Health and Science

High deductibles put big strain on 'underinsured'

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Being insured doesn't necessarily mean feeling secure.

Rising deductibles are becoming a larger factor in the phenomenon of people being "underinsured"—meaning that although they have health coverage, they still pay a significant amount of their income out of pocket to cover medical bills, a new report found. (Tweet This)

The Commonwealth Fund research, which found that 31 million Americans were underinsured, comes amid a growing trend of insured people directly bearing a greater share of health-care costs. Deductibles are the money that must be paid by an insured person for medical care, and are independent of the monthly premiums they pay for job-based insurance or individual health plans.

Nearly half the people surveyed for the report said they had used up all of their savings to pay medical bills.

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"The financial and health insecurity that comes from being underinsured is substantial and puts people's health and well-being at risk," said Dr. David Blumenthal, president of The Commonwealth Fund nonpartisan research foundation.

"If health insurance costs continue to be shifted to consumers at the rates we have seen over the past 10 years, the problem will likely grow."

The report, conducted every two years, defines being underinsured as having health coverage throughout the year but having out-of-pocket health costs that are 10 percent or more of household income. That bar is lowered to 5 percent or more of household income for low-income families. Having a deductible that exceeds 5 percent of income also qualifies one as being underinsured.

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"Someone who is underinsured does have health insurance, but with coverage that does not protect against high health costs relative to income," Blumenthal said.

The report noted that the share of people who were underinsured because they had high-deductible health plans has more than tripled from 2003, when it was 2 million people, to 7 million people last year. Though there is sometimes a tendency for people to choose low-premium plans with high deductibles, "that may not tend to be a wise choice in all cases," Blumenthal said.

The research, which was primarily based on a survey of more than 3,000 adults, found that there was no significant change in the total number of people who are underinsured since 2010. But the current underinsured rate, of 23 percent of adults ages 19 to 64, is still sharply higher than the 12 percent of such people who were underinsured in 2003, according to the report.

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Blumenthal noted that while recent years have seen a marked slowdown in the increase in health-care costs, the rate of underinsurance could grow if those costs accelerate.

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Employeess of small firms were the most at risk of being underinsured, according to the report. People who are on Medicaid, the government-run health coverage program for the poor or disabled, are also at higher risk, the report found.

The consequences of being underinsured can be serious, said Sara Collins, a vice president of The Commonwealth Fund and the report's author.

"People with high deductibles do tend to skimp on health care," Collins said, noting that 44 percent of the survey's respondents said they had either not gone to the doctor when they were ill, did not fill a prescription, or missed a test or medical visit.

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"It may be that people are responding to high deductibles by cutting back on spending."

In addition to the fact that 47 percent of people surveyed used up their savings to pay health bills, another 34 percent took on credit card debt to pay those bills. Nine percent took out a mortgage or a loan to foot their bills, and 7 percent declared bankruptcy.

Collins noted that the report did not measure the impact of the Affordable Care Act, or Obamacare, on the underinsured rate. That's because people insured all year in the survey had coverage that predated Obamacare's major coverage expansion efforts, including the sale of insurance plans on government-run marketplaces.