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Why Middle Class Americans Need Health Reform

Introduction

Middle class Americans across the country are demanding health reform. Businesses and 

families are struggling under the increasing financial burden of rising health care costs, and even 

middle class Americans with health insurance are struggling as their out of pocket health care 

costs continue to rise. Some employers are facing a decision between scaling back on coverage 

and laying off workers, and many—especially small businesses—are dropping coverage 

altogether. Middle class families often find themselves without adequate protection against a 

major illness and have difficulty obtaining the care they need, and an increasing number are now

uninsured. Even among those able to get insurance through their job, middle class Americans 

are less likely to have a choice in their plan or provider compared to higher-income workers. 

This report highlights the struggles that middle class Americans face in the current health care 

system. By examining cost, coverage, access, and choice, this report shows how the current 

system has failed the middle class and why we must enact health reform this year.

Rising Financial Burden 

Middle class Americans and their families are facing escalating financial burdens from health 

care costs.

On average, middle class families with private health insurance spend $4,400 a year on 

health insurance premiums, deductibles, and copayments, or 9% of their household 

income.1

Compared with higher-income Americans, middle class Americans are more likely to 

face a high financial burden from these out of pocket health care costs. In fact, 22 

percent of middle class Americans with private health insurance are in households that 

spend more than 10 percent of their income on health care, compared with 8 percent of 

higher-income Americans.2

This burden is growing over time. From 2001 to 2006, the percentage of privately 

insured middle class Americans facing a high financial burden from health care costs 

increased from 14 percent to 22 percent.3
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The burden is also worse for middle class Americans purchasing health insurance directly 

from the individual insurance market. A middle class family with individual coverage 

spends on average 22 percent of household income on health care – and some spend up to 

50 percent. A similar middle class family with employer based coverage spends an 

average of 8 percent of their income on health care costs.4

Diminishing Coverage

Middle class Americans and their families are facing a growing challenge in obtaining or 

maintaining their health insurance coverage. 

Over a quarter of the uninsured are middle class Americans.5

The number of non-elderly middle class Americans who are uninsured has grown over 

time, from 11.1 million in 2001 to 12.5 million in 2007.

6

 Looking forward, without 

health reform, the number of middle class Americans without health insurance could be

as high as 18.2 million in 2019.7

In part, high rates of the uninsured among middle class Americans arise because middle 

income workers have a higher chance of not being offered health insurance through their 

job. In fact, of the 10.7 million non-elderly adults in the middle class bracket who are 

uninsured, nearly 90 percent are employed.8

Nearly one in four middle class employees are not offered health insurance by their 

employers – and of those that are not, more than half remain uninsured. In comparison, 

only one in six high-income employees are not offered health insurance by their 

employers.9

Part of the reason that middle income Americans are less likely to be offered coverage is 

because they are more likely to work in small businesses – 53 percent of middle income 

Americans work in small businesses, compared with 46 percent of higher income 

Americans. Of those who work in small business, 40 percent are not offered insurance.10

Reduced Access to Care

Shrinking coverage and rising costs mean middle class Americans are finding it difficult to 

obtain the care they need.

Eleven percent of middle class adults reported delaying needed care and 8 percent

reported avoiding care altogether because of high cost in 2007.11

Middle class adults are also more likely to avoid care because of rising costs compared to 

higher-income adults, where only 5 percent reported delaying and 3 percent reported 

avoiding needed care.

12
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The problem is particularly worse for those middle class adults who are uninsured, where 

more than one in five delayed or avoided needed care because of cost in 2007.13

Regular visits to the pediatrician are important for healthy child development, and yet too 

many middle class children do not see a physician regularly. Twelve percent of middle 

class children did not have a health care visit in the past year, compared to 8 percent of 

high-income children.14

Lack of Choice

Even among those able to get insurance through their job, middle class Americans are less likely 

to have a choice in their plan or provider compared to higher-income workers. 

Forty percent of middle class workers are given a choice of health plans through their job, 

compared with 52 percent of higher-income workers.15

Middle class Americans are more likely to need a referral to see a specialist, more likely 

to have to select their doctor from a list given by their health plan, and less likely to be 

able to get health care coverage if they go outside of that network than higher income 

Americans.16

The Need for Health Reform

Rising costs, rising rates of uninsured, and reduced access to care all demonstrate that the current 

health care system does not work for middle class families. Health reform is needed to ensure 

high-quality care is accessible for all Americans.

Sources

Prepared by Kurt Herzer and Meena Seshamani, MD, PhD, Office of Health Reform, 

Department of Health and Human Services

Data analysis provided by the Center for Disease Control and Prevention’s National Center for 

Health Statistics, the Office of the Assistant Secretary for Planning and Evaluation, and the 

Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, 

Department of Health and Human Services

 

1 Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure 

Panel Survey, 2006.

2 Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure 

Panel Survey, 2006.

3 Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure 

Panel Survey, 2001-2006.

4 Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure 

Panel Survey, 2003-2006.

5 Current Population Survey, 2007.
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6 Current Population Survey, 2001-2007.

7 Holahan J, Garrett B, Headen I, et al. Health Reform: The Cost of Failure. The Urban Institute and Robert Wood 

Johnson Foundation: May 21, 2009. Available at http://www.rwjf.org/files/research/costoffailure20090529.pdf

8 Current Population Survey, 2007.

9 Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure 

Panel Survey, 2006.

10 Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure

Panel Survey, 2006.

11 Unpublished data from the National Center for Health Statistics and the Center for Disease Control and 

Prevention, 1997-2007.

12 Unpublished data from the National Center for Health Statistics and the Center for Disease Control and 

Prevention, 2007.

13 Unpublished data from the National Center for Health Statistics and the Center for Disease Control and 

Prevention, 2007.

14 Unpublished data from the National Center for Health Statistics and the Center for Disease Control and 

Prevention, 2007.

15 Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure 

Panel Survey, 2006.

16 Unpublished data from the National Center for Health Statistics and the Center for Disease Control and 

Prevention, 2007.