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Hearing of the United States Health, Education, Labor and Pensions Committee - Kennedy on the Underinsured

Location: Washington, DC

Hearing of the United States Health, Education, Labor and Pensions Committee - Kennedy on the Underinsured


United States Health, Education, Labor and Pensions Committee Hearing

As Entered into the Record

The number of Americans without health insurance has increased alarmingly in recent years and is likely to grow even larger because of the financial strain caused by the current economic crisis. It is estimated the number of uninsured Americans will exceed 61 million during the coming decade, even with a more robust economy. But the current health care crisis is not just a crisis for the uninsured. It is also a crisis for those who are underinsured.

It is also important to recognize that even with health insurance, many Americans are unable to afford the services they need. The underinsured are mostly adults 19 to 64 years of age who spend more than 10 percent of their income on out-of-pocket health care expenses. With rapidly rising health care costs and declining incomes, an estimated 25 million underinsured Americans face unsustainable costs and inadequate access to needed health care.

Adequately insured Americans have access to appropriate preventive and emergency services and are less likely to postpone or forego needed care because of its cost. Underinsured families often must choose between paying for basic needs such as food, housing or necessary medical care. Only comprehensive health reform will address these systemic problems. Real reform must increase access to care and provide real financial protection for American families.

A tragic consequence of the deterioration in insurance coverage is medical debt and financial hardship among the underinsured. Underinsured persons report arbitrary limits on health benefits, gaps in covered services, and excessive deductibles relative to their income. In 2007, 41 percent of U.S. adults reported problems paying their medical bills, faced bill collectors or were in debt for medical care. Most had insurance when these bills were incurred. Medical debt often saddles families and individuals for years, preventing them from spending money in other sectors of the economy.

Across income levels, underinsured adults devote a disproportionately high share of their income for insurance premiums. Although inadequate insurance is greatest among low-income communities, underinsurance also hurts middle class families. Middle-income adults reported the steepest increase in underinsurance, soaring from 24 to 43% between 2001 and 2007. Though most working Americans receive health insurance through their employers, these workers are being required to bear an increasing share of their health care costs, and, they risk losing their coverage completely. Rising health costs and insurance premiums are straining businesses and workers alike.

Underinsurance also prevents many from receiving the care they need. Underinsured adults are far more likely to go without recommended care because of cost. Rising out-of-pocket costs, such as higher deductibles, coinsurance and copayments, are responsible for much of the increase in unmet medical needs among insured Americans. Inadequate care harms those most in need such as those with diabetes, cancer and asthma. Half of underinsured adults with chronic diseases skip needed medications because of their high cost. Delaying or foregoing needed care can have dire consequences for them, jeopardizing their health and increasing the cost of medical complications in later years.

The pervasive erosion of health insurance coverage is leaving too many Americans poorly protected from illness and medical debt. As a nation, we urgently need health reform to provide a more secure foundation for our future. Fundamental reforms must address the design of health insurance benefits and assure access to affordable high quality care for all our people. I commend Senator Bingaman for bringing this issue of underinsurance to the forefront as we move ahead with national health reform. I look forward to working with my colleagues to address this worsening crisis for millions of families already facing excessive financial burdens in obtaining the health care they need and deserve.

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