It's not exactly breaking news. But two new reports highlight how Americans are struggling with high out-of-pocket medical costs, even as most of the presidential candidates slog through their epic, insult-laden primary election battles, hardly talking about the issue. The findings suggest there will be strong public pressure for a solution, no matter who wins the November election.
The reports from the Urban Institute and the Kaiser Family Foundation illustrate the dilemmas millions of people face in accessing and affording healthcare in the new era of high-deductible insurance. Those problems have direct financial consequences for healthcare providers. During Community Health System's first-quarter earnings report Tuesday, President and Chief Financial Officer Larry Cash told analysts that the fourth quarter of 2016 will be his company's best quarter, because only then will patients have hit their insurance deductibles and be able to afford needed care at CHS facilities.
Nearly 25% of Americans surveyed last September who had coverage through employer plans, the Affordable Care Act exchanges, or individual plans outside the exchanges reported problems paying family medical bills in the previous 12 months, according to the Urban Institute's Health Reform Monitoring Survey, released last month. That compared with 16% of people on Medicaid and 27.8% of uninsured individuals who said they had problems with medical bills.
The Kaiser Family Foundation reached similar findings through focus group interviews with 91 low-income Medicaid and exchange-plan enrollees in six cities during January and February 2016. While most of the participants expressed appreciation for the ACA's coverage, they were stressed by high out-of-pocket costs, some of which came as a surprise. Here were some of the comments from exchange plan members in the focus groups, who tended to be less satisfied with their coverage and costs than Medicaid enrollees:
“The deductible was really high. They didn't really cover much. I was left with a lot of bills. I would just suffer through anything to not have to pay it.”
“I'd really like to see some specialists, but I know I wouldn't be able to afford the co-pay. I have $2,000 to $3,000 out of pocket every year, and I can't afford that.”
“Even though I have coverage … I still try not to go to the doctor … Every time I go to the doctor, they send me a bill in the mail … 'Fax me this.' 'Send me this.' 'Prove this.' 'Prove that.' It's ridiculous.”
“You get a procedure done that you're supposed to get done, a colonoscopy … But if (they) find something, it's not covered … Now it's like I get this series of bills … I've not gone in to get blood screens anymore because I don't know what they're going to pay for.”
“I broke my arm and my hip … I was covered by the insurance but the ambulance wasn't. It was $900 just to take me to the hospital … Nobody tells you.”
Some focus group members also expressed frustration with hassles they faced dealing with insurers and providers:
“Before my surgery, I would say (I spent) probably 10 hours a week on the phone, back and forth, getting things approved. This (caused) me more stress than anything I've ever dealt with in my whole life. There's no other industry where I would give you this much money to treat me this way.”
Even middle-class families with incomes above the threshold for subsidized exchange coverage are experiencing affordability problems. On Tuesday, National Public Radio reported on an Oklahoma dentist and his family who have to pay more than $13,000 a year in premiums and deductibles before they receive benefits from their health plan. “I felt like we were paying money to the insurance company so that they could just sit on it and put it in stock,” said Renee Powell, the dentist's wife.
Top hospital and insurance executives acknowledge the problem. “As individuals take on high deductibles and higher co-pays, they are essentially taking on insurance risk they can't necessarily afford,” Trevor Fetter, CEO of Tenet Healthcare Corp., said in an interview. His company has put a major focus on helping patients understand and pay their bills, including pressing for cash payments at the point of service.
The Democratic and Republican presidential candidates differ sharply on whether and how they address the out-of-pocket cost issue. The two Democratic candidates have offered explicit plans to help people with high out-of-pocket costs, while the Republican candidates have pushed for broader market mechanisms intended to reduce overall healthcare costs, including a greater emphasis on high-deductible plans combined with health savings accounts.
But what the candidates are saying about health policy is mostly getting drowned out by media coverage that focuses on the more sensational and salacious aspects of the campaign.
Democratic front-runner Hillary Clinton has proposed the most direct assistance. She would require health plans to: cover three annual visits to a doctor for illness without applying the deductible; give insured people a $5,000-per-family refundable tax credit for out-of-pocket costs exceeding 5% of their income; cap out-of-pocket costs for prescription drugs; bar providers and insurers from charging patients out-of-network bills for services received at an in-network hospital; and strengthen states' authority to block excessive insurance premium increases.
“For too many, their out-of-pocket medical costs are growing much faster than their wages, meaning too much of their hard-earned take-home pay goes to paying deductibles, co-pays and coinsurance for medical expenses,” Clinton's campaign said in a written statement.
Vermont Sen. Bernie Sanders, Clinton's Democratic opponent, wants to eliminate premiums and cost-sharing entirely by establishing a tax-funded, government single-payer insurance program covering the full range of healthcare services, including long-term care.
Donald Trump, the presumptive Republican nominee, has released a seven-point health policy agenda that doesn't directly address out-of-pocket costs. It would offer households a tax deduction for buying coverage, expand health savings accounts, and let insurers sell plans across state lines.
Since health savings accounts are paired with high-deductible plans, the accounts help consumers cover their deductibles and other cost-sharing responsibilities. But some experts question whether people with modest incomes have enough money to put into those accounts. “If you don't have much cash, then the fact that you can make your $1,500 deductible pretax doesn't make much of a difference,” Gary Claxton, a vice president with the Kaiser Family Foundation, told Modern Healthcare.
Ohio Gov. John Kasich, who exited the GOP race Wednesday, has not addressed the out-of-pocket issue. He proposed reducing overall healthcare spending by switching to a value-based payment system for providers and improving primary care.
Texas Sen. Ted Cruz, who dropped out of the GOP race after losing the Indiana primary to Trump Tuesday, also didn't directly mention the out-of-pocket issue. Like Trump, he favors interstate sales of health plans and health savings account expansion.
The issue of high out-of-pocket health costs, including costs for prescription drugs, is the domestic policy elephant in the room, even though it's not getting much attention in presidential campaign coverage. Chip Kahn, CEO of the Federation of American Hospitals, who was involved in lobbying that led to the crafting of the Affordable Care Act, predicted out-of-pocket costs would be a significant issue in the presidential campaign, with Clinton stressing her detailed policy proposals, and Trump using high out-of-pocket costs as evidence that Obamacare is broken.
Kahn said the Federation's member companies tell him patient responsibilities under high-deductible plans are a major financial issue for their hospitals because patients frequently aren't paying those bills. But he's skeptical that any candidate's proposals will solve the problem. “High cost-sharing is a long-term trend in employer coverage, because it's one way to keep premiums down,” he said. “I'm not confident anything can be done about it.”
