Medical costs taking bigger bite of Arkansans

WASHINGTON - A growing number of Arkansans will spend larger chunks of their wages on health costs in 2008, according to a report released Thursday by an advocacy group that said it shows medical care is becoming unaffordable even for families with insurance.

Families USA, a nonpartisan consumer health group, estimates one in 10 Arkansans, or 227,000 people under the age of 65, belong to families that will spend more than a quarter of their income on out-of -pocket health costs including insurance premiums.

By comparison, in 2000 only 6.2 percent of Arkansans belonged in families that spent that much, the group said.

"If this troubling trend continues, the health care affordability crisis will get much worse, and many more Arkansans will become uninsured and underinsured," said Ron Pollack, executive director of Families USA, said during a telephone news conference.

Two Democrats who represent Arkansas in Congress said the study underscores the need for lawmakers to pass bills that expand insurance coverage for families and reform the insurance industry.

Rep. Marion Berry, D-Gillett, said solutions may have to wait until after next year's elections.

"The good news is we know how to solve (the problems)," Berry said. "I think we need a new Congress and a new president, but we can do that."

In another indicator of the growing bite of medical care, the Families USA study indicated as many as 680,000 Arkansans - or about 28 percent - belong to families that will spend over 10 percent of their pre-tax income next year. In 2000, that percentage was 19.3 percent.

Pollack said 75 to 80 percent of Arkansans are covered by health insurance but coverage sometimes is insufficient.

"The high health care costs faced by families are a clear indication that insurance simply no longer offers the protection that America's families need," Pollack said.

Paying for health care by credit card has become increasingly common, according to the study. Data show that more than 25 percent of people with insurance report having trouble paying their medical bills or are in the process of repaying medical debt.

The soaring costs are prompted by a number of factors, the study said. Health insurance premiums are rising, forcing some employers to drop coverage or increase the share of the premium employees must pay. Some employers offer insurance that covers fewer services or requires high out-of-pocket costs, the study found.

The report cites insurance company mergers as another cause for high costs. An American Medical Association study cited by Families USA lists Blue Cross Blue Shield as having an average market share of 79 percent in the more densely populated areas of Arkansas.

"We need to change the way insurance companies offer plans and are allowed to operate so that they don't game the system the way they do now," said Berry, who took part in the news conference.

Sen. Blanche Lincoln, D-Ark., also participated. She said the study illustrated the need for Congress to expand the State Children's Health Insurance Program, or SCHIP, to cover more families.

"One of the things we can do is pass (SCHIP) which provides funding for kids in Arkansas." She said. "Some of the families in the report are lower to middle income, SCHIP would increase their access to health care."

The Families USA study was part of a state-by-state series. Estimates were based on a statistical model by the Lewin Group of Virginia and data from the federal census and U.S. Department of Health and Human Services.

Jason Wiest of the Arkansas News Bureau in Little Rock contributed to this report