Despite Coverage Gains, Underinsurance Hampers Patient Care Access

By Sara Heath

February 11, 2019 – Although more patients have access to health insurance, fewer have access to quality, comprehensive health plans just eight years after the passage of the Affordable Care Act (ACA), posing a threat to patient care access, according to the Commonwealth Fund’s Biennial Health Insurance Survey.

The survey – which aims to establish the insured rate, the number of patients experiencing gaps in coverage, and underinsurance due to high deductibles and out-of-pocket costs – revealed that the availability of skimpier plans has led to fewer patients accessing quality health plans.

The Commonwealth Fund calculated underinsurance by looking at a patient’s out-of-pocket costs not including premiums, the potential for incurring out-of-pocket expenses, and an individual’s annual household income. A patient was deemed underinsured if:

  • Their out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 10 percent or more of household income; or
  • Their out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 5 percent or more of household income for individuals living under 200 percent of the federal poverty level ($24,120 for an individual or $49,200 for a family of four); or
  • Their deductible constitutes 5 percent or more of household income.

The ACA’s rollout has certainly resulted in a decrease in the uninsured rate, the authors reported. In 2018, the uninsured rate was 12.4 percent, similar to where it was in 2016.

Additionally, coverage gaps are becoming shorter. In 2018, 61 percent of individuals experiencing a coverage gap said it lasted for six months or less. Thirty-one percent said they had been uninsured for a year or more.

READ MORE: ACA Ruling Jeopardizes Patient Care Access, Access to Coverage

Conversely, in 2012, one-third of patients said their coverage gaps lasted for six months or less, while 57 percent said the gap lasted a year or longer. This highlights improvements in the system after ACA rollout.

However, although the uninsured rate is going down, the underinsured rate is growing, with most of those lacking adequate insurance coverage falling into the “employer-sponsored” category. Forty-five percent of individuals ages 19 to 64 are inadequately insured, about the same rate as in 2010, before the ACA was rolled out.

“Although the Affordable Care Act’s reforms to the individual market have provided consumers with greater protection against health care costs, many moderate-income Americans have not seen gains,” the report authors explained.

“While plans in the employer market historically have provided greater cost protection than plans in the individual market, businesses have tried to hold down premium growth by asking workers to shoulder an increasing share of health costs, particularly in the form of higher deductibles,” they added.

This means that employer-sponsored plans are not beholden to the same regulations that exchange plans or Medicaid are. Patients who are underinsured receive limited help from their plans to manage patient financial responsibility.

READ MORE: Does the ACA Drive Patient Access to Primary Preventive Care?

For example, although large companies face a minimum coverage requirement, that requirement usually hangs at around 60 percent of a typical patient’s healthcare costs. This still leaves patients extremely liable for high out-of-pocket expenses.

As a result, patients who are underinsured or who experience coverage gaps are more likely to struggle to pay their medical bills than those with continuous, comprehensive healthcare coverage.

These trends have had negative consequences on patient care access, the report continued.

In 2012, 43 percent of patients said they delayed or did not access care at all because of high healthcare costs. Following ACA rollout, this number shrank as low as 34 percent of patients in 2016. But that number is on the rise again, with 35 percent of patients saying they are neglecting care because of high costs and inadequate healthcare coverage.

“The lack of continued improvement in overall access to care nationally reflects the fact that coverage gains have plateaued, and underinsured rates have climbed,” the report authors explained.

READ MORE: Health Disparities Persist in Patient Access to Care Under ACA

Additionally, medical debt is increasing, the report noted. Medical debt is bad for many parties, including patients who face considerable financial anxiety and providers who become liable for uncompensated care.

Healthcare policymakers can enact regulations that would keep these individuals from being underinsured, the Commonwealth Fund explained. These regulations would require employer-sponsored plans to maintain certain standards that would keep patients from facing financial issues, despite the fact that they are insured.

“The ACA made only minor changes to employer plans, and the erosion in cost protection has taken a bite out of the progress made in Americans’ health coverage since the law’s enactment,” the report authors recommended. “Both the federal government and the states, however, have the ability to extend the law’s coverage gains and improve the cost protection of both individual-market and employer plans.”

Those actions may include:

  • Widespread Medicaid expansion
  • Banning or placing limits on short-term health plans, which tend to be skimpier than traditional payer coverage
  • Creating state or federal reinsurance, which will ideally lower premiums
  • Reinstating the patient navigation services for the 2020 open enrollment period
  • Lift the eligibility cap on insurance marketplace tax credits
  • Make premium contributions to individual health plans tax-deductible
  • Fix the “family coverage” glitch, which would trigger a tax on employers whose premiums for family plans that exceed a certain threshold (for individual plans, that threshold is 9.8 percent of an individual’s income)

Additionally, the government could increase the ACA’s minimum coverage level, require deductible exclusions, offer refundable tax credits for high out-of-pocket costs, and create consumer protections from surprise medical bills to help patients better handle high healthcare costs.

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