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A new study out this month in the Annals of Family Medicine highlights the reality facing many people with health insurance and Medicare and their families: high out-of-pocket costs and cost-sharing.  These costs have a considerable effect on their household budgets and decisions about their care.[1]

The study explored the social, medical, financial, and legal consequences insured Americans, including Medicare beneficiaries, face due to high out-of-pocket health expenses. These "life disruptions," as the authors describe them, range from high levels of anxiety and substantial debt to disruptions in needed medical care. Despite having health insurance, participants in the study had medical expenses that exceeded their coverage.

Quotes from Study Participants:
Struggling with High Out-of-Pocket Costs

"That 20% [coinsurance] can kill you."

"…I couldn’t heat the house".

"…it’s going to get harder…we have really great credit. I hate to ruin that, but it looks like it might get ruined if we can’t afford to pay all these high  medical bills."

"[I] wouldn’t go to the doctor unless I just could not stand…the pain."

"It’s scary because when you know you’ve had colon cancer…and you know that every month you put off [going to the doctor]…you’re hurting yourself."

"[My doctor] wanted to start chemo. And…there was no way I could start paying for that. He wasn’t happy about that, but I just don’t have the money."

"I couldn’t take it. I can’t afford it. The copay was even too hard to handle…I said, you know what, I’d rather be sick."


Paying for prescription drugs was a particular problem for study participants.  As the authors note, "seemingly modest coinsurance can require high out-of-pocket spending on expensive pharmaceuticals."  Participants described an array of strategies to cope with their health costs including relying on credit cards, borrowing from family members, and compromising on heating, transportation, and food. Some took out a home equity loan, voluntarily repossessed their car, and moved to lower cost housing or moved in with family members as a result of the burden of their high health costs.

In addition to financial uncertainty and turmoil, participants faced disruptions in their medical care due to costs. Authors found that "costs, rather than unwillingness to comply with recommended treatment, weighted heavily in decisions to delay or avoid recommended care. These self-rationing decisions were often made without a doctor’s input". In addition, participants "reported willingness to suffer to avoid medical expenditures."  Skipping or splitting medications, delaying treatments, and negotiating care with providers were ways participants coped with balancing their health needs and limited finances.

Implications for Policy Proposals

The study takes a critical look at the implications for families who already have no further "skin in the game" to give.  It confirms everyday challenges faced by millions of Americans, including those who rely on Medicare. Though Medicare has increased access to coverage and helped generations of older and disabled Americans get needed care, over time policymakers have sought to reduce the program’s scope of coverage and limit federal liability by shifting costs to beneficiaries. This trend shows no signs of stopping as calls for further cost-shifting to Medicare beneficiaries are proposed in the context of deficit reduction. These proposals include ending "first-dollar" coverage in Medigap plans, which beneficiaries purchase in order to manage and help predict their out-of-pocket costs, as well as raising or implementing new co-pays. Increasing cost-sharing for these families has serious implications for the health and economic status of our communities.

The authors conclude that "as benefit designs require more cost-sharing, many low- and moderate-income patients with chronic conditions will experience the life disruptions…including substantial financial trade-offs with household necessities, stress on familial relationships, and medical non-adherence."  Policymakers should examine these adverse consequences.  In addition to their implications for families, they will also impact long-term health costs for employers, states, and other federal payors.

For more information, contact Policy Associate Xenia Ruiz ( or attorney David Lipschutz ( in the Center for Medicare Advocacy's Washington, DC office at (202) 293-5760.



[1] Frances K. Barg, Carolyn C. Cannuscio, David Grande, Sarah Johnson. Life Disruptions for Midlife and Older Adults with High Out-of-Pocket Health Expenditures. Annals of Family Medicine. January/Feburary 2013. Available at


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