Americans face difficult choice between health and wealth

Marcus Pickett

About four in 10 Americans between ages 19 and 64 are struggling with the cost of medical bills, according to March 2011 survey from the Commonwealth Fund. And it's not just the uninsured who are in a tight spot -- those with insurance are struggling with costs as well.

Americans' health care woes have become especially acute in a tough economy. Nearly one-fourth of those surveyed said they or a spouse had lost a job within the past two years. Those who get laid off often lose their health coverage. Many struggle to pay medical bills and outstanding debts, and find themselves wrangling with collection agencies. Those who do find insurance in the individual market don't fare much better and often face higher deductibles and premiums.

The consequences? Four in ten Americans reported forgoing health services because of the cost. These missed health services included doctor visits, prescriptions, and recommended tests, treatments, follow-ups and specialist care.

A chronic condition

The Commonwealth Fund publishes its report every two years, and the struggle to stay ahead of medical bills is nothing new. Even during the middle 2000s, medical costs often were a financial hardship that many households couldn't overcome. In 2005, 34 percent of Americans were struggling to pay their medical bills and 37 percent were forgoing medical care. The same percentage of Americans (28 percent) were without health insurance in 2005 and 2010.

Yet the amount of Americans' incomes that goes toward health coverage is on the rise. The percentage of Americans spending 10 percent or more of household income on insurance premiums and out-of-pocket expenses climbed from 23 percent in 2005 to 32 percent in 2010, according to the Commonwealth Fund. This suggests that today, health insurance is becoming less comprehensive -- and that part of the reason Americans are struggling is they're paying more for less coverage.

A sickly economy

The economic recession has created budget woes for federal and state governments that make it tricky to afford health care reform. But the struggles that Americans encounter in paying for their medical care takes its own toll on the economy.

Health care inflation saps consumer demand from the rest of the economy by consuming more household income each year. It also destroys worker productivity. Those who forgo medical care can create or exacerbate chronic illnesses that lead to more sick days and less productivity on the job. In 2007, the Milken Institute published a report on lost productivity resulting from inadequate health care services for seven chronic illnesses (cancer, diabetes, heart disease, hypertension, mental disorders, pulmonary conditions and stroke). The report contends that improved treatment (and access to treatment) for these chronic illnesses could increase GDP by $6.9 trillion over the next two decades.

Second opinions

The Commonwealth Fund is not the only organization to study and document the rise in medical costs with a decline of health care services.

Two Gallup polls released in March 2011 documented a decrease in the number of Americans who get health insurance through their employers and the increase in the numbers of the uninsured in all 50 states. Both the Gallup polls and the Commonwealth Fund report point to health care reform's potential to reduce Americans' struggles with their medical bills. Questions remain about whether reform will cripple the federal and state budgets. Yet the 2014 health insurance mandate and the subsidies that go with it would extend coverage -- and may help encourage Americans to get the health care they've been neglecting, according to the Commonwealth Fund.