50% of Americans Fear Medical Bankruptcy

There's more to fear than coronavirus. There's bankruptcy to fear as well, bankruptcy caused by mounting medical bills for treating coronavirus. Half of Americans are afraid of such a financial catastrophe. According to a Gallup survey fielded in July 2020, fully 50 percent of the public is concerned/extremely concerned that a major health event in their household could lead to bankruptcy. In 2019, a smaller 45 percent felt this way. 

Those most likely to be concerned/extremely concerned about bankruptcy due to a major health event are people under age 50 (55 percent) and non-whites (64 percent). Since 2019, the fear of bankruptcy has grown the most for these two groups as well—up 12 percentage points for non-whites, up 12 percentage points for 18-to-29-year-olds, and up 9 percentage points for 30-to-49-year-olds. Those least concerned with going bankrupt due to medical bills are people aged 65-plus (40 percent). Thanks, Medicare!

Overall, 15 percent of Americans have medical debt they will be unable to pay off in the next 12 months. Those most likely to have long-term medical debt are non-whites (20 percent), and households with incomes below $40,000 (28 percent). 

"The sharp rise in U.S. healthcare costs, which was already a significant problem for Americans before the Covid-19 pandemic, has only been exacerbated by new challenges presented by the outbreak," Gallup concludes.

Source: Gallup, 50% in U.S. Fear Bankruptcy Due to Major Health Event

Coronavirus Hospitalization Rates by Age

At what rate are Americans ending up in a hospital due to Covid-19? The CDC is keeping a running tab of Covid-19 hospitalizations in 14 states and comparing the number being hospitalized to area population estimates. The states include New York, which has been hardest hit, as well as California, Colorado, Connecticut, Georgia, Iowa, Maryland, Michigan, Minnesota, New Mexico, Ohio, Oregon, Tennessee, and Utah.

Overall, in the four weeks ending March 28, 2020, the rate of hospitalization due to Covid-19 in the study area was 4.6 per 100,000 population. The hospitalization rate rises with age...

Rate of Covid-19 hospitalizations per 100,000 population, March 1–28
Aged 0 to 4: 0.2
Aged 5 to 17: 0.1
Aged 18 to 49: 2.5
Aged 50 to 64: 7.4
Aged 65 to 74: 12.2
Aged 75 to 84: 15.8
Aged 85-plus: 17.2

Among those hospitalized, 89 percent had underlying health conditions, with hypertension (50 percent) and obesity (48 percent) most common. The CDC findings suggest Blacks may account for a disproportionately large share of those hospitalized with Covid-19. While Blacks accounted for 18 percent of the population of the study area, they were a larger 33 percent of those hospitalized with Covid-19.

Source: CDC, Hospitalization Rates and Characteristics of Patients Hospitalized with Laboratory-Confirmed Coronavirus Disease 2019—COVID-NET, 14 States, March 1–30, 2020

Afraid to Go to the Doctor

Many Americans are now afraid to go to the doctor, according to a Gallup survey. People who need routine medical care—nothing to do with coronavirus—are afraid to visit a clinic or doctor's office.

Here's the question Gallup asked on March 28-April 2: "If you needed medical treatment right now, how concerned would you be about being exposed to coronavirus at a doctor's office or hospital?" Fully 83 percent of Americans say they would be moderately or very concerned, with 42 percent very concerned. Only 4 percent say they would not be concerned at all.

By age, there is little variation in the degree of concern. Young adults aged 18 to 29 (83 percent) are just as likely as those aged 65 or older (82 percent) to be moderately or very concerned.

By health condition, people who are immune compromised are most likely to be moderately or very concerned about going to a doctor's office or hospital (92 percent), with the 56 percent majority very concerned. Most of those with kidney disease and COPD are also very concerned.

Source: Gallup, Americans Worry Doctor Visits Raise Covid-19 Risk

The Financial Hardships of Cancer

One in four cancer survivors aged 18 to 64 had problems paying medical bills, according to a CDC analysis of the material hardships of those who have battled cancer. Behind the hardships is the fact that out-of-pocket medical costs are higher for people with a cancer history than for those with no history of cancer.  Average annual out-of-pocket medical costs in the 2011–16 time period amounted to $1,000 for people aged 18 to 64 with a history of cancer. Their peers with no history of cancer had average annual out-of-pocket medical costs of $622.

Twenty-five percent of cancer survivors reported material hardship due to their cancer, its treatment, or the effects of treatment. The CDC defines material hardship as needing to borrow money, going into debt, declaring bankruptcy, or being otherwise unable to pay out-of-pocket health care costs.

Percentage of cancer survivors who experienced material hardship
Total survivors aged 18-64: 25.3%
Any private health insurance: 21.9%
Only public health insurance: 33.1%
Survivors with no health insurance: 36.5%

Having private health insurance did not prevent cancer survivors from experiencing material hardship. "Even many cancer survivors with private insurance coverage reported borrowing money, being unable to cover their share of medical care costs, going into debt, or filing for bankruptcy," notes the report. "Mitigating the negative impact of cancer in the United States will require implementation of strategies aimed at alleviating the disproportionate financial hardship experienced by many survivors," the report concludes.

Source: CDC, Annual Out-of-Pocket Expenditures and Financial Hardship among Cancer Survivors Aged 18–64 Years—United States, 2011–2016

You Don't Want to Belong To This 1%

The average American incurred $5,006 in medical expenses in 2016, according to the federal government's Medical Expenditure Panel Survey. But an unlucky few spent much more than average. Just 5 percent of the population accounted for half of all medical spending in 2016. Here is the average health care spending incurred per person in 2016 at selected percentiles of spending...

Average spending per person by percentile of health care spending, 2016
Top 1 percent of spending: $110,003
Top 5 percent of spending: $50,077
Top 10 percent of spending: $33,053
Top 50 percent of spending: $9,735
Bottom 50 percent of spending: $276

Not surprisingly, people aged 65 or older were the largest share (43 percent) of those in the top 1 percent of medical spending, and 45-to-64-year-olds accounted for another 34 percent.

Medicare was a big source of payment for those in the top 1 percent, covering 36 percent of their health care costs. Private insurance paid another 37 percent of their costs. The top 1 percent paid 5.5 percent of its health care bills out-of-pocket.

Source: Medical Expenditure Panel Survey, Concentration of Health Expenditures and Selected Characteristics of High Spenders, U.S. Civilian Noninstitutionalized Population, 2016

991 Million Doctor Visits in 2015

Americans visited the doctor 991 million times in 2015, according to the National Center for Health Statistics. That 3.1 visits per person, on average. Here are the averages by age...

Average number of physician office visits per person, 2015
Under age 1: 6.2
Aged 1 to 17: 1.8
Aged 18 to 44: 2.0
Aged 45 to 64: 3.7
Aged 65-plus: 6.6

Females are more likely than males to visit the doctor, with an average of 3.6 visits per year for females and 2.6 for males.

Source: National Center for Health Statistics, Characteristics of Office-Based Physician Visits, 2015

Median Annual Out-of-Pocket Health Care Costs for People Aged 70 or Older: $2,012

One of the biggest concerns of the American public is not having enough money to pay for health expenses in old age. Only 14 percent of workers and 26 percent of retirees feel "very confident" they will have enough money to pay for medical care throughout retirement, according to the 2018 Employee Benefit Research Institute's Retirement Confidence Survey.

How much do older Americans pay out-of-pocket for medical care in their final decades of life? That question has an answer: a median of $2,012 per year in addition to the cost of health insurance, according to Sudipto Banerjee of the Employee Benefit Research Institute. He estimated the out-of-pocket medical costs of people from age 70 until death, using longitudinal data from the Health and Retirement Study. The estimate is in 2015 dollars and adjusted for medical inflation.

A couple thousand dollars a year doesn't sound too bad. Many retirees can pay for those expenses out of current income rather than dipping into savings. But, here's the catch—some older Americans will pay much more. Those with the bad luck to end up in the 95th percentile of medical expenses, for example, must cough up $19,103 per year out-of-pocket. It's hard to pay bills like that without tapping into savings or running out of money altogether.

Long-term care costs are driving up out-of-pocket medical expenses for the unfortunate few. To cover those costs, retirees must drain savings accounts, and many ultimately become dependent on Medicaid—the health insurance program for the poor. By the end of life, 33 percent of retirees in the HRS study were dependent on Medicaid to cover their health care costs, up from only 11 percent who were on Medicaid at age 70.

No one knows whether they will need long-term care, but the numbers are not encouraging. Banerjee's study shows that 38 percent of men and 51 percent of women aged 70 will receive nursing home care at some point before they die.

With the threat of long-term care costs looming, many retirees are hesitant to spend their savings. (See the Demo Memo post about another Banerjee study showing this to be the case.) "This raises a question about whether, if such risks could be insured more efficiently, retirees would be able to spend their retirement assets more freely and whether this might improve their personal welfare and/or have positive macroeconomic effects as well," Banerjee concludes.

Source: Employee Benefit Research Institute, Cumulative Out-of-Pocket Health Care Expenses After the Age of 70

Medicaid Expansion Makes a Difference

Medicaid expansion has greatly increased health care access among low-income Americans. For proof, look no further than a series of tables recently released by the National Center for Health Statistics. The tables compare health care access in 2016 for two groups of low-income adults aged 19 to 64: those who live in Medicaid expansion states, and those who don't...

• No usual place of health care: 32 percent of low-income adults in nonexpansion states do not have a usual place of health care versus a smaller 18 percent of those in expansion states.
• Did not get needed medical care due to cost: 20 percent of low-income adults in nonexpansion states did not get needed medical care due to cost in the past 12 months. For those in expansion states, the figure was only 9 percent.
• Delayed medical care due to cost: 21 percent of low-income adults in nonexpansion states delayed medical care due to cost in the past 12 months. In nonexpansion states, just 11 percent were forced to delay care.
• Did not get needed prescription medicine due to cost: 18 percent of low-income adults in nonexpansion states needed but could not afford prescription medicine in the past 12 months. The figure was just 10 percent in expansion states. 

Source: National Center for Health Statistics, Access and Utilization by Medicaid expansion status for low-income adults aged 19 to 64: Estimates from the National Health Interview Survey, United States 2016

One in Five Americans Has Past-Due Medical Bills

Medical debt looms over millions. Fully 21 percent of Americans aged 18 or older had unpaid, past-due medical bills in 2016, according to a FINRA Investor Education Foundation survey.

Women are more likely than men to have unpaid, past-due medical bills—23 percent of women versus 18 percent of men. Younger adults are more likely to have past-due medical bills than older Americans. Among adults under age 55, nearly one in four (24 percent) had unpaid, past-due medical bills. Among those aged 55 or older, the figure was 14 percent.

Source: FINRA Investor Education Foundation, Financial Capability in the United States 2016

Dying Slowly from Serious Health Conditions

Dying has changed. It has become a slow process rather than a sudden event, according to the Kaiser Family Foundation. "Due to medical advances and the ability to manage chronic conditions in older adults, more people are living longer and, rather than dying from acute episodes of illness, they are dying after long periods of sickness and declining health," says Kaiser. After surveying a nationally representative sample of adults aged 18 or older, Kaiser finds most Americans (74 percent) are aware of this fact.

What are the primary conditions that cause this slow death? The Kaiser survey probed a large subset of its survey sample—respondents aged 65 or older who are experiencing a serious illness that has resulted in functional limitations or who have been diagnosed with specific conditions such as diabetes, lung disease, heart disease, cancer, or dementia. Also included in this subset were family members whose loved ones aged 65 or older are (or were) experiencing serious illness (prior to their death). For the seriously ill, these were the most commonly diagnosed conditions (many had more than one)...

52% had dementia
47% had heart problems/stroke
35% had diabetes
28% had mental health problems (anxiety, depression)
26% had lung problems (asthma, emphysema, COPD)
24% had cancer
14% had chronic kidney disease or kidney failure

The prolonged process of dying places great demands on the health care system. Most Americans think the system comes up short. The 52 percent majority of the public says the health care provided to older people with serious health conditions is only fair or poor. To track the evolution of attitudes and policies to cope with serious illness in late life, Kaiser plans more surveys in the future.

Source: Kaiser Family Foundation, Serious Illness in Late Life: The Public's Views and Experience

Paying Medical Expenses Out-of-Pocket

Americans incur $1.5 trillion in health care service expenses in a year's time—an average of $5,531 per person with expense, according to the government's Medical Expenditure Panel Survey. Those with medical expenses pay an average of $686 out-of-pocket—or 12.4 percent of the total. There are big differences in the out-of-pocket share of expense by type of service...

Percent of health care service expenses paid out-of-pocket
12.4% for all health care services 
2.6% for hospital inpatient services
5.9% for hospital outpatient services
6.6% for home health care services
9.0% for emergency room services
11.6% for physical/occupational therapist visits
11.8% for nurse/nurse practitioner visits
13.0% for physician visits
13.5% for physician assistant visits
13.9% for prescription drugs
35.6% for optometrist visits
35.7% for chiropractor visits
40.6% for dental visits
58.6% for orthodontist visits
60.9% for eyeglasses/contact lenses

Source: Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey, 2014 Expenditures Per Person by Health Care Service

10 Most Commonly Treated Health Conditions

In a year's time, 85 percent of Americans incur health care expenses, according to the Medical Expenditure Panel Survey, at a total cost of $1.5 trillion in 2014. These are the 10 conditions for which the largest number of people incurred expenses in 2014...

62.0 million treated for hypertension
49.8 million treated for mental disorders
47.4 million treated for COPD, asthma
47.2 million treated for high cholesterol
40.6 million treated for osteoarthritis
36.4 million treated for trauma
29.9 million treated for acute bronchitis
26.2 million treated for skin disorders
25.8 million treated for upper GI disorders
25.6 million treated for diabetes

Source: AHRQ, Medical Expenditure Panel Survey

Many Americans Have Past-Due Medical Debt

Among adults under age 65, a substantial 24 percent had past-due medical debt in 2015, according to a study by the Urban Institute. The figure varies by state, ranging from a low of 5.9 percent in Hawaii to a high of 37.4 percent in Mississippi. Among the 10 states with the highest rates of past-due medical debt, 8 are in the South...

States with largest percentage of 18-to-64-year-olds with past-due medical debt
Mississippi: 37.4%
Arkansas: 36.3%
West Virginia: 33.0%
Indiana: 32.5%
South Carolina: 32.4%
Kentucky: 30.9%
Missouri: 30.6%
Oklahoma: 30.0%
Alabama: 30.0%
Georgia: 29.2%

Hawaii is the only state in which the percentage of people aged 18 to 64 with past-due medical debt is below 10 percent. Minnesota has the second-lowest rate (13.3%), followed by California (16.0%), Massachusetts (16.1%), and Connecticut (16.3%).

Source: Urban Institute, Past-Due Medical Debt among Nonelderly Adults, 2012-15

American Health Care May Be "Uniquely Inefficient"

The U.S. health care system may be uniquely inefficient compared to other countries, according to a National Bureau of Economic Research study. NBER researchers compared the diffusion of drugs of high and low quality (defined by relative therapeutic benefit) in the U.S. versus their diffusion in Australia, Canada, Switzerland, and the United Kingdom.

Low quality drugs, they find, are adopted more quickly in the United States. This finding supports the theory that health care in the U.S. is inefficient relative to health care in other countries. "The U.S. health care system may be 'uniquely inefficient' in the sense of fueling the rapid adoption and diffusion of medical technologies with small or unknown benefits," the researchers conclude.

Source: National Bureau of Economic Research, Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs, NBER Working Paper #23068

Pet Health Care Spending Looks Very Human

Americans love their pets. They love them so much that spending on pet health care mirrors spending on human health care. "Many features of the American pet health care sector are, qualitatively, remarkably similar to those of the American human health care sector," reports a National Bureau of Economic Research working paper. Here are the similarities...

• Spending on pet and human health care surged between 1996 and 2012. Human spending grew 50 percent and pet spending grew 60 percent during those years, after adjusting for inflation. 
• For both types of health care, spending rises with household income. 
• The number of human health care providers (physicians) and pet health care providers (veterinarians) soared between 1996 and 2013—a 40 percent increase in physicians and a near doubling in veterinarians.
• At the end of life, spending spikes for both pets and humans.

These similarities suggest, say the researchers, that the rapidly rising cost of human health care may have less to do with health insurance and government involvement (as some theorize) and more to do with "deeper primitives"—such as our desire to keep alive those we love, regardless of the cost.

Source: National Bureau of Economic Research, Is American Pet Health Care (Also) Uniquely Inefficient?, Working Paper 22669 ($5)

In Three States More than 25% of 18-to-64-Year-Olds Do Not Have A Usual Place of Medical Care

Among Americans aged 18 to 64, a substantial 17 percent do not have a usual place of medical care. The figure ranges from a low of just 2.8 percent in Vermont to a high of 26.7 percent in Nevada. These are the states with the largest and smallest percentages of 18-to-64-year-olds without a usual place of medical care...

States with the largest percentage of 18-to-64-year-olds without a usual place of medical care
Nevada: 26.7%
Idaho: 26.6%
Texas: 25.4%
Oregon: 23.7%
Wyoming: 23.6%

States with the smallest percentage of 18-to-64-year-olds without a usual place of medical care
Vermont: 2.8%
Delaware: 6.8%
Massachusetts: 7.5%
Wisconsin: 9.5%
Hawaii: 10.0%

Source: National Center for Health Statistics, State Variation in Health Care Service Utilization: United States, 2014

Time Spent in Health-Related Self Care

Many Americans have health needs that require daily attention. The American Time Use Survey measures this time, calling it "health-related self care," and documents its growing importance in daily life as people age. Health-related self care includes activities such as taking medicine or vitamins; resting because of an illness or injury; giving oneself a shot; testing blood sugar levels; taking insulin; applying ointment; putting ice on an injury; changing oxygen; doing childbirth, stress management, or therapeutic exercises; and even meditating (not religious).

On an average day, 7 percent of people aged 15 or older engage in health-related self care as a primary activity. Among people aged 75 or older, the proportion is one in five...

Percent participating in health-related self care on an average day
Aged 15 to 19: 1%
Aged 20 to 24: 2%
Aged 25 to 34: 2%
Aged 35 to 44: 3%
Aged 45 to 54: 8%
Aged 55 to 64: 9%
Aged 65 to 74: 12%
Aged 75-plus: 21%

The time devoted to health-related self care is not trivial. Those who engage in health-related self care on an average day spend more than an hour attending to their health needs.

Source: Demo Memo analysis of unpublished tables from the Bureau of Labor Statistics' 2014 American Time Use Survey

Why Working-Age Adults Go to the Emergency Room

Among Americans aged 18 to 64, a substantial 18 percent visited an emergency room one or more times in 2014, according to a report by the National Center for Health Statistics. These are the reasons people visit an emergency room rather than go to a doctor's office...

Reasons for emergency room visit
Seriousness of the problem: 77.1%
Doctor's office not open: 11.8%
Lack of access: 7.0%

Note: Lack of access includes didn't have another place to go, emergency room is the closest provider, or get most of care at the emergency room.
Source: National Center for Health Statistics, Reasons for Emergency Room Use among U.S. Adults Aged 18-64: National Health Interview Survey, 2013 and 2014

Older Singles Spend More on Health Care

For Americans aged 65 or older, out-of-pocket per person health care expenses are greater for singles than for couples, according to the Employee Benefit Research Institute. EBRI analyzed two types of out-of-pocket expenses: recurring (dental visits, doctor visits, and prescription drugs), and nonrecurring (outpatient surgery, hospital stays, in-home care, and nursing home care). During a two-year period, recurring expenses average $2,500 per person regardless of age or whether the elderly person lives alone or with a spouse. "It was clear that the recurring health care expenses were very predictable," notes EBRI.

Nonrecurring out-of-pocket expenses are another story. Not only are per person expenses higher for singles than for couples, but the difference increases with age. For singles aged 65 to 74, average nonrecurring expenses were $766 more for singles than for couples ($2,790 versus $2,024 over two years). By age 85-plus, singles spent an average of $4,825 more than couples on a per person basis ($13,355 versus $8,530).

What makes nonrecurring out-of-pocket expenses so much more costly for singles than for couples? Singles do not have the advantage of a live-in caregiver, suggests EBRI. The biggest differences in out-of-pocket nonrecurring costs were for nursing homes and home health care. "As health breaks down with age," EBRI concludes, "the advantage of having a spouse or partner to act as caregiver results in lower spending."

Source: Employee Benefit Research Institute, Differences in Out-of-Pocket Health Care Expenses of Older Single and Couple Households

Long-Term Care Policy Lapses and Cognitive Decline

Among men and women aged 65 who have purchased long-term care insurance, more than one in three will let their policy lapse before they die. Why do so many policies lapse? That's what researchers at the Center for Retirement Research at Boston College wanted to know. Their analysis shows that cognitive impairment is one important reason for lapsing. With age, some policy holders—the ones who will need long-term care the most—forget to pay the premium or no longer understand why they need a policy.

A higher cognitive score is associated with lower lapse rates, report the researchers. Interestingly, so is having a daughter—someone who can remind the policyholder of the importance of paying the premium. "Having a daughter is associated with a 14.3-percentage-point decrease in the probability of lapsing," the researchers report.

Source: Center for Retirement Research at Boston College, Why Do People Lapse Their Long-Term Care Insurance?