Incremental steps are helpful but not sufficient to end underinsurance problem, panelists say
In America, it is conceivable to have health coverage, but not be able to afford care or treatment.
Three policy experts provided an update on the underinsurance crisis in the United States, where the proliferation and increase in the size of health insurance deductibles relative to income exposes many people to medical debt, as well as delayed or avoided care.
The Commonwealth Fund defines an “underinsured” measure as having a deductible equivalent to 5% or more of income; for 2020, the most recent year available, 28% of Americans with health insurance were underinsured, up from 19% a decade earlier, Sara Collins, PhD, vice president for coverage and access to health care, told moderator Clifford Goodman, PhD, senior vice president, Comparative Effectiveness Research, The Lewin Group.
Collins was joined by Amy Niles, MBA, Executive Vice President of the Patient Access Network (PAN) Foundation, and Katy Spangler, Co-Director of the Smarter Health Care Coalition, for a virtual session titled “The Problem of Underinsurance and Potential Solutions” at the 2022 V-BID Summit, hosted by the Center for Value-Based Insurance Design (V-BID) at the University of Michigan.
Niles described some characteristics of underinsured people who call PAN for financial assistance:
- Most have commercial insurance or federal insurance
- Most are Medicare beneficiaries
- Income is between 150% and 400% of the federal poverty level, but most are on the lower end of that range
- Most multiple chronic conditions
The demand for help is beyond the capacity of nonprofits like his to assist, Niles said, and is creating barriers to continuity of care.
There’s been some positive news in terms of deductibles, Spangler said, citing data from Mercer showing deductibles for some employer-sponsored plans have come down a bit, likely due to the 2019 repeal of the tax. Cadillac proposed 40% health. insurance premiums above a certain amount. When this tax was included as part of the Affordable Care Act in 2010 — although it was never implemented because Congress kept delaying it — it spurred employers to move to high deductible health plans (HDHP).
Goodman asked how underinsurance affects individual health care decision making or even decision making about non-health care decisions. Those who are underinsured delay or avoid health care because of costs twice as high as those who are insured but not underinsured, Collins said.
Niles agreed, describing a survey that shows individuals “have to choose between paying for this drug at the pharmacy counter or putting food on their table.” Patients are also skipping doses or deciding which of their conditions they will treat, especially if they are elderly with multiple chronic conditions.
Patients also have problems coping with emergencies – a PAN poll found a third of adults have less than $100 on hand – and others may not have transportation to access care.
More attention is being paid to the growing medical debt accumulated by Americans who are underinsured or uninsured; The week of the V-BID summit, Collins noted, the big 3 credit reporting agencies – TransUnion, Equifax and Experian – announced that they would stop including certain medical debts that were in collection before being paid. It will also take longer – a year, not 6 months – before a medical debt in collection is reflected on a person’s credit report.
Some 43 million Americans have an estimated $88 billion in medical debt on their credit reports, according to a report from the Consumer Financial Protection Bureau.
“There’s been growing attention that it’s really outrageous, that people’s credit reports are being affected by bills that they often don’t even have much control over,” Collins said.
Additionally, bills under $500, which account for 75% of medical bills reported to collection agencies, will not be reported, she said.
Moving on to another cost issue, Goodman asked Niles to provide insight into potential Medicare Part D reform; a proposed $2,000 cap on out-of-pocket prescription drug costs for Medicare Part D enrollees who are not eligible for cost-sharing protections was included in President Joe Biden’s Build Back Better Act, which is stalled in the Senate.
The person who “is faced with paying for an expensive drug, they’re catapulted pretty quickly into the catastrophic phase of the benefit cycle where they pay 5% of the cost of the drugs and I always say, you know, 5% doesn’t sound like a lot, but 5% of expensive drugs is a big number,” Niles said.
“Patients have waited too long for reform,” she said, saying she still hoped bipartisan support would remove unlimited liability for those costs.
A change that has taken place recently relates to advice on preventive care that can be paid for on a pre-deductible basis in Health Savings Accounts (HSA) or HDHPs. When these were created as part of the Medicare Modernization Act of 2003, the law included a safe harbor that allowed payment for preventive care, but in 2004 the IRS passed a very limited view of what counted as preventative care, Spangler said.
The Smarter Health Care Coalition and the V-BID Center have advocated for a change in these guidelines, and in 2019 the Treasury Department issued an advisory that gives HSAs and HDHPs the flexibility to cover medications and specific services used to treat chronic conditions. before reaching the plan deductible.
Employers and health plans have responded positively to this advice, Spangler said, citing surveys that show between 75% and 80% of employers offer more chronic disease prevention on this basis.
Specific types of care considered high-value but low-cost now allowed under these new guidelines include insulin, blood sugar monitoring, asthma medications, statins and blood pressure monitors – around 14 items and services altogether – and the impact on premiums was negligible, she says.
With this success in hand, the Smarter Health Care Coalition and the V-BID Center are now asking the IRS to say that the list is intended to be used as an illustration of low-cost, high-value care, not a finish. . , so the plan or employer has even more flexibility as to what can be offered on a pre-deductible basis.
In the end, the panel agreed that while incremental fixes wouldn’t be enough to fix the entire underinsurance problem, it’s the only solution available at this time.
“I think ideally we all need to work towards a system where we think about the total cost of care, but also incorporate concepts around the social determinants of health and health equity. This is vitally important, but we have no choice but to move to rolling fixes,” Niles said.