Americans are skipping some types of medical care because it's so expensive, according to a recent Federal Reserve report.
The Fed's "Economic Well-Being of U.S. Households," 28% of respondents had to forego some form of medical care in 2022 because of the high costs involved, marking a 4 percentage-point increase from the previous year.
Among the medical services that were frequently skipped, dental care topped the list, followed by doctor's visits, prescription medication, follow-up appointments and mental healthcare or counseling. In its annual report, the Federal Reserve noted that this increase in people foregoing medical care may partly be attributed to inflationary pressures, as they look for ways to cut back on expenses.
As of June 2021, American consumers were burdened with approximately $88 billion in medical debt, according to the Consumer Financial Protection Bureau (CFPB). More than 40% of the population is grappling with some form of medical debt, which can arise from unforeseen medical events, unexpected bills and out-of-pocket costs.
Out-of-pocket expenses keep getting more expensive, with people spending an average of $1,315 each in 2021. For those with employer-sponsored insurance, the average deductible for individuals has surged by over 57% since 2013, while the average family deductible has risen by more than 55%.
The Federal Reserve survey also reveals that 23% of adults experienced significant and unexpected medical expenses in the past year, with the median cost ranging between $1,000 and $1,999.
Sixteen percent of adults reported having medical debt either from their own care or that of a family member.
"The whole healthcare financing system is broken," Eva Stahl, vice president of public policy at RIP Medical Debt, said in an interview with Yahoo! Finance. Stahl emphasized that this issue is multifaceted, with health insurance failing to meet people's needs, rendering them unable to bear the burden of medical bills. The exorbitant amounts patients are asked to pay discourage them from seeking care altogether.
The findings of the Federal Reserve's survey seem to support Stahl's assessment. Among respondents with a family income below $25,000, 38% had to defer medical care because of financial constraints, in stark contrast to the 11% of adults earning $100,000 or more.
Uninsured people, constituting approximately 8% of U.S. adults, also faced significant hurdles. A striking 42% of uninsured individuals delayed medical treatment because of cost, while 26% of insured individuals encountered the same predicament.
Making A Change
While the current picture is drab, there are a number of companies fighting back against rising healthcare costs. For example, Mark Cuban's Cost Plus Drugs Co. has been growing in popularity as the billionaire looks to reduce prescription drug pricing. Similarly, Amazon.com, Inc. (NASDAQ: AMZN) rolled out Amazon Pharmacy allowing Prime members to get all of their prescription costs sent to them on a subscription model with free delivery every month for just a few dollars. Retail investors have similarly begun investing in innovative healthcare startups.