U.S. Underinsured Rate Continues to Increase while Medical Bill Problems Linger

U.S. consumers don’t have the insurance they need, which results in continued problems paying medical bills, medical debt and avoiding necessary healthcare, according to a report from The Commonwealth Fund, “How Well Does Insurance Coverage Protect Consumers from Healthcare Costs?” The report is based on results from The Commonwealth Fund’s 2016 Biennial Health Insurance Survey.

Consumers with all types of health insurance, whether through their employer, individual or marketplace plans or Medicare, can be underinsured. Underinsurance measured by The Commonwealth Fund includes out of pocket costs reported by insured adults over one year, not including premiums, and their health plan deductibles.

Underinsurance means adults’ out of pocket costs exceed household income. Overall, The Commonwealth Fund finds that 28 percent of working-age adults in the U.S. with health insurance in 2016 were underinsured; compared to23 percent in 2014.

“More than half of the underinsured (52 percent) had medical bill problems and 45 percent went without needed healthcare because of cost,” it reports. “For lower-income families, this means spending 5 percent or more of income on healthcare, while for higher-income families it means spending 10 percent or more. While the Affordable Care Act has led to historic gains in coverage, with 20 million fewer people uninsured since the law’s passage, healthcare costs and premiums continue to rise faster than wages. As a result, employers are requiring workers to share a larger proportion of these costs, especially in the form of higher plan deductibles. More than half (56 percent) of the estimated 41 million adults who are underinsured get their coverage through an employer.”

Consumers with low incomes, representing 61 percent of the 41 million underinsured in 2016, were the most likely to lack adequate cost protections, according to the report.

“The growing number of people who are underinsured is concerning, especially because people with the greatest need for affordable healthcare are most likely to be affected—people with low incomes and people with health problems,” said Sara Collins, vice president for Health Care Coverage and Access at The Commonwealth Fund and the report’s lead author in a news release. “People who are underinsured face problems affording healthcare at rates similar to those seen for people with no health insurance at all, and they are almost as likely to skip needed care and to end up in debt when they get sick.”

Additional findings in the report include:

• Higher deductibles are associated with higher medical debt and cause increased rates of underinsurance. Twenty-three percent of adults surveyed with individual and marketplace plans had deductibles totaling 5 percent or more of their income in 2016, compared to 13 percent of consumers with employer plans.
• Among consumers with private coverage insured throughout 2016, two in five (40 percent) with a deductible of $3,000 or more reported they had difficulty paying their medical bills or had accumulated medical debt, compared with 21 percent of those who did not have a deductible.
• Forty-seven percent of underinsured adults with difficulty paying medical bills or medical debt reported they used all their savings to pay those bills.
• Fifty-two percent of underinsured adults surveyed said they have problems paying their medical bills or that they were paying off medical debt in 2016.
• Adults paying off their medical bills over time and with high deductibles also have the most medical debt. Thirty-nine percent of adults with private health insurance and deductibles of $1,000 or more said their medical bills were $4,000 or more.
• Thirty-eight percent of underinsured adults with medical bill problems reported they accumulated credit card debt to pay their bills. And, about 6 percent said they had to declare bankruptcy.

The Commonwealth Fund finds in its research from the biennial survey that several policy options could improve healthcare affordability for consumers, such as, “extending the Affordable Care Act’s cost-sharing reductions to more enrollees, excluding more services from plan deductibles in both marketplace and employer plans, and increasing the required minimum value of employer plans.” The authors of the report on underinsured also say policymakers must address increasing healthcare costs.

“As we move beyond efforts to repeal and replace the Affordable Care Act, it is important to remember that many people, even some with insurance through their employers, still need better access to high-quality, affordable healthcare,” Commonwealth Fund President David Blumenthal said in the news release. “There are several bipartisan policy fixes that could make a huge difference for people struggling to afford the healthcare they need, while also making our health system work better for everyone.”

As healthcare costs continue to grow, insurers and employers tried to manage premium increases through higher deductibles and other cost-sharing plans for consumers, according to the report. “Advocates of this approach argue that with more skin in the game, consumers will help to slow cost growth by choosing more-efficient providers and being more selective in the services they use. But years of experience with high deductible health plans in the U.S. has yielded scant evidence that such a strategy is effective. Instead, as the survey findings indicate, many consumers have responded to higher deductibles by avoiding needed health care and skipping their medications,” it states. The report concludes that despite improvements in coverage since the Affordable Care Act was passed in 2010, barriers preventing consumers from accessing healthcare in a timely manner continue and protections against medical debt are limited. “While these problems continue to be most apparent in the individual insurance market, they are increasing in the employer group market, it states. “Even public insurance programs like Medicare, which covers seniors and disabled people under age 65, leave many struggling to pay for healthcare.”

Source: Pulse December 2017 – Vol. 33 No. 12 acainternational.org