Tag Archives: Kaiser Family Foundation

The Big Problem With High Health Care Deductibles

When Bernie Sanders released his long-awaited health care plan last month, it was light on the details. But it did include one major, crowd-pleasing promise: Under his Medicare-for-all proposal, no American would ever have to pay a deductible or co-payment to receive health care again.

Deductibles and other forms of cost-sharing have been creeping up in the United States since the late 1990s. A typical employer health plan now asks an individual to pay more than $1,000 out of pocket before coverage kicks in for most services. The most popular plans on the Affordable Care Act exchanges require customers to pay several times as much. Even Medicare charges deductibles.

People tend to hate these features, but they were not devised to be cruel. Rather, they were fashioned with economic theory in mind

Deductibles and co-payments are intended to make patients behave more like consumers in other parts of the economy. People who have to pay the full cost of magnetic resonance imaging on their knee, for example, might be more likely to shop around and pick the $500 one instead of the $3,000 one. Perhaps, they’ll decide to give their minor knee pain two weeks to see if it gets better on its own, and skip the M.R.I. The hospital offering the $3,000 M.R.I. might lose enough business that it will lower its price.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Average Americans Can’t Afford Insurance Deductibles

Just because you have health insurance doesn’t necessarily mean you can afford all your medical bills, especially if you have a high deductible. So sometimes, it pays to negotiate.

A Commonwealth Fund study released this week found that nearly a quarter of working-age Americans who had health insurance in 2014 were “underinsured.” The report cited rising deductibles — the amount you must pay for care before insurance coverage begins — as a growing factor.

More people than ever before have health plans with deductibles, the report found, and more people have deductibles that are high relative to their incomes. Half of those who were underinsured reported problems paying medical bills or said they were paying off medical debt, the report found.

High deductibles squeeze many families because most Americans lack significant savings to help cover sizable bills. “Most Americans don’t have that much money in the bank,” said Karen Pollitz, a health policy expert with the Kaiser Family Foundation.

So consumers may be interested to know that the amount of a medical bill is not necessarily set in stone, said Erin Singleton, chief of mission delivery for the Patient Advocate Foundation, which assists people with chronic conditions. You can ask whether a discount can be applied, or whether the hospital has funds available for patients with a financial hardship.

Often, people are embarrassed to talk to professionals about discounting their bills, said Martin B. Rosen, a co-founder of Health Advocate, which helps patients with employer-based coverage. But, he said, “There’s no harm in asking” — just be polite.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Small Businesses Sending Employees to The Exchange

Brian Adams, who sells fireplaces in Indianapolis, is like many of the nation’s small-business owners. As the cost of providing health benefits has climbed, he has struggled to afford coverage for his employees — a problem the new health care law was designed, in part, to address.

But a year after the law’s introduction of the insurance exchanges, provisions that were supposed to help small businesses offer employee health benefits are largely seen as a failure. And Mr. Adams, like many of his fellow business owners, is sending employees to the exchanges to buy their own coverage instead.

Nancy Smith, who runs the Great Arizona Puppet Theater in Phoenix, made a similar decision. Her business employs only a handful of people who need insurance, and she was able to offer only plans with high deductibles. She and her employees decided buying individual policies made the most sense.

“Everyone wanted to do it because our costs were too high,” she said.

Most of the focus on the Affordable Care Act has been on whether individuals can find affordable coverage through the online marketplaces. But the law also had the goal of creating a robust insurance market for small businesses by making tax credits available to businesses that provide coverage and creating small-business exchanges where companies could more easily find low-cost plans.

The small-business exchanges were barely functional in most states last year, and it remains to be seen whether the Obama administration will manage to stop the steady decline in the number of employers offering coverage to their workers. The administration is poised to try again when open enrollment begins on Nov. 15.

Federal officials say they do not know how many small businesses signed up for coverage in the small-business exchanges, but the numbers are likely to be very small. In California, for example, only 12,000 people were enrolled through the state’s small-business exchange, compared with more than a million who enrolled as individuals there. To date, few businesses have availed themselves of the tax credits available for purchasing coverage for low-wage workers.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary