High healthcare costs a headache for the insured: Study

Massachusetts’ landmark health insurance overhaul in 2006 notwithstanding, the rising healthcare costs are eating the monthly income of the insured by more than 10%, according a study from leading nonprofit organization dedicated to the cause of affordable healthcare, Families USA.

According to the study, more than 1 million Massachusetts residents will end up spending more than 10% of their monthly pretax income on healthcare this year. Compared to 2000 statistics, the number of people under healthcare has risen from 46% to 94%.

Ran Pollack, Executive Director of Families USA, elaborating on the issue, said, “It’s not just the uninsured that are suffering from the pangs of high healthcare costs. Even the insured ones are finding it harder to find a way to meet the rising insurance costs, as the high premiums are wrecking havoc to families’ monthly budget.”

The startling revelation of the study comes in the form of a statement to the effect that a considerable number of residents will end up spending a lot more than 10% of their income on healthcare costs. For instance, the researchers found that around 300,000 Bay State residents constitute families that are likely to spend over a quarter of their monthly pretax income on healthcare. “And over 90% of the Bay State residents are under insurance cover”, said Pollack.

The high percentage of families in Massachusetts under insurance cover can be attributed to a unique 2006 decision of the government to make health insurance compulsory, or pay a tax penalty. This is the reason why Massachusetts has highest percentage of insured in the USA. However, the ascending monthly premiums coupled with descending coverage for services and medications has led the individuals to harbor second thoughts about the whole need to compulsorily go for health insurance. This is evident from the mounting calls by the residents to the consumer help lines of the insurance companies.

“In the recent months, we are witnessing a surge in the number of calls from hapless people trying desperately to pay their medical bills despite exhausting all their savings and running into debts,” said Carol Pryor, policy director at Access Project, a Massachusetts based nonprofit catering to the consumers who want to negotiate payment plans.

The blame rests with the increasing use of prescriptions and hospital care, pricey new medical screenings, and an insurance market with few consumer protections, the study concluded.

Efforts are afoot to arrest the situation at all levels and curb the rising health costs that are growing faster than the national average. A State Commission is already trying to dish out strategies that can help in slowing down the rate rising healthcare costs. Anya Rader Wallack, co-chairperson of the commission’s cost-containment committee, offers the solution, “The solution lies in understanding the way we pay for healthcare, addressing the negatives, reducing the inefficiencies in the system, and finally, redesigning the way healthcare is delivered.”

Elaborating on the plans of the committee, Wallack said, “We intend to have a report ready by September that will lay out multiple strategies in order to considerably reduce the costs of healthcare.”

The national figures indicate 64 million people under the age of 65 constitute families that spend more than 10% of their pretax monthly income on healthcare, the report concluded. Out of these, around 19 million are those that spend more than 25% of their pretax monthly income on health insurance.