In the national debate over health insurance, the Affordable Care Act gets the spotlight. However, most Americans don’t get their health insurance on the ACA's exchanges. They have insurance through their employers.
There’s a brewing crisis in the out of pocket costs baked into many of today’s employer-sponsored plans. The issue is that deductibles have been going up.
The average person now must pay more than $1300 out of pocket before insurance begins coverage. On top of that, costs and copays for prescription drugs have been skyrocketing.
That leaves many middle-class employees forgoing medical care or scrambling to stretch their budgets to afford a trip to the doctor or a necessary prescription.
One Woman’s Story
In a recent series of articles on this topic, the Los Angeles Times told the story of Wendy Matney, a part-time home health aide in Tennessee. Ms. Matney, 39, has a type of epilepsy that often causes seizures, some of them violent. Meaning, trips to the emergency room aren’t unusual.
Ms. Matney began having seizures in her 20’s, and they left her unable to hold down a full-time job. At that time, she qualified for Medicaid; that paid for tests and treatment.
When she got married in 2014, she went on her husband’s high deductible, employer insurance. Her first trip to the hospital in an ambulance cost thousands of dollars.
Several more hospital visits over the past five years have left them unable to keep up with the medical bills on her husband’s salary and her part-time pay.
Although they pay what they can, the local hospital took them to court last year for $11,000 in medical bills. The hospital is now garnishing a quarter of her husband's wages, leaving him with an income of just $663 every two weeks.
Matney’s plan currently has a $5,500 annual deductible. She regularly rations her healthcare because she can’t afford it.
She begs family not to take her to the emergency room and just to wait for the seizure to pass. She doesn’t try new medications that might help her, sticking with low-cost generic drugs instead.
Also, she doesn’t get recommended follow-up testing. It doesn’t seem fair, she says, that it costs so much just to live.
The Rising Costs
Just 13 years ago, nearly half of all workers were covered by employee insurance plans that had no deductible at all. The average deductible in 2006 was only $379 (adjusted for inflation), according to an annual Kaiser Family Foundation employer health benefits survey.
But by 2018, the survey found the average deductible had climbed to $1,573 for single coverage.
Alongside that, prescription drug costs have gone through the roof. For example, a patient with MS paid an average of just $15 a month for the medication in 2004, but by 2016, the number had jumped $309, with few differences between the medications.
Patients in high deductible plans had even higher medication expenses, averaging $661 a month in 2016, according to an article in the journal Neurology.
The growth in prescription costs and the size of deductibles has far outpaced wage growth or inflation, putting healthcare out of reach for many people who have “good” employer-sponsored coverage.
Going into Debt, Putting Off Care
Wendy Mattney’s story is not uncommon, especially for people who have been diagnosed with a chronic condition. People with chronic conditions like high blood pressure, high cholesterol, arthritis, and diabetes need a combination of regular doctor visits and prescription medications to keep their conditions under control and enjoy optimal health.
The same goes for cancer patients, who have extremely high treatment costs after they are diagnosed.
But with higher deductibles and prescription costs, many people struggle to afford the health care they need. While people with high incomes can afford to pay out of pocket for doctors, emergency rooms and prescriptions, middle-class people who live paycheck-to-paycheck with little savings are having a tough time.
In a survey by the Los Angeles Times and the Kaiser Family Foundation of adults with employer-sponsored insurance, four out of 10 people said they had trouble affording some sort of health care or insurance cost.
Of the people who struggled to afford healthcare, nearly a third said that their biggest problem was paying medical bills before meeting their deductible. Most said they had put off vacations and major purchases and cut their household expenses. About half took on credit card debt or used up all their savings to pay for healthcare costs. A third had to take an extra job or work more hours.
But the most troubling statistic is this one: about half of the people with employer-sponsored health insurance said that they or someone in their family had skipped or postponed care or prescriptions that they needed, because of the cost.
Their money-saving strategies included using home remedies instead of going to the doctor; not getting recommended follow-up tests or treatments; putting off seeing a doctor; and skimping on prescriptions by not getting them filled, not taking the right dosage or cutting pills in half.
And research has shown that the higher the health insurance deductible is, the more likely patients are to forego needed health care.
The Ultimate Cost
Experts say that people who skip necessary care for chronic conditions are more likely to end up in emergency rooms and hospitals, causing them to incur higher costs.
Organizations that work with sick patients say they are getting more calls for financial assistance from people that have insurance.
High medical bills add stress to the lives of patients who are already sick. In fact, cancer patients are more than 2.5 times as likely to declare bankruptcy as people who don’t have the disease. Some research indicates that patients who have had to declare bankruptcy have shorter lifespans.
The problem is by no means limited to people who have employer-sponsored insurance. People who buy individual policies but make too much money to qualify for ACA subsidies are often in the same boat; stuck in plans with very high deductibles alongside high monthly premiums.
While some European companies limit cost-sharing for patients with some chronic conditions, the U.S. does not. In general, everyone in a high-deductible plan must meet their deductible in full before insurance starts covering.
A Call for Change
Americans shouldn't have to choose between having health care or having a decent place to live and eat. Yet, that's happening to people with moderate incomes, trying to manage ongoing health conditions but aren’t old enough to qualify for Medicare.
When people can’t afford to get the care they need, everyone suffers. The patients themselves get sicker. They may miss time from work or lose their jobs altogether because of health issues.
Then, families may have to sacrifice their own needs to caretake a sick family member or ensure their family member can get medical care.
All of this in addition to financial worries puts tons of stress on everyone, stress has been linked to a host of health concerns.
Society also suffers. Patients who haven’t gotten the care they need are more likely to end up in emergency rooms with a preventable crisis that they can’t afford.
Our health insurance system is complex, and there are no easy solutions. When you consider that 40 percent of Americans can’t afford a $400 emergency expense, it seems clear that deductibles of $1000. and up aren't the answer.
Lindsay Malzone is the Medicare Consultant for MedicareFAQ. She has worked in the Medicare industry since 2017 and is featured in many publications as well as writing Medicare focused columns for other publications.
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