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Financial burden of healthcare less in California than other states

March 25, 2010 |  3:32 pm

Californians with health insurance spent a smaller share of their incomes for medical care than insured people in most other states from 2001 to 2006, research concluded Thursday.

Just 12% of those with insurance in the state faced a "high financial burden" for healthcare during that time, meaning they spent more than 10% of family income on insurance premiums and healthcare services, according to a report by the Center for Studying Health System Change.

That put California in the bottom rung of 29 states in the study, which looked at care received by people under age 65.

The 12% figure was the lowest among the states from 2004 to 2006. Arizona, Illinois and Georgia also had low rates during that time.

The study’s author attributed California’s showing to two factors: relatively high household incomes that made healthcare costs less burdensome, and large numbers of people served by health maintenance organizations, which charge lower fees than other traditional insurers but impose more restrictions on care.

"I’m sure there are a lot of people in California who feel the pain from healthcare costs, but relative to other states, California was in pretty good shape," said Peter Cunningham, a senior fellow at the nonpartisan research center in Washington.

"If you were insured in California during the first part of the decade, you spent a lower percentage of your income on healthcare costs than you did in most other states."

The report did not factor in the effects of the recent recession or the impact of national healthcare reform.

It found that a growing percentage of Americans faced burdensome healthcare costs from 2001 to 2006. In 2001, 14% of those with insurance faced high financial burdens. Five years later, that figure climbed to 19%.

Cunningham said that healthcare costs increased more dramatically for people who bought individual insurance policies compared with those who received coverage through their jobs. Prices in individual markets often vary more than in larger group markets because of the smaller size of the insurance pool.

The research pointed out that middle-income and high-income people with private insurance experienced the greatest increase in financial burden over the six-year period. Even though they had more money to spend on medical care initially, medical costs rose faster than their incomes, eating up a larger share of family funds.

— Duke Helfand

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