The Illusion of Coverage

It's no secret that unaffordable medical bills and the resulting medical debt are widespread in the United States. And although the uninsured are most at risk, people with health insurance are also vulnerable. In fact, one survey found that more than 25 percent of people continuously insured over the previous year had medical bill problems or medical debt. A recent report documents the specific ways in which health insurance products can fail to protect you financially.

A research group called The Access Project interviewed 45 people in seven states who had accrued medical debt while they were privately insured. Here is what they found:

1) Some Insurance Characteristics Cause Medical Debt

Things like premiums, deductibles, caps on coverage and uncovered services make individuals with chronic conditions particularly vulnerable. Even though deductibles and co-pays can be modest, over time, these costs can become unaffordable.

2) Some Insurance Processes Cause Medical Debt

Insurance plans often place the burden of complying with a complex web of requirements and procedures on the patients. Some of the interviewees in Access Project Study were left with unpaid bills because they were not informed about the procedures they needed to follow, or were asked to comply with procedures that seemed unnecessary at the time.  

3) Lack of a Choice in Insurance Plans

Most individuals do not willingly choose to have insurance that leaves them vulnerable to serious financial exposure when they become ill. Usually, patients have inadequate insurance because it is the only option offered to them or it is the only option they can afford.

Medical debt can have serious consequences for individuals, including access to care, financial security, employment, access to credit, and psychological quality of life. It is important for you to understand how medical bills can still be unaffordable even with health insurance, especially if you find yourself in a position to have to communicate your situation to others in order to gain financial support. There are still many who have not experienced a chronic illness, or cared for someone with a chronic illness who do not understand that just because an individual has private medical insurance, it doesn't mean that extra help won't be needed in order to avoid financial catastrophe.