nearly all of it goes to his medical bills.
Mr. Berger, who lives in Tucson, said he spent $12,000 last year on care not covered by his health insurance. When we spoke recently, he had already spent a similar amount this year, after his latest orthopedic operation.
“You sit there every month trying to figure out what bill to pay: Do you pay the hospital bill or do you pay the utility bill?” he said. “There’s no savings. We’re part of that percentage of America that are one paycheck from being destitute.”
Sarah Miller, an assistant professor at the University of Michigan Ross School of Business, has studied how health insurance protects Americans from financial risk. The evidence is strong that coverage, particularly Medicaid, makes a difference. But she said it could still prove insufficient for people with complex needs.
“You’re kind of at a disadvantage as a consumer going against these big complicated systems that don’t always have your best interest at heart,” she said. “And I think that’s why there’s so much financial burden, even among people with private insurance.”
Health insurance, of course, provides little help for people who have to cut back on work because of their own illness or that of a family member. Mr. Berger had a steady income and good benefits when he worked as the housekeeping director for a retirement community. But once he became too ill to keep working, his income fell. Fifty-three percent of people in the survey said their work had been interrupted by illness, causing financial difficulties and compounding the burden of medical bills.
Research suggests that such work interruptions can have long-term consequences for people who become ill or are injured. A recent paper in the American Economic Review found that, for middle-aged Americans, going to the hospital could mean an average income reduction of 20 percent that persists for six years or more.
Illness can also put financial strain on family members who are not sick themselves. Dana Lewis thought she had become an expert at navigating the health care system after caring for twin daughters born with cerebral palsy. But when her husband’s dementia worsened and he needed nursing home care, she encountered new logistical and financial obstacles.
To qualify him for Medicaid in Oklahoma, where they live, she was required to spend down her assets, including liquidating her 401(k) retirement savings. “Now I’m 60 years old, and I have zero retirement,” she said. The survey found that those taking care of ill relatives can often face such challenges. Twenty-three percent of those surveyed said friends or family members caring for an ill person ran into financial strain as a result of this responsibility, and 15 percent of caregivers had to quit or change their jobs.
Maria Elena Flores, 64, had been working as a home health aide for seniors when she had to give up her job in 2012 to provide the same care to her husband, who was recovering from triple bypass heart surgery. Since then, his health has declined. He developed vascular dementia and was acting erratically last year when he caused Ms. Flores to fall and injure her back.
Even with her expertise, she has struggled to find the right care for her husband near their home in San Ysidro, Calif. He was discharged from one nursing home because of his behavior, she said, and her local hospital was unable to help her find another place to care for him.
“Because he was a headache for them,” she said. She continues to care for him at home.
More than two-thirds of people in the survey said their doctors had never discussed the cost of their care. Medical providers generally don’t, particularly when dealing with the most acutely ill. But some clinicians have started talking more about such matters, noting that the financial stress of unpaid medical bills should be seen as another kind of side effect of certain treatments.
Khurram Nasir, an associate professor of medicine at Yale, has adopted a phrase from cancer research, “financial toxicity,” as he realized many of his cardiac patients were struggling to pay for care and making tough choices like skipping pills or cutting back on food.
“When I started realizing this, I took it upon myself as a responsibility to talk to my patients about these issues,” he said. “It was very hard for patients to bring this topic to our attention.”
The survey included landline and cellphone telephone interviews with 1,495 adults who either had a serious illness or were caring for someone who did. Interviews were conducted in English and Spanish. The results are nationally representative. The margin of error is plus or minus 3.2 percentage points for most questions.