Insured, but still strapped with huge medical bills

Health insurance is supposed to keep Americans from ending up socked with huge bills, but that's not always the case today.

A rising number of Americans are "underinsured": They technically have health insurance coverage, but the plans come with such high deductibles and co-pays that many are shelling out more than 10 percent of their income to cover medical expenses. That's a finding in a new study from the Commonwealth Fund, a private foundation that studies health care. The trend is only getting worse as 24 million Americans between 19 to 64 years old fell into that category last year, compared with 14 million in 2003.

The bulk of America's underinsured are covered through employer-sponsored plans. The study noted that its results don't include the impact of the Affordable Care Act because the survey polled people before the health care reform completely went into effect. The rates of underinsured adults were the highest for those working for small companies, with 27 percent of people working at businesses with fewer than 100 workers considered underinsured, compared with 14 percent for those with more than that.

The downsides to underinsurance range from Americans opting to skip needed health care because of concerns about costs to crushing medical bills that sapped their savings and lowered their credit scores.

"Millions of consumers continue to be saddled with high out-of-pocket health care costs," the report noted. "The steady growth in the proliferation and size of deductibles threatens to increase underinsurance in the years ahead."

Being underinsured leaves Americans at greater risk for running into problems with medical bills. About half of the underinsured reported problems with paying their medical debts or said they were paying off the obligations. Remarkably, that's the same rate as adults who are uninsured, the study found.

Half of underinsured adults with deductibles of at least $1,000 were paying off medical bills of $4,000 or more, the report added.

"Many adults who have struggled to pay their medical bills report lingering financial problems as a result," the report noted. "People who are underinsured and those who are uninsured have the highest rates of such problems: both groups had higher debt loads and lower incomes than adults who were insured but not underinsured."

As companies seek to cope with rising health care costs, many are looking to reduce expenses by raising deductibles and co-pays. The problem, the study found, is that deductibles are rising faster than income for many American families, leaving them increasingly strapped when they need coverage.

The findings suggest that America needs new approaches for managing health plans, such addressing the fact that many plans have out-of-network physicians working in in-network hospitals, which can unexpectedly saddle families with huge bills.