By Emma Court , MARKETWATCH.COM
Published: Mar 24, 2017 8:27 a.m. ET
Unexpected medical bills that cost more than $100 would be unaffordable for more than a third of Americans, according to a new survey.
House Oversight Committee Chairman Jason Chaffetz faced immediate ridicule early this month after he said that Americans should forego their iPhones to afford health insurance. Critics rushed to point out that the about $700 cost of an iPhone comes nowhere near the average annual cost of health-care spending, or about $10,000 per person.
As if to drive home that point, a new survey shows that Americans have trouble affording most unexpected medical bills, even in smaller amounts. For a majority, or 52%, an unexpected medical bill that cost more than $500 would be out of reach. And unexpected medical bills that cost more than $100 would be unaffordable for 37%, or more than a third, of Americans, the survey, released Tuesday, found.
As might be expected, larger medical bills are even more difficult: 77% said they wouldn’t be able to cover an unexpected expense above $2,000, according to the survey, conducted by research firm Ipsos for the health care startup Amino. The research polled about 1,000 adults in late February and has a margin of error of plus or minus 3.5 percentage points.
The findings speak to a larger issue: Most Americans have little in savings, which becomes especially problematic when or if an emergency situation arises. The survey also found that a majority — 54% — don’t budget more than $50 a month for health care expenses, though about 46% said they did. In contrast, a larger percentage of those surveyed said they budgeted more than $50 a month for food (79%), transportation (59%) and debt payments (49%).
Part of the difficulty of budgeting for health-care expenses, of course, lies in their unpredictability. Not only is it hard to know when you’ll get sick or hurt, but figuring out how much recovery will cost can be difficult.
Another problem: It’s hard to budget when you don’t know the size of the expense you’re facing and/or your estimates are wildly off-base. In the Amino/Ipsos survey, only 7% of those asked to estimate the cost of fixing a broken arm settled on the correct amount. About 46% of those surveyed guessed it would be less than $500; the median cost for patients and health insurers combined is about $1,100, the survey said.
But increasingly, Americans are getting exposed to high out-of-pocket health-care costs, as high-deductible health plans are offered by more employers and increase in popularity. Health savings accounts, which accompany high-deductible health plans, are a key part of Republican plans for the repeal and replacement of the Affordable Care Act.