Underinsured and overlooked: The growing problem of inadequate insurance

Beyond the uninsured lie the underinsured, people who have coverage, just not enough to keep from getting soaked by medical bills.

By Joel B. Finkelstein, AMNews staff. April 4, 2005.

The lack of insurance is a widely recognized problem in the United States, but what about the lack of adequate insurance?

Tens of millions of Americans have coverage that still leaves medical bills they cannot afford to pay, according to estimates by Consumers Union, the publisher of Consumer Reports.

While lawmakers grapple with the problem of uninsured Americans, the underinsured are still below the radar. Inadequate insurance is not a new issue, but its complex nature continues to make it difficult for Congress to grasp, let alone address.

Now some physicians fear the problem is growing. They are seeing it regularly in their practices, often in the form of unpaid bills.

The culprit is increasing deductibles and other forms of cost sharing that employers are turning to in the face of steeply rising health care costs. For example, the average deductible in PPO plans rose by 40% between 2001 and 2004.

"Traditionally it was just the person who had a lousy insurance policy," said Jeffrey Kaufman, MD, a vascular surgeon in Springfield, Mass. "More recently, we have started to see these patients come in where they have a high-deductible policy and all of a sudden they can't pay the deductible."

Dr. Kaufman said he had seen an increasing number of patients with deductibles and other out-of-pocket costs, such as co-pays and coinsurance, that add up to thousands of dollars. One of his patients has out-of-pocket costs that exceed $6,000 a year. That's 20% or 25% of the patient's family income, he said. "They have coverage, but someone's going to go with a bill that's not fully paid."