Rising healthcare expenses and mounting medical debt continue to threaten the health and financial stability of millions of Americans. Despite widespread insurance coverage, many individuals face significant barriers to accessing affordable care, leading to delayed treatment, worsening health outcomes, and financial hardship. This persistent affordability challenge underscores the urgent need for comprehensive policy reforms aimed at reducing costs and protecting consumers from overwhelming medical bills.
The Scope of Healthcare Affordability Issues
A recent survey conducted by the Commonwealth Fund reveals that a substantial portion of working-age adults find it difficult to pay for their health care, regardless of their insurance status. The survey, which sampled 7,873 adults across the nation, highlights that nearly half of those with employer-sponsored insurance, more than half of those with marketplace or individual plans, and significant numbers of Medicaid and Medicare enrollees report financial struggles related to healthcare costs.
Many insured Americans still delay or skip necessary care because of cost concerns. For instance, 29 percent of those with employer coverage and 37 percent with marketplace plans have postponed treatments or prescription medications due to affordability issues. These delays often lead to health deterioration, with over half of those who delayed care reporting their health worsened as a result. Such findings challenge the assumption that insurance alone guarantees affordable access—cost barriers persist even among the insured, frequently resulting in medical debt that hampers recovery and financial stability.
Moreover, the survey indicates that medical debt is prevalent across all insurance types. Approximately one-third of adults with employer coverage and similar proportions with marketplace plans or Medicare are actively paying off medical bills. The burden of debt influences household decisions, prompting some to cut back on essentials like food and rent or work extra hours to manage their bills. Notably, over 85 percent of those with medical debt owe more than $500, with nearly half carrying balances exceeding $2,000.
Factors Contributing to Cost Barriers
The high costs associated with healthcare services are a primary obstacle to timely care. Even individuals with full-year insurance coverage report difficulties in affording medical expenses, with the survey showing that 43 percent of those in employer plans and 57 percent in marketplace plans struggle to manage costs. Income level plays a significant role; low-income individuals, especially those earning below 200 percent of the federal poverty level, face the highest challenges.
Health status further complicates affordability. Those with chronic conditions or disabilities, particularly under age 65 and eligible for Medicare, often have limited income and higher healthcare needs. Consequently, many find themselves in a cycle of delayed care, worsening health, and increasing debt. Cost-related delays not only worsen health outcomes but also lead to higher long-term expenses, as untreated conditions become more severe.
The financial strain extends beyond individual households. Health care costs can consume a significant portion of monthly budgets, with over half of respondents indicating that their health expenses take up at least 10 percent of their income. This financial squeeze affects their ability to pay for other essentials, such as utilities and groceries, creating a cycle where economic hardship exacerbates health disparities.
The Role of Insurance and Policy Gaps
While insurance coverage is crucial, it does not automatically guarantee affordability. Many Americans with insurance still face high deductibles, copayments, and coinsurance that make accessing care difficult. The survey found that nearly half of marketplace enrollees and a significant share of Medicaid and Medicare beneficiaries delay or skip care due to costs, leading to health deterioration and increased medical debt.
These issues point to systemic gaps in the current healthcare framework. For example, the complexity of billing and the prevalence of surprise out-of-network charges contribute to unexpected bills. Additionally, the structure of insurance plans often leaves many exposed to high out-of-pocket costs, especially for chronic illnesses and emergency care. These challenges highlight the need for policy interventions that go beyond expanding coverage to also address cost containment and consumer protections.
Policy Strategies to Improve Affordability
Addressing the affordability crisis requires a multi-faceted approach, involving federal, state, and private sector initiatives. Several policies could significantly reduce financial barriers and improve health outcomes:
For All Insurance Types
- Strengthen protections against medical debt by banning aggressive collection tactics and ensuring transparent billing practices. The Biden administration’s efforts to remove medical debt information from credit reports are steps in this direction. Increasing access to financial assistance and establishing grace periods for debt repayment can also help buffer consumers from financial ruin.
- Implement measures to slow the growth of healthcare costs, which largely stem from high provider prices and pharmaceutical expenses. Public plan options and leverage of purchasing power can curb rising prices, making care more affordable across the board.
Employer-Sponsored Insurance
- Modify premium contributions and cost-sharing based on employees’ income levels. States like Rhode Island have experimented with regulating premiums to prevent the financial burden on low-wage workers. Reforms to federal laws such as ERISA could also enhance oversight of self-insured employer plans, which cover the majority of workers.
- Expand employer-based programs that reduce premiums and out-of-pocket costs for lower-income employees, fostering more equitable access to affordable care.
Marketplace and Individual Plans
- Extend the enhanced premium subsidies introduced under the ACA beyond 2025 to maintain lower household costs and high enrollment rates. Policies that lower deductibles and out-of-pocket expenses—such as broadening cost-sharing reductions and shifting to plans with more comprehensive coverage—can substantially decrease financial barriers.
- Standardize benefit designs to include zero copayments for primary care visits and ensure narrow provider networks still offer broad access to necessary services, reducing surprise bills and out-of-network charges.
Medicaid Expansion and Improvement
- Limit or eliminate cost-sharing requirements for low-income populations to prevent dissuasion from seeking timely care. Expanding scope to include optional services like adult dental and vision can address unmet needs, reducing long-term costs.
- Expand Medicaid managed care networks and clarify access rules for essential medications, ensuring enrollees receive necessary treatments without prohibitive out-of-pocket costs.
- Increase allowances for long-term care recipients and shorten spend-down periods to reduce financial hardship among vulnerable populations.
Under Age 65 Medicare Recipients
- Improve awareness and enrollment support for programs like Medicare Savings and Part D Low-Income Subsidies, making healthcare more accessible for younger beneficiaries with disabilities.
- Enhance coordination between Medicare and Medicaid to lower out-of-pocket costs and streamline coverage.
For Uninsured Populations
- Maintain continuous Medicaid eligibility during eligibility redeterminations to prevent coverage gaps. Implement autoenrollment mechanisms that allow eligible individuals to automatically receive coverage, moving toward universal access.
- Address the coverage gap in states that have not expanded Medicaid by providing federal fallback options, ensuring that no low-income individual remains uninsured due to state policy choices.
Moving Toward a More Equitable Healthcare System
The findings from the 2023 survey underscore that insurance coverage alone does not suffice to guarantee affordable healthcare. Significant reform efforts are needed to control costs, protect consumers, and eliminate the financial barriers that prevent many from receiving necessary care. Governments at all levels can adopt targeted policies—such as regulating provider prices, expanding coverage options, and strengthening consumer protections—to make healthcare accessible and affordable for everyone.
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