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Problem of Underinsurance and How Rising Deductibles Will Make It Worse

While the Affordable Care Act has significantly reduced the number of uninsured, the number of underinsured Americans grew from 12% of the population in 2003 to 22% in 2010 and has leveled off at 23% in 2014. Currently, 31 million American adults under age 65 are underinsured.

When is someone underinsured? These are the criteria developed by The Commonwealth Fund in a new report on the issue:

  • Out-of-pocket health care costs over the past year, excluding insurance premiums, came to 10% or more of household income; for the poor with an income under 200% of the federal poverty level, the underinsured threshold for annual health care costs is 5% or more of income.
  • Those who didn’t incur health care costs in the past year may be at underinsurance risk if their health plan deductible is 5% or more of household income.

Insurance deductibles have played a key role in the rise of underinsured Americans, with deductible amounts growing faster than family incomes. For employee sponsored health insurance, the number of plans with deductibles in the $1000-$2999 range grew from 7% to 27% between 2003-2014, and plans with $3000 or higher deductibles grew from 1% to 11%.

It’s no surprise that low-income adults or those with health problems are at greatest risk from underinsurance. They may defer or delay health care because of costs. When they do incur medical costs, they can face lingering financial problems as a result.

Source: Collins SR and others. The problem of underinsurance and how rising deductibles will make it worse; findings from the Commonwealth Fund Biennial Health Insurance Survey, 2014. Commonwealth Fund Issue Brief, May 2015. http://www.commonwealthfund.org/publications/issue-briefs/2015/may/problem-of-underinsurance


Barr P. Little difference between being insured and uninsured for some Americans. Hospitals & Health Networks Daily, May 20, 2015. http://www.hhnmag.com/display/HHN-news-article.dhtml?dcrPath=/templatedata/HF_Common/NewsArticle/data/HHN/Daily/2015/May/ACA-underinsured-Americans-blog-barr

Commins J. ‘Underinsured’ may be the next healthcare crisis. HealthLeaders Media, May 21, 2015. http://www.healthleadersmedia.com/content/HEP-316567/Underinsured-May-be-the-Next-Healthcare-Crisis

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

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