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Rising medical costs present a particular challenge for the nation. A fairly new national study written by Peter J. Cunningham for the Center for Studying Health System Change (HSC), entitled “Trade-Offs Getting Tougher: Problems Paying Medical Bills Increase for U.S. Families, 2003-2007,” reveals that about 57 million Americans were in families with problems paying medical bills in 2007—an increase of 14 million people since 2003. Problems paying medical bills increased for both nonelderly insured and uninsured people. Although the rate of medical bill problems is much higher for uninsured people, most people with medical bill problems—42.5 million—had insurance coverage. About 2.2 million people with medical bill problems were in families that filed for bankruptcy as a result of their medical bills, and a much larger number reported other financial consequences, such as problems paying for other necessities and having to borrow money. The increase in medical bill problems—especially among insured people—is the main reason why more people reported unmet medical needs because of cost in 2007 than in 2003.

The following selected bullets gathered from an August 2007 Primer on Health Care costs published by the Henry J. Kaiser Family Foundation outline the issue succinctly:

How Much Does the U.S. Spend on Health and How Has it Changed? The U.S. spends over $6,500 per person on health care each year. Sixteen percent of the U.S. economy is devoted to health care. Health care spending is consuming an increasing share of economic activity over time and has exceeded economic growths in every recent decade.

How Does U.S. Health Spending Compare with Other Countries? The U.S. spends substantially more on health care than other developed countries. As of 2004, health spending in the U.S. was about 90% higher than in many other industrialized countries.

How Does Health Care Spending Vary by Person? A small share of people account for a significant share of expenses in any year. In 2004, almost half of all health care spending was used to treat just 5% of the population. Health care spending also varies by factors such as age and sex. Adults aged 65 and older have the highest health care spending, averaging $8,647 per person in 2004.

What Do Health Expenditures Pay for and Who Pays for Them? Most health care spending is for care provided by hospitals and physicians. Private funds pay for about 55% of total spending.

How Do Health Care Costs Impact Families and Employers? Health insurance premium increases consistently outpace inflation and the growth in workers’ earnings. While about 26% of the poor spent more than 10% of their incomes on health in 1996, the number increased to 33% by 2003. Moreover, eligibility standards for public programs such as Medicaid and SCHIP do not keep pace with rapid increases in the cost of health coverage.

What Can Be Done to Address Rising Costs? Some approaches for dealing with the health care costs may reduce the level of spending but not the rate of growth. Policies focusing on new and expanding technologies may have success in reducing the rate of growth, but can be difficult to implement.

In addition to rising costs, information provided by FamiliesUSA shows that persons of color disproportionately are uninsured. Please see the charts below.