Why So Many Insured People Have Big Medical Debts

By Ken Terry | Sep 3, 2009

One in seven adult Californians who are less than 65 years old are paying off medical debts in excess of $2,000. Remarkably, two-thirds of those debtors are insured, according to a study by the UCLA Center for Policy Research.

Among the 2.2 million people who were paying off big medical bills, 17 percent had debts ranging from $2,000 to $4,000; 9.4 percent owed between $4,000 and $8,000, and 8.7 percent owed $8,000 or more.

One reason why insurance may not cover very much is that 7.2 percent of Californians are in high-deductible plans, including 38 percent of those who purchase their own insurance. For purposes of the survey, these plans were defined as having deductibles of $1,000 or more for a single person and $2,000 or more for a family. High copayments were another reason for medical debt.

Many people wound up with whopping medical bills because they hadn’t sought care when they needed it. A third of the people with significant medical debt said they had delayed going to see a physician. Only half as many people without debt said they had done that, perhaps because the rest had better insurance.

But the biggest reason why so many insured people in California and across the nation can no longer afford health care is that it simply costs too much. And that is largely because the purpose of much health care, as Maggie Mahar’s new DVD documentary “Money Driven Medicineâ€