Nearly half of U.S. adults struggle to afford healthcare, research shows

By Eleanor Laise

American consumers are cutting back on food and utilities to pay for medical care

Nearly half of U.S. adults are struggling to cover the cost of prescription drugs and doctor visits, new research shows, marking a new low for healthcare affordability.

A growing share of adults across all age ranges are having trouble covering medical bills, according to the new West Health-Gallup Healthcare Affordability Index – with people age 50 and older seeing the sharpest deterioration in affordability. While the percentage of all U.S. adults who can readily afford quality care dropped 6 percentage points since 2022, to 55%, even steeper declines of about 8 percentage points were reported both for people age 50 to 64 and those 65 and older.

Although U.S. healthcare affordability improved in 2022, according to the index, it’s now “headed in the wrong direction,” Timothy Lash, president of the nonprofit healthcare research and policy group West Health, said in a statement. The West Health-Gallup index was created in 2021 to track the share of people who say they have skipped medical care or the filling of prescriptions in the last three months and whether they can afford any care needed currently.

The index results are just the latest sign of spiraling healthcare costs for Americans. More than 72 million people in the U.S. have skipped needed care in the last three months because of cost concerns, according to a recent West Health-Gallup survey. And commercial healthcare spending growth is set to hit its highest level in 13 years in 2025, according to recent projections from accounting and consulting firm PwC – with medical costs growing 8% in group health plans and 7.5% in individual plans.

Healthcare-industry bellwether UnitedHealth Group Inc. (UNH) – which owns physician groups and a pharmacy-benefit manager, as well as a health insurer and other businesses – on Tuesday reported second-quarter profits of $4.2 billion, despite increasing medical costs.

The new research comes as regulators are working to implement several major provisions of the 2022 Inflation Reduction Act that are designed to dampen healthcare cost increases. The Medicare program, for example, is in the midst of the first round of price negotiations for certain widely used prescription drugs, but the negotiated prices won’t kick in until the start of 2026. A $2,000 cap on out-of-pocket costs in Medicare’s Part D prescription-drug program takes effect next year.

While such provisions may help slow the negative affordability trends, “much more must be done to rein in prices for Americans of all ages,” Lash said. “High prices are one of the biggest impediments to a healthy aging population and a prosperous economy.”

While older adults saw the biggest drop-off in healthcare affordability, younger people are in a more precarious financial position when it comes to medical bills, according to the West Health-Gallup index. One out of 10 people age 18 to 49 are considered “cost desperate” – meaning they were recently unable to pay for care or medicine and lack immediate access to quality care – compared to 3% of people age 65 and older.

Half of all people in the “cost desperate” category have cut back on food in the past 12 months to pay for healthcare, according to the West Health-Gallup research, while more than one in three have cut back on utilities.

Racial and gender gaps in healthcare affordability have also widened, according to the index. Black and Hispanic adults are more likely than white people to fall in the “cost desperate” category, the researchers found, and women are about twice as likely as men to be in that category.

Despite the affordability challenges, patients’ perception of the value they’re getting from their healthcare has improved in recent years, according to the index. Some 36% of U.S. adults said they’re paying too much for the quality of care they receive – down 9 percentage points from three years ago.

-Eleanor Laise

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07-17-24 0734ET

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