Studying medical bankruptcies in Massachusetts, whose recent healthcare reform was a model for national reform, researchers found that while new insurance rules increased the number of people who had coverage, those rules did not improve coverage -- leaving many still struggling with medical debt.
Proponents of the national healthcare reform passed into law last year have claimed that it would reduce medical bankruptcy in the United States by helping more Americans get insurance. This new study, which was published Tuesday in the American Journal of Medicine, suggests that a reduction in bankruptcies is unlikely.
“These data suggest that reducing medical bankruptcy rates in the United States will require substantially improved -- not just expanded -- insurance,” they wrote.
To gauge whether healthcare reform in Massachusetts had eased bankruptcies, the researchers looked at a random sample of Massachusetts bankruptcy filers in July 2009, sending surveys to almost 500 households. They compared their results to national and Massachusetts data collected in 2007, before the Massachusetts reform was implemented in 2008.
They found that while the percentage was down slightly, medical bills still contributed to 52.9% of all bankruptcies in the state. Absolute numbers of medical bankruptcies were up by a third. Total bankruptcies in Massachusetts went up 51% between 2007 and 2009.
Families still faced substantial medical debt, they wrote, because healthcare costs continued to rise.
While there is no agreed-upon standard to measure who’s underinsured, said co-author Dr. Steffie Woolhandler, “it’s a little like the line about porn. You know it when you see it.”
The paper cited the example of the least expensive coverage available to a 56-year-old Bostonian in 2009. Such a policy carried a premium of $5,256 and a deductible of $2,000, and covered only 80% of the next $15,000 in costs for covered services. The authors calculated that an insured couple with an income greater than $44,000 (above the eligibility threshold for subsidies) could pay $20,512 for covered annual medical expenses.
Woolhandler said insurance in Massachusetts had become even more expensive in the two years since. “It’s really too much money for the average family -- especially if the breadwinner is the one who gets sick,” she said. Uncovered services could make costs even greater, the study reported.
“We need to reduce limits on deductibles and out-of-pocket costs,” Woolhandler said.
Woolhandler and lead author Dr. David Himmelstein are professors of public health at City University of New York, but were professors at Harvard University when the research was conducted. They are co-founders of Physicians for a National Health Program, which advocates for single-payer health insurance in the United States. The organization was not involved with funding for this study.