With health insurance moving toward greater patient cost sharing, a study by private foundation Commonwealth Fund finds a sharp increase in the number of underinsured people, a group that, logically, also has greater problems with their medical bills.

Based on indicators of cost exposure relative to income, about 25 million insured Americans ages 19–64 were actually underinsured during 2007, a 60% increase since 2003, according to the study, published Tuesday.

The rate of increase was steepest among those with incomes above 200% of the poverty line (in order words, lower to middle income), where underinsurance rates nearly tripled. In total, 42% of American adults were underinsured or uninsured last year.

The study's authors identified the underinsured population based on exposure to out-of-pocket costs relative to income. They found that the number of underinsured adults under age 65 rose sharply between 2003 and 2007 as coverage eroded for middle-income families.

The erosion occurred because health care costs have risen faster than incomes – between 2000 and 2007, premiums rose 91% while wages rose 24% – and the overriding trend for insurance plans is toward higher deductibles and patient cost sharing. Some plans also have restricted or eliminated some core benefits, such as prescription drug coverage.

The United States already stands out internationally for high per-person, out-of-pocket spending, the authors state, yet private insurance benefit designs rarely take income into account.

About half of uninsured and nearly half of underinsured adults reported difficulty paying bills, being contacted by collection agencies for unpaid bills, or changing their way of life to pay their medical bills, according to the study.

Many of those reporting bill problems also said they took out a loan, a mortgage against their home, or used credit cards to pay their bills, which the authors suggest have the potential to make their financial difficulties linger well into the future.

A Commonwealth Fund survey conducted last year and included in this study found that:

27% of all adults reported problems paying medical bills; 15% of insured people did, 36% of underinsured did and 45% of uninsured people had problems.

18% of all adults changed their way of life to pay medical bills; 10% of insured patients did, 27% of underinsured did and 30% of uninsured patients made changes.

16% of all adults were contacted by a collection agency about their medical bills; 10% of insured patients were contacted, compared with 17% of underinsured patients and 24% of uninsured patients

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