Insurance and High Income Don’t Insulate People From Medical Debt

Survey finds one out of five households with incomes above $150K experience financial hardship

Demographics of Medical Debt (Graphic: Business Wire)

LYNDHURST, N.J.--()--A new study from Vitals finds 30 percent of people have personally experienced medical debt or financial hardship due to medical bills.

The survey, part of the Vitals Index, asked more than 1,200 people through an online third-party polling service about the affordability of medical care. The study comes on the heels of the extended deadline for people to sign up for health insurance under the Affordable Care Act.

One of the more revealing facts from the survey is that having health insurance doesn’t alleviate the anxiety around medical costs. About 42 percent of insured people said they still worry somewhat or a lot about paying for medical or pharmacy bills. For good reason: 30 percent of respondents who had debt also carried insurance.

The financial burden of medical care cuts across demographic lines. The highest incidence of hardship (34 percent) occurred in households with incomes between $50,000 - $99,999 – a threshold above the American average income for families. More astonishing was that 22 percent of those who experienced debt or financial hardship had household incomes above $150,000. Households with incomes less than $25,000 had the lowest incidence of medical debt and financial hardship (10 percent).

Women were more likely to feel the pinch of health care costs compared to men (61 percent vs. 39 percent). And education levels, like income, didn’t preclude people from experiencing financial pain. Nearly 22 percent of those with a graduate degree had financial hardship from health care costs, while only 8 percent only high school diplomas reported the same.

The rise of high-deductible plans, coupled with a lack of transparency around health care costs and quality has delivered a devastating effect on individuals and families. One out of four people said unknown costs about their medical care are their top concern. Another 33 percent of people said that they fear medical costs.

“Health care is one of the few things consumers pay for without knowing the price or quality beforehand,” said Mitch Rothschild, CEO of Vitals. “Transparency tools that Vitals has developed for its websites and health plan partners are putting information into the hands of consumers to help them make more informed decisions about their medical care. Cost consciousness will have positive implications on alleviating the cost burden for consumers and the system.”

Despite widespread anxiety, many people are not saving, or not able to save, additional money for medical costs. Vitals found that 60 percent have no additional savings or structured account set up for medical bills.

About Vitals

Vitals is reinventing the way people chose doctors and medical facilities. We provide increased transparency to cost, quality and access information to support effective decision making. Vitals brings together actionable data, online tools and an engaging consumer experience that empowers consumers to make more informed, higher-quality and lower-cost health care decisions. Through health plans, hospitals and our leading consumer websites, Vitals helps more than 150 million people each year access information for better, more affordable care. The Vitals Index is an ongoing report about the state of doctor-patient relationships based on proprietary data and surveys.

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Rosie Mattio, 917-583-6349


Rosie Mattio, 917-583-6349