Many Working-Age Americans Face Unstable Coverage, Medical Debt

Two out of every five working-age adults in the first half of 2020 had unstable healthcare coverage and a third faced medical debt, a Commonwealth Fund study recently uncovered.

The survey is a part of Commonwealth Fund’s biennial health insurance survey series. Commonwealth Fund conducted the survey from January to June 2020 through both landline and cellphone.

“This survey examined Americans’ health insurance as our country slid into the worst public health and economic crisis in generations. What we found is troubling,” said David Blumenthal, MD, Commonwealth Fund president.

Forty-three percent of working-age adults did not have access to what Commonwealth Fund described as stable healthcare coverage, meaning some were uninsured, fell in a coverage gap, or underinsured.

Of the more than 4,000 adults surveyed, 12.5 percent were uninsured when they were surveyed. Almost one in ten of the respondents (9.5 percent) fell into a coverage gap with an income too high for Medicaid but too low to qualify for subsidies on the Affordable Care Act marketplace.

Over a fifth of the respondents (21 percent) fell into the underinsured category. These individuals faced high out-of-pocket healthcare spending or had high deductibles for their income bracket.

“Even before the pandemic, people were struggling with inadequate health coverage and mounting medical debt,” Blumenthal noted. “It has never been more important to ensure that all US residents have affordable, comprehensive coverage to survive this pandemic and beyond.”

Four groups were more vulnerable to being uninsured: people of color, small business employees, individuals with a low income, and early adults.

“The survey shows a persistent vulnerability among U.S. working-age adults in their ability to afford coverage and health care. That vulnerability could worsen if the COVID-19 pandemic and related economic downturn continue,” said Sara R. Collins, lead author of the study and Commonwealth Fund vice president for healthcare coverage, access, and tracking.

Underinsured individuals are often working for employers whose employer-sponsored health plans have high deductibles. In 2016, the percentage of individuals in commercial health plans that had high deductibles was more than twice what it had been six years prior in 2010. High deductibles in this case take up five percent or more of an individual’s income.

“Coverage inadequacy is compromising people’s ability to get the care they need and leaving many with medical debt at a moment of widespread health and financial insecurity, and an uncertain future,” Collins added.

Beyond strictly coverage concerns—and often in addition to them—many Americans find themselves in medical debt. Fifty percent of those who had ever been uninsured or underinsured said they had medical debt or struggled to pay off medical bills. Many who face medical debt report lost savings, lower credit ratings, and inability to cover basic necessities.

The study’s authors offered five suggestions to help protect Americans from unstable coverage and medical debt.

First, states that have not yet expanded Medicaid should expand their programs. If every state expanded their Medicaid programs, uninsurance would drop by 28 percent, a report from Urban Institute found.

Second, states could bolster Affordable Care Act marketplace premium and cost-sharing subsidies. Many individuals still cannot access plans on the Affordable Care Act marketplace because they do not qualify for subsidies, a Health Affairs analysis explained.

Third, those with unaffordable employer-sponsored health plans could go through a public plan to switch to a marketplaces health plan, the Commonwealth Fund experts suggested.

Fourth, states need to boost their outreach and enrollment marketing. They particularly need to reach the recently unemployed. Providers can play an influential role in ensuring that the uninsured are aware of their options, including Medicaid.

Finally, the authors urged state and federal governments to disallow plans that are short-term and that do not offer essential health benefits. These plans can lead to higher out-of-pocket healthcare spending for enrollees, a Milliman report found.