A new Consumer Reports study identifies the underinsured -- accounting for 24% of the U.S. population -- living with skeletal health insurance that barely covers their medical needs and leaves them unprepared to pay for major medical expenses.

Forty-nine percent of people overall, and 43 percent of people with insurance said they were somewhat to completely unprepared to cope with a costly medical emergency over the coming year.

Some 16 percent had no health plan at all, including many working respondents whose jobs didnt offer insurance or who couldnt afford the premiums of deductibles of the available plan.

When added to the population of uninsured -- approximately 16% of the population -- a total of 40% of Americans ages 18-64 have, at best, inadequate access to health care. The report, published in the September issue, also finds that most employers are struggling to keep up while the insurance behemoths prosper from the misery.

In the first of a series of reports on Americas health care crisis, CR paints a profile of the underinsured, explains what it means to be insured but not adequately covered, and tells of the costs and consequences for everyone, including people who are currently well insured.

The report is based on a survey conducted by the Consumer Reports National Research Center in May 2007, which sampled 2,905 Americans between ages 18 and 64. The survey found evidence of increasing frailty in the U.S. system of health insurance on almost all fronts.

Insured But Not Covered

People falling into the underinsured category have two or more of the following complaints about their health plans: It does not adequately cover costs of prescription drugs; doctor visits; medical tests; surgery or other medical procedures; catastrophic medical conditions; or the deductible is too high.

In the survey, the median household income of respondents who were underinsured was $58,950, well above the U.S. median. Twenty-two percent live in households making more than $100,000. Still, many of the underinsured dont have the resources to keep up with the rising costs of deductibles and co-pays, so much so that 43% reported that they postponed going to the doctor because they couldnt afford it.

Employers Struggle, Insurers Prosper

Because of the way health insurance works, insurers havent been paying much of a penalty for failing to contain costs. Insurers typically keep around 15 and 25 percent of the premiums they collect. As noted in the CR investigation, the nations six biggest private health insurers collectively earned nearly $11 billion in profits in 2006.

Employers are struggling to keep up: in the past five years, insurance premiums have risen three times as fast as inflation. While employers by and large have not asked employees to pay a bigger share of the overall premium, employees are still paying rising premiums.

In 2000, the average employee contribution for family coverage was $135 per month and in 2006 it was $248. People who work for small companies bear the biggest brunt because those companies have fewer employees over which to spread medical risk. And lower paid workers also get hit hard because premiums and co-pays typically cost the same for everyone, regardless of income.

Solution?

Some promising approaches have already gained traction at the state level. Maine, Massachusetts, and Vermont have already passed laws aimed at providing health insurance to everyone, with help for people who dont get it through their jobs and cant afford to buy on their own.

Many other states are considering similar laws, and presidential candidates have put forth a variety of proposals to broaden coverage.