Thursday, October 22, 2015

The Growing Affordability Crisis

Record numbers of Americans have health insurance, largely because of the Affordable Care Act.  Yet there is growing concern that even with insurance, many people are not able to afford the care they need:

- For over a decade now, employers have been shifting more costs onto employees.  The Commonwealth Fund reports that in 2003, only 1 percent of privately insured persons had deductibles of $3000 or more; in 2014, it was 11 percent, a greater than 10-fold increase.  In 2014, 27% were enrolled in plans with deductibles between $1000 and $3000 compared to 7% enrolled in such plans in 2003.

- The increasing amount that people have to pay out-of-pocket has resulted in millions of Americans becoming underinsured—they have insurance, but have to pay so much out-of-pocket that it creates a barrier to obtaining needed care.  The same Commonwealth Fund analysis finds that 31 million privately insured persons in 2014 were underinsured compared to 16 million in 2003.  (Underinsurance was defined by Commonwealth as out-of-pocket costs being 10% or more of income, 5% for lower-income persons; or the deductible is greater than 5% of income).

- The fund also found underinsured persons were less likely to get needed care: “insured adults with coverage all year who had health plans with high deductibles were more likely than those with low or no deductibles to report cost-related problems getting health care. More than two of five (44%) privately insured adults with a deductible of $3,000 or more reported not getting needed care because of cost compared with 16 percent of adults who did not have a deductible. Many underinsured adults with health problems reported difficulty caring for their conditions. Among adults with at least one chronic health condition, a quarter (24%) of those who were underinsured said they had not filled a prescription for their condition or had skipped a dose of their medication because of cost, compared with 7 percent of those insured all year and not underinsured. . .  Similarly, underinsured adults with chronic health conditions were more likely to say they had gone to the emergency room or stayed overnight in the hospital for their condition than were insured adults with health problems who were not underinsured.”

- The rising cost of prescriptions and generic drugs is also creating an affordability crisis for many.  A report by Express Scripts found that 15.7% of people enrolled in Medicare, Medicaid or commercial insurance had annual drug costs of $50,000 or more. Nearly two-thirds of those with annual drug costs of $100,000 was for hepatitis C, cancer, or compounded treatments.

For people enrolled in the marketplace plans offered through the Affordable Care Act, cost-sharing subsidies are available for those who earn less than 250% of the federal poverty level.  Such subsidies, however, are not available to those enrolled in commercial insurance plans.  And while most people enrolled in the ACA’s marketplace plans are satisfied or very satisfied with their deductibles and co-pays, the number one reason cited by eligible uninsured persons who have not enrolled is that the plans were too expensive.

The bottom line is that the high deductibles that are increasingly common in the commercial and employer-based insurance sectors, combined with the rising cost of medications, may be contributing to a new healthcare affordability crisis.  Getting more people covered, as the ACA clearly has done, is a worthy and essential reform.  But so is making sure that out-of-pocket costs and medication prices aren’t so high that even insured people can’t afford the care they need.

Today’s question:  What should be done about the growing affordability crisis?