Health Care » Affordability

Women are more likely to own or work for the smallest businesses, which struggle to provide health insurance coverage to employees.

The high cost of health care is a huge problem for women, who are more likely to need and use services but often have less ability to pay. This is because, on average women have lower incomes than men, and a greater share of their income is consumed by out-of pocket health care costs.

Over the past nine years, health insurance premiums have more than doubled, increasing four times faster than wages. In the past year alone, health care costs for a typical American family of four have increased by 7.4 percent from $15,609 to $16,771.

These high costs price many women out of the insurance market completely. Because women are twice as likely as men to be covered as dependents, the high cost of family coverage relative to single coverage threatens their and their children’s access to insurance.

Continuing escalation of health care costs is not sustainable. Women and families are already overburdened. The high cost of health care not only cuts into their disposable income and increases their debt, but in many cases it makes it all but impossible for women to afford basic necessities such as food and rent.

From 2001 to 2007, the percentage of women making less than $20,000 per year who spent at least a tenth of their income on health care rose dramatically from 29 percent to 55 percent.

Women earning more did not fare much better over this time period 41 percent of women making between $35,000 and $60,000 per year reported having high out-of-pocket costs in 2007, up from 21 percent in 2001.

Paying for care is most difficult for adult women under age 50, likely because they are responsible for medical costs for both themselves and their children.

Even though plans with lower premiums seem affordable, their high cost sharing puts women and families at risk because the costs can skyrocket if someone falls ill. As a recent Georgetown University Health Policy Institute report points out, “over 18 months of active treatment, a breast cancer patient might have as many as 140 doctor and other treatment visits and require up to 40 prescription refills. If a co-pay of $25 applied for each, her expenses due to co-pays alone would be $4,500.”

Our Recommendations

To address cost and affordability, the federal government must provide meaningful financial assistance in the form of substantial tax credits or direct subsidies to low- and middle-income families to help them purchase coverage. The government should also establish out-of-pocket payment caps based on individual or family income.

This cap should cover premiums and all cost sharing, including co-payments and deductibles. And each family’s annual out-of-pocket costs should be capped on a sliding scale, with no family being asked to pay more than 10 percent of their income for coverage.

In order to help those most in need, Medicaid eligibility should be expanded to a national “floor” of at least 150 percent of the Federal Poverty Level (FPL).

Medicaid is a particularly vital source of care for women of reproductive age. In 2006, 7.3 million women of reproductive age relied on Medicaid for their health coverage, including 37 percent of those with family incomes below the federal poverty level.9 Households headed by single women struggle financially more than households headed by single men; almost twice as many households headed by a single female (46 percent compared to 25 percent) are below 150 percent of the FPL.10 Low-income individuals are best served in the Medicaid program because of its comprehensive benefits and strong cost sharing protections. Medicaid eligibility must also be extended to low-income adults without children. These individuals include some of our most vulnerable citizens, often with severe cognitive limitations and significant chronic health challenges. Further, individual mandates should not be put into effect until after all federal rating rules, financial assistance and employer mandates are fully implemented. Penalty structures to enforce adherence to mandates must be progressive, so that lower income people are assessed a lower proportionate penalty. If penalties are pegged to premium amounts, it would not be fair to charge people higher penalties for failure to purchase coverage simply because of their age or other characteristics (i.e., tobacco use). Individuals who are exempt from the penalty because of hardship or other factors should receive proactive assistance in order to access affordable, meaningful coverage.

The federal government, in partnership with the states, will need a long-term, nationwide consumer education campaign prior to mandating that everyone purchase coverage. This public education must include what each individual should do in order to comply with the mandate and the range of resources available to help people access affordable coverage.

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(This information and more is included in our detailed report, Health Care Reform: What Women Need.)