Employees Are Increasingly On The Hook For Their Medical Costs

A Hospital Bill's High Fees Look Even Bigger When Unbundled : Shots - Health  News : NPRSource: Axios, by Caitlin Owens

The growth of high-deductible health plans led to people with employer-sponsored coverage paying for a larger share, on average, of their health care costs between 2013 and 2019, according to a new analysis by the Employee Benefit Research Institute.

Why it matters: A large portion are paying significantly more in terms of raw dollar amounts as well, with the biggest increases among the highest spenders — and that’s on top of premium increases. As costs rise, even many insured patients struggle to afford their care.

Yes, but: Out-of-pocket spending decreased during 2020, likely a byproduct of the way the pandemic disrupted the health care system and pandemic-era policies that may have lightened patients’ cost burden.

By the numbers: The share of their medical expenses paid by people enrolled in employer-sponsored coverage increased from 17.4 percent in 2013 to 19 percent in 2019, the analysis found. It declined to 16.2 percent in 2020.

  • * Enrollees spent a median $249 out-of-pocket in 2013, $287 in 2019 and $205 in 2020. This median includes people without any medical expenses. The average out-of-pocket costs rose from $737 in 2013 to $906 in 2019, falling to $811 in 2020.
  • * Enrollees in the 75th percentile saw their spending obligation increase from $826 in 2013 to $1,030 in 2019, and those in the 90th percentile saw an even larger increase, from $2,792 to $3,295.
  • * Out-of-pocket spending obligations varied significantly among patients with different underlying conditions.

Between the lines: Spending trends also varied based on the type of service.

  • * Before the pandemic, both the share of out-of-pocket spending and the absolute amount paid by patients increased most for outpatient services.
  • * The average amount spent out-of-pocket on prescription drugs actually decreased between 2013 and 2019, before seeing a slight increase in 2020.

Many Insured Patients Still Face Crushing Medical Debt

A recent Kaiser Family Foundation/New York Times study reveals that one-in-five working-age Americans have run into serious financial difficulties trying to pay medical bills despite being insured. In the survey, 62% of those with medical bill problems say the bills were incurred by someone who was insured, with 75% saying that the amount they had to pay for their insurance copays, deductibles, or coinsurance was more than they could afford. They reported skipping or putting off other health care in the past year because of the cost, such as postponing dental care, skipping doctor-recommended tests or treatments, or not filling a prescription. For out-of-network charges, 69% said they were unaware that the provider was not in their plan’s network when they received the care.

Consumer Watchdog says that PPO health insurance policies with very narrow provider networks and extremely limited out-of-network coverage are a new form of “junk insurance.” The group says that many patients cannot find competent in-network doctors, and then face huge medical bills due to extraordinarily limited coverage for out-of-network services.

Jamie Court, president of Consumer Watchdog said, “New PPO policies with very limited providers in-network and extraordinarily low benefits out-of-network are creating new express lanes to bankruptcy for families. Until insurance companies are forced to justify that their premiums, co-pays, and policy benefits are reasonable, too many families will be forced to choose between medical bills and other necessities of life, like paying their mortgage. These findings should shake up the statehouse and revive the regulation debate.”

In 2014, Consumer Watchdog sponsored Proposition 45, which would have allowed the insurance commissioner to make health insurance companies justify their rate hikes under penalty of perjury, and to reject excessive rate increases.

Other findings in the Kaiser/New York Times survey include the following:

  • 26% of insureds with problems paying medical bills say they received unexpected claim denials; and 32% say they received care from an out-of-network provider that their insurance wouldn’t cover.
  • Those in higher deductible private plans are more likely to report medical bill problems than those in private plans with lower deductibles (26% versus 15%).
  • Sixty-one percent of those with medical bill problems say they’ve had difficulty paying other bills as a result of their medical debt, and 35% say they were unable to pay for basic necessities like food, heat, or housing.

Read the Kaiser Family Foundation/New York Times survey here: http://kff.org/health-costs/press-release/new-kaisernew-york-times-survey-finds-one-in-five-working-age-americans-with-health-insurance-report-problems-paying-medical-bills/

Last Updated 08/10/2022

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