Rising health-care costs are enough to make you sick

May 29 01:00 2014 by ushadmin

One of my best friends, going back to 6th grade, died in April.

He worked as a heavy-equipment mechanic, even as he soldiered through many rounds of exhausting chemotherapy treatments. He remained incredibly strong and fit, mentally and physically. Throughout most of this ordeal, he looked and sounded like he would beat the odds, but he didn’t.

His wife and three school-aged children started packing after his funeral. A long battle with cancer had eaten away their savings. Their home had been foreclosed. They would soon be evicted.

They had medical insurance. They had worked hard all their lives. Friends, family, and co-workers sent them checks and put on a fundraiser, raising tens of thousands of dollars. It would never be enough to keep pace with the mounting medical bills that were not covered by insurance.

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Everyone either knows someone who died like this, or they will soon enough. The American Dream often comes to an abrupt end as soon as someone in the family gets cancer or has a heart attack. Obamacare may have put more Americans on the insurance rolls, but it has not changed this:

“The average American worker is one serious medical event away from financial hardship,” according to a study released Wednesday by Aflac AFL +0.45%

Aflac’s 2014 Aflac WorkForces Report gathered responses from 1,856 company benefits decision-makers and 5,209 employees.

These are the lucky people in America who still have jobs and company-sponsored health-care plans. And here’s their outlook: 66% said they “wouldn’t be able to adjust to the large financial costs associated with a serious injury or illness.”

Most of them come to work with personal financial issues distracting their minds, according to the study, and medical expenses are often why. According to the survey:

• 53% would need to borrow from a 401(k) plan or tap a credit card to pay for unexpected, out-of-pocket medical expenses.

• 49% have less than $1,000 to pay for unexpected, out-of-pocket medical expenses.

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• 27% have less than $500 to pay for unexpected, out-of-pocket medical expenses.

• 13% have been contacted by a collection agency regarding unpaid medical bills.

• 10% said high medical costs have affected their credit scores.

These concerns persist despite out-of-pocket limits established by Obamacare.

The maximum out-of-pocket cost limit can be no more than $6,350 for an individual plan and $12,700 for a family plan in 2014, but this more than what many Americans are prepared to pay. The limit includes deductibles, coinsurance and copays, but it does not include the annual premiums or payments to out-of-network providers that people faced with a life-or-death situation may feel compelled to use.

Health-care insurance is not only inadequate to counter the risks for most working Americans, but the premiums keep rising. Premiums have risen 80% since 2003, according to The Kaiser Family Foundation. Inflation over that time has only risen 27%.

The Kaiser study notes premium increases have moderated, rising only 4% last year, but that’s still more than twice rate of inflation, and it may be because fewer people see medical professionals during recessions and anemic economic recoveries because they can’t even afford the co-pays.