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:

Most ACA plan enrollees qualify for tax credit

About 87% of people who have enrolled in or actively renewed a 2015 health insurance plan through the federally run exchange qualify for a tax credit, according to HHS data. Those credits may be in jeopardy depending on the outcome of a legal challenge to be decided by the Supreme Court. The New York Times (tiered subscription model)/The Upshot blog (12/31)

Companies balance lavish perks with wellness initiatives

Many small, high-growth tech companies offer lavish employee perks, from gourmet meals and free food pantries to happy hour on the job, and then balance them with wellness programs aimed at keeping people healthy. Andrew Burke, head of talent development at Squarespace, says the company wants to have an environment where workers are comfortable because it pays off in productivity. The New York Times (tiered subscription model) (6/20)

Medicare Coverage of Home Health Care

The Obama administration has proposed a settlement in a nationwide Medicare class-action lawsuit. It would allow thousands of U.S. residents with chronic conditions or disabilities to qualify for Medicare coverage of home health care services, reports The New York Times. The administration agreed to change Medicare rules to cover skilled nursing and therapy services when they are needed to maintain the patient’s current condition or prevent or slow further deterioration. The changes would apply to the traditional Medicare program as well as private Medicare Advantage plans. More than 10,000 beneficiaries whose claims were denied before Jan. 18, 2011 when the lawsuit was filed are expected to benefit as their claims would be re-examined under the new standards, the Times reports. The changes are expected to generate savings because fewer patients would need to depend on hospitals and nursing homes for physical therapy and similar services.

Last Updated 06/29/2022

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