A new report from the U.S. Department of Health and Human Services shows that few families without health insurance have the financial resources to pay for hospital bills.
According to the HHS, on average, uninsured families can only afford to pay for 12 percent of hospital stays, and even those uninsured with higher incomes are unable to pay for most potential hospital stays.
Hospital stays for which the uninsured can't pay in full account for 95 percent of the total amount that hospitals bill the uninsured. According to some estimates, the amount of unpaid bills is as high as $73 billion annually, and is ultimately passed on to people with insurance and their employers.
"One of the most enduring myths in American healthcare is that people without health insurance can get care with little or no problem. Nothing could be farther from the truth," said HHS Secretary Kathleen Sebelius. "The result is families going without care – or facing healthcare bills they can't hope to pay. When the uninsured cannot afford the care they receive, that cost must be absorbed by other payers."
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A significant factor in why the uninsured aren't able to afford hospital stays is a lack of personal savings. According to the HHS, median assets for the uninsured equal only $20, and 89 percent of uninsured families have savings of $300 or less. Even among uninsured families with higher incomes – at 400 percent of the federal poverty level, or $89,400 per year – half have assets of less than $4,100.
Of the more than 2.1 million hospitalizations in 2008, 77 percent had bills totaling more than $5,000 and 58 percent – or 1.2 million – had total bills exceeding $10,000.
"Health insurance is critical in helping protect families from unexpected hospital costs," said Sherry Glied, assistant secretary for planning and evaluation for the HHS. "This report shows that even higher-income uninsured families are struggling to meet the high costs of healthcare. No family should bear the burden of being one illness or accident away from bankruptcy."
The report concludes that a lack of health insurance poses a greater financial risk to families than a lack of either auto or homeowner's insurance. While people are 50 percent more likely to have a car accident than to be hospitalized in any given year, hospital bills average more than two-and-a-half times that of the cost of an average auto accident.
Likewise, while the average loss for a house fire is roughly the same as an average hospital visit, a person is 10 times more likely to be hospitalized than to experience a house fire.