health insurance deductibles = functionally uninsured

recent analyses have found that a very large number of employed Americans are in desperate financial straits and the dramatically increasing deductibles from their employer-sponsored health insurance has made them functionally uninsured. These reports have somewhat different numbers from their surveys, but the gist is pretty clear….

1. the LA Times has been doing an extensive story on the issue of high deductible health plans, that they effectively deny health care access to large groups of people, replete with poignant individual stories (see https://www.latimes.com/politics/la-na-pol-health-insurance-medical-bills-20190502-story.html ). some points:

--In the past 12 years, annual deductibles in job-based health plans have quadrupled and now average more than $1300 a year

    -- the average deductible was $379 in 2006 adjusted for inflation, $1350 in 2018

    -- 4 in 10 workers have at least $1500 deductible (the threshold that the KFF poll below used as a high-deductible plan), typically meaning that the worker is responsible for the first $1500 prior to insurance kicking in (though they still have copayments, which have also been increasing a lot)

    -- and, at the same time, insurance premiums have increased at more than double the rate of inflation, outpacing wage gains

-- one quarter of working age adults with employer-based insurance are going without vacations or major purchases to pay for healthcare; a quarter have decreased spending on clothing and basic household goods

-- half of respondants said costs have led to delaying doctor appointments or not filling prescriptions

-- an American Cancer Society study found that 56% of all US adults had problems paying medical bills, delayed care, or worried about affording care

-- and, more Americans with health coverage are approaching charities and crowdfunding sites to defray costs

2. The Kaiser Family Foundation (KFF)/LA Times Survey of Adults with Employer-Sponsored Health Insurance (see http://files.kff.org/attachment/Report-KFF-LA-Times-Survey-of-Adults-with-Employer-Sponsored-Health-Insurance ):

-- as a perspective, the number of people in the US covered by employer-sponsored health insurance far exceeds those covered in the individual market or government programs. and this is much more than the number of people who got health insurance from the Affordable Care Act (aka Obamacare) in 2010

-- 4 in 10 state their family has had problems paying medical bills or difficulty affording premiums or out-of-pocket medical expenses

-- half say someone in their house will skip or postpone some type of medical care or prescription because of cost

-- 17% said they made difficult sacrifices to pay for healthcare or insurance costs

-- in 2016, half of single households and 6 in 10 multiperson households had only $2000 in available savings, including cash, nonretirement stocks, mutual funds, and other liquid assets

-- over half of those with the highest deductible plans (at least $3000 for an individual or $5000 for family) say that the deductible amount is more than their accessible savings.

-- 54% of those with employer-sponsored coverage said that someone covered in their plan had some chronic conditions, half of this group reported the family had problems paying medical bills or difficulty affording premiums or out-of-pocket costs.

-- Three quarters of those in the highest deductible plans with a family member with a chronic condition say that someone in the family has skipped or delayed some type of medical care or drugs because of cost

-- health insurance decision-making has changed: now 6 in 10 people chose their plan by cost factors (low premiums, deductibles, co-pays) while one quarter for coverage related factors (choice of providers or range of covered benefits). This is the inverse of what a 2003 survey found  [ie, it is a fallacy to assume that it is their own fault that patients didn’t have a plan that included important covered benefits]

-- one touted benefit for the high cost of health insurance now is that people would engage in more cost-conscious healthcare shopping.  47% did ask for generic vs brand name drugs. But only 17% shopped around for different providers to find the best price for medical service and 9% tried to negotiate with the provider for a lower price  {i.e. This does not happen much]

-- And, there is a real lack of access to cost information, a barrier for individuals to engage in cost-conscious decisions. Two-thirds stated that it was difficult to find how much medical treatments and procedures cost them, and more than 4 in 10 had difficulty understanding how much they would have to pay out-of-pocket for their care [and we clinicians have a hard enough time finding out the actual costs individual patients with their health insurance need to pay for meds, procedures, etc]

3. the Center for Financial Services Innovation (see https://cfsinnovation.org/u-s-financial-health-pulse/  , or https://s3.amazonaws.com/cfsi-innovation-files-2018/wp-content/uploads/2019/03/06213859/Pulse_Baseline_SurveyResults-jan2019-WEB-rev-1.pdf ), which tracks consumer financial health, reported:

--47% of Americans spend more than or equal to their income

--40% of Americans do not have the funds to cover a $400 emergency expense without borrowing or selling something

--42% have no retirement savings

--81% experience some stress related to finances

--issues include lack of stable employment (especially those making $30-60,000), racism (Black and Hispanic Americans are particularly affected), unpredictable income, employer-dependent schedules 

Commentary:

-- lots of numbers above. the bottom line here is one increasingly important deficiency of our employer-based health insurance system: the rapid acceleration of high-deductible plans (requiring large amounts of out-of-pocket payments before their insurance kicks in), which, compounded by major increases in health insurance premiums, has left many people effectively without health insurance or receiving suboptimal care.  This issue of deductibles has largely been under the radar screen (except to the workers affected…)

-- the Affordable Care Act, though it did insure many people, was quite small compared with the numbers of people in employer-based plans who are effectively uninsured.  and the ACA plans also have deductibles, some exorbitantly high

-- employees in many areas have zero input into their health insurance (ie, no choice). their employers may well choose a plan for them, usually based on finding a cheaper plan with decreased employer contributions, and the employees are stuck with high-deductible plans but still pay for a lot of their insurance premium.  i cannot verify, but i did recently hear a presentation noting that about 1/2 of workers change plans every 2 years, based on changing jobs or employers changing the offered plans.  and, one consequence that i see a lot is that some of my long-term patients need to change to a different provider because their company changed their plan.  this is terrible care (it takes a long time for patients/clinicians to really get to know each other and develop a therapeutic relationship, and, ironically, it very probably costs the system much more money when a patient transfers care because of duplication of tests with the new provider, inaccurate transfer of information leading to incorrect assessments/diagnoses/treatments, and loss of the therapeutic benefit of a trusting relationship between the provider and patient)

--and, as collective bargaining has been increasingly marginalized in the workplace, the decisions about changing health insurers, plans, deductibles, etc is largely made just by the employers

--all of this emphasizes the basic absurdity of an employer-based health care insurance system. this not only leads to really expensive care (especially when one adds in all of the out-of-pocket $$ spent) but also increasingly to less actual access to health care, as the deductibles effectively deny care.  (one example, of many, of decreasing access to essential care is the outrageous cost of life-saving insulin leading to unfilled prescriptions, and very likley much more morbidity and mortality over the mid- to long-term.  see http://gmodestmedblogs.blogspot.com/2018/12/high-insulin-cost-leads-to-underuse.html )

geoff​

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