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Why Insured Americans Are Skipping Out On Health Care

CREDIT: SHUTTERSTOCK
CREDIT: SHUTTERSTOCK

Despite efforts to close gaps in health care coverage, many Americans with private plans aren’t fully covered even though a considerable amount of their income goes to their health plans, according to a recently released Commonwealth Fund report.

Researchers at the Commonwealth Fund found that 21 percent of adults with private health insurance spent five percent or more of their income on out-of-pocket health care costs even before factoring in premiums. In that group, low-income adults had the highest costs, which in some cases surpassed 10 percent of their income.

The report, touted as “Too High A Price: Out-of Pocket Health Care Costs in the United States,” includes survey data from people with employer-sponsored health insurance, Affordable Care Act marketplace plans, individual health insurance, Medicaid, and other forms of coverage.

“In order for health insurance to work for families, and for the U.S. health care system to work well, it will be important to bring down the number of people who are underinsured — people who have coverage that doesn’t provide adequate financial protection,” Commonwealth Fund President David Blumenthal, M.D said in a press release.

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Blumenthal added: “Research shows that people who have insurance but have high health care costs relative to their income are as likely to skip getting the care they need as those with no insurance at all.”

Other research supports Blumenthal’s point. Americans spend an average of $3,000 more in health care costs than some of their European counterparts, due in part to the host of services that European hospitals provide free of charge, especially to expectant mothers. Previous data has also shown a 34 percent increase in out-of-pocket costs for adults with employer coverage between 2004 and 2007. According to a National Opinion Research Center study, annual out-of-pocket spending topped $700 by the end of the last decade.

For patients in the American health care system, variations in pricing for procedures across different geographic areas often becomes a major concern. While Medicare has made some progress in attempting to match payments to the actual costs of services, people covered by private insurers may be confronted with expensive bills that don’t reflect the quality of care they received. Instead, the final price often includes the use of supplies or additional services.

A 2013 Centers for Medicare and Medicaid Services (CMS) study, for example, showed that the uninsured and the privately insured often suffer the most from what researchers call “price gouging” — the act of charging for use of supplies that can raise a hospital bill by tens of thousands of dollars, depending on the facility.

That’s why for some Americans, skipping out on health services may seem like the most cost-effective decision, regardless of their type of insurance coverage. The new Commonwealth Fund study found that nearly 50 percent of low and moderate-income adults attempt to mitigate high health care costs by avoiding much-needed medical care, including refilling prescriptions, undergoing medical tests, and scheduling appointments with specialists.

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By no means is this a new occurrence. Years before the passage of the Affordable Care Act, many large companies offered high-deductible plans that required employees to pay more of their health costs upfront. While those plans offer low premiums, high out-of-pocket costs for care end up causing great financial burden down the line. Nonetheless, these policies have become more popular over the past several years as employers try to cut down on the cost of providing insurance.

Although the Affordable Care Act has broadened the number of coverage options that Americans have, loopholes in the legislation still allow employers to avoid health law penalties by offering high-deductible plans that meet the minimum ACA requirements, as long as they offer free preventative care without a copay. Anything beyond that will most likely be on the employee. According a survey conducted earlier this year, a considerable number of employers — one out of six — are offering those skimpy plans as a means of saving money and passing health costs off to members of their workforce.

That’s why health officials stress that consumers need to understand their plans to better navigate the health care system and manage costs. That includes knowing what services are included in their coverage, and making sure to stay within their insurer’s network of doctors, clinics, and hospitals.