CHICAGO (Reuters) -- Nine out of 10 Americans who tried to buy their own health insurance failed, either because the price was too steep or because they were denied coverage due to a current medical problem, a study said on Thursday.

The findings by the nonprofit research group Commonwealth Fund come as more U.S. employers have stopped offering workers health insurance -- with runaway medical costs the most frequently cited reason.

There were 46.6 million uninsured Americans last year, or nearly 16 percent of the population, according to U.S. Census Bureau figures which represented a slight gain from a year earlier. Among the fastest-growing segments of the newly uninsured were those with jobs.

For employers still providing health insurance, more are promoting higher-deductible plans, which is leading to burdensome medical and credit-card debt, the Commonwealth Fund study found.

"People are being squeezed as employer coverage is either not available or contains very high out-of-pocket costs," said Karen Davis, president of the Commonwealth Fund.

"The alternative of last resort -- to seek individual health insurance -- is not a safe haven," she told Reuters.

For those who need to get health insurance on their own, the high cost is a significant barrier, Commonwealth found.

About 43 percent of those with individual coverage spent more than 5 percent of their income on health premiums, compared to 14 percent insured through employer plans, the study found.

In all, 89 percent of people seeking to buy individual health insurance in the last three years did not do so, the study said.

One in five people were turned down or charged a higher premium for individual insurance because of an existing medical condition. Nearly 60 percent of those who sought individual health insurance did not buy it because they could not afford it.

Researchers polled 1,878 people aged 19 to 64 in telephone interviews from August 2005 through January 2006. The study has a margin of error of 2 percentage points.

The share of U.S. employers offering health insurance has been slipping, according to the Kaiser Family Foundation. Roughly 60 percent offered health coverage during 2005, down from 63 percent in 2004 and 69 percent in 2000.

The high cost of increasingly complex medical technologies and the unchecked use of health services are the two biggest drivers of medical costs and health inflation in the U.S., experts say.

BLUNT INSTRUMENT

In lieu of dropping health coverage altogether, some employers are offering new higher-deductible plans, which are typically paired with tax-favored savings accounts created specifically to pay health expenses.

Proponents call this approach "consumer-directed," because patients have more responsibility for paying costs and have incentives to exert more control over their care.

But the study found that patients with these plans are nearly twice as likely to skip prescriptions or fail to follow up with their doctors than those with traditional insurance.

"The problem is that cost-sharing is a blunt instrument," Davis said. "You pay less, but you get less care. And sometimes it is less essential care."

Workers in high-deductible plans were more than twice as likely to take on credit-card debt to pay medical bills than those in traditional plans, the study said.

Davis said that since employers offer health insurance to attract the best workers, dissatisfaction with the plans will change employer offerings.

"I think the fact that workers don't like these plans is going to dampen the enthusiasm of the employers for offering this coverage," she said.

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By Kim Dixon
 
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