Health care costs are out of reach for one in four working adults with private insurance

The Greenville News
December 10, 2015

Health care costs are out of reach for one in four working adults with private insurance and many go without needed medical care as a result, new research shows.

“More Americans than ever have health insurance,” said Dr. David Blumenthal, president of the Commonwealth Fund, which conducted the study, “but these findings show that too many people with all types of coverage aren’t getting care because of high costs.”

The report looked at premiums, deductibles and out-of-pocket expenses as a share of income. About nine in 10 people in the survey had employer-sponsored insurance while about 6 percent had Obamacare coverage and 5 percent had an individual plan.

With the advent of the Affordable Care Act, also known as Obamacare, the focus has been on those who have no insurance at all.

But as health care costs rise, businesses in recent years have been shifting more costs to employees in the form of higher deductibles, copayments and premiums, all at a time when wages have been stagnant.

The study found that high deductibles are one of the top reasons people can’t afford health care. About 43 percent of those in the survey ─ and 51 percent of low- and moderate-income people ─ said their deductible is difficult or impossible to afford.

“We are seeing deductibles rise among employers,” said Cheryl Parcham, private insurance program director for the nonprofit health care consumer group Families USA. “It is a really huge problem for many consumers.”

While premiums, copayments and coinsurance are a little easier to afford than deductibles, according to the report, 34 percent of low-income adults, or someone making less than $23,340 a year, had trouble paying the deductibles, the study shows.

And those high health-care costs mean many people go without care, the research shows.

Skipping care

About 40 percent of those with high deductibles didn’t go to the doctor when sick, skipped a recommended follow-up test or preventive test, or had not seen a specialist.

And 39 percent of low-income adults didn’t fill a prescription, see a doctor when sick, or skipped tests or follow-up visits because of copays or coinsurance.

“Consumers feel the effect of health-care costs every time they pay their premiums or reach into their pockets at the doctor’s office,” said Sara Collins, lead author of the study and vice president for health care coverage and access at the Fund, a private nonprofit foundation that advocates for affordable, quality health care for all.

“Our index looks at how working-age adults are spending money on health care, using a fairly conservative measure of affordability to highlight how many people have costs that likely make it difficult to afford other necessities like food and housing,” she said.

“It’s scary to have people putting off care,” said Parcham. “And it is really something the health care system needs to address going forward.”

Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, said the findings make sense because people with limited incomes often have to choose between paying for health care or the rent.

Shifting more of the cost onto employees is a trend that’s been building for a while, said Frank Knapp, CEO of the South Carolina Small Business Chamber of Commerce.

“As we all know, wages have not risen much in the recovering economy and health insurance premiums and drugs prices have increased,” he said. “If people aren’t bringing in more than they used to, but health-care costs are going up, of course it will get to a point where they can’t afford them anymore.”

Controlling costs

Knapp said the country needs to do more about controlling health-care costs. But, he added, there isn’t much of an appetite in Congress for doing anything about it because of the influence of the powerful health care lobbies.

“This may foreshadow what we’ll be seeing for a number of years,” he said.

Parcham said that at the same time as costs have been going up for consumers, there has been some erosion in employer-based coverage.

Many companies shifted more costs to employees thinking they could use their health savings accounts to get them through the deductible, she said.

But those accounts hold the employee’s own money to begin with and many families can’t spare funds for an HSA, she said.

Some hopeful trends for those who buy Obamacare plans is that some are eligible for cost sharing that reduces the deductible, Parcham said.

And guidelines have been proposed to encourage, but not require, companies to cover some services such as preventive care outside of the deductible, she said.

Meanwhile, she added, most plans have caps on out-of-pocket costs so that employees who become very ill will only have to pay out a set amount.

But at some point, she said, consumers may say they just can’t participate in insurance unless the plans are richer and more cost-effective.

“As the Affordable Care Act moves into its next phase, when it will focus on improving quality of care and keeping costs down,” said Blumenthal, “policies to mitigate cost burdens for families may also be needed.”


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