Medical costs have been the central preoccupation of recent debates about health care in the United States. The litany of stunning facts is now familiar. Medical costs from 1950 to 1990 increased almost tenfold, after adjusting for inflation. Since the 1950s, American expenditures for health care have gone from about 5 percent of national income to over 13 percent. Although much of the health care bill is paid by "third-party" payers, such as insurance companies or Medicare–Medicaid, a large portion remains payable by each of us personally, even if we are insured. For some families, if their costs are low or their incomes are high, the amount left over after third-party payment can be handled in a single payment. But for many others, the high cost of medical care translates directly into the high debt to meet those costs.
Although little study has been devoted to medical debt, as opposed to medical cost, the available evidence suggests that medical debt is a serious problem for many Americans. Even in the late 1970s, a major survey of American consumers reported that medical debt was an important part of the debt picture. They reported that the number-one reason for taking out personal loans other than for durable goods was to pay medical costs. Those consumers reported that the loans they took for medical reasons constituted more than a quarter of the loans taken for any specified purpose. Medical debts generally were by far the most important single type of debt reported.
The limited information available for more recent periods suggests that medical debts continue to be a major financial factor for many Americans. The Federal Reserve Bank reports that in 1989, for example, 3.5 percent of second mortgage loans - relatively long-term loans secured by the debtors' homes - were taken out to pay medical bills. The data are spotty, but they point toward medical debt as a key factor in the financial collapse of many families.
The importance of medical debts in the lives of so many Americans should come as no surprise when so many people face rising medical costs without the buffer of health insurance. In the great health care debates of recent years, one item of contention has been the number of uninsured Americans. One major variable that produces different figures from different sources is based on the shifting definitions used in the studies.
Who are the "uninsured"? Are they people who have no coverage at any point in a year? People who have no coverage for at least eleven months of the year? People who have no coverage for at least one month of the year? Different definitions yield different estimates of the number of uninsured Americans. In 1987 the Public Health Service compiled the most specific and detailed study conducted in many years. In its report, the National Medical Expenditure Study, the service concluded that more than twenty-four million people had no health insurance at any time during the year. More than twenty-three million were covered for only part of the year, yielding a total of forty-eight million people without insurance for at least part of the year. By this reckoning, 10.2 percent of Americans had no health insurance during 1987, and another 9.7 percent were without health insurance for at least part of the year.
Based on the annual Survey of Income and Program Participation, the Census Bureau reports even more Americans with gaps in their insurance coverage during 1991. The bureau reports the part-year uninsured total for 1991 as fifty-one million, higher than the Public Health Service figure for 1987, but it identifies a substantially lower figure for people uninsured all year. The Census Bureau says that about seventeen million people had no insurance throughout 1991. The multiple reports from a single agency in a single year also act as a caution against inferring trends over time; the differences among the reports may reflect alternative definitions and survey techniques rather than changes over time in insurance coverage. In spite of some confusion, however, it appears that by 1996 at least forty million people were uninsured at some point during the year.
For our purposes, it is enough to note the general agreement that somewhere between thirty and fifty million Americans are without health insurance during any given year. This figure represents between 11 percent and 19 percent of the U.S. population of 263 million. Another perspective on insurance coverage emerges from an examination of the data over a somewhat longer period. One of the Census Bureau studies includes data that cover about two-and-a-half years from 1991 through mid-1993. During that time, 4 percent of Americans had no health insurance for the entire period. In addition to this core of long-term uninsured, an additional 26 percent of Americans had no insurance coverage for at least one month. This meant that about seventy-nine million people faced some time when they had no insurance as a backstop against medical bills, including about ten million who had no insurance protection at any time during a period of nearly three years.
It also appears that the ranks of the uninsured are growing steadily. In 1998, the Census Bureau published a study focusing on health insurance coverage for children. It concluded: "The number of American children without health coverage rose from 8.2 million to 10.6 million from 1987 to 1996, overall a period of relative prosperity. . . . The proportion of uncovered children rose as well, from 12.9 percent to 14.8 percent of the under-18 population. . . . By number, the largest group of children are not poor, as four-fifths are above the poverty level." The recent decline in insurance for children probably reflects the decline in coverage for families generally.
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