The number of Americans with health insurance has climbed to historic highs during the COVID-19 pandemic, but there’s a darker shade to that silver lining.
Many Americans have policies that provide only limited financial protection, so much so that many patients report forgoing necessary medical care or prescriptions to avoid being hit with out-of-pocket penalty costs.
These are some of the findings of a new health insurance study conducted by the Commonwealth Fund, a private research foundation that promotes high-quality and equitable health care.
The study comes on the heels of other health insurance data, including some released by the U.S. Census Bureau from its annual American Community Survey, attesting that certain pandemic measures, particularly those passed by Congress, have put more people on health insurance Than ever.
In 2021, nearly 299 million Americans had health insurance, the most on record, and the number of Americans without health insurance — just over 28 million in 2021 — fell by 1.4 million people from 2019, according to the Survey of the American community.
During the pandemic, Congress prevented states from excluding anyone from Medicaid, the health plan for lower-income Americans. It also increased subsidies to help pay for individual health plans purchased in the Affordable Care Act’s marketplaces.
Yet the increased insurance did not necessarily provide sufficient financial protection and, accordingly, the necessary medical care.
The Affordable Care Act requires insurance plans to provide certain benefits, but does not eliminate copayments and deductibles that patients must pay.
“The big but is that while it’s great that more people have insurance coverage, it’s also half the battle,” said Gideon Lukens, director of health policy research and data analysis at the left-leaning think tank the Budget Center. and political priorities. “You still have to make sure that people with coverage have access and don’t have to sacrifice their financial security to get it.”
Health policy analysts say Congress and states can take further steps to grow health insurance rolls and protect patients’ financial security.
The Commonwealth Fund survey, which was conducted this year between March 28 and July 4, interviewed 8,022 adults aged between 18 and 65. It found that 43% of working-age adults are underinsured.
This means they were either uninsured (9%), had a gap in their coverage in the previous year (11%), or were insured all year but were “underinsured,” which the Commonwealth defines as having coverage , which still does not provide affordable access to healthcare (23%).
As a result, Americans are less healthy than they could be, said Sarah Collins, a Commonwealth senior scientist and vice president who co-authored an analysis of the foundation’s findings.
“If you’re putting off medical appointments or not getting prescriptions because of costs, it means your overall health isn’t as good as it might have been,” she said. “This is an impact not only on individual lives, but also on the productivity of employers and the general well-being of the economy. And financially, it has a huge impact on people in terms of medical debt.
The Commonwealth considers a person to be underinsured if they have experienced one of three circumstances:
- Excluding health insurance premiums, an individual has faced out-of-pocket health expenses of at least 10% of household income in the previous 12 months.
- Out-of-pocket costs, excluding premiums in the previous year, were at least 5% of household income for an individual whose income was below 200% of the federal poverty line (in 2022, that’s $27,180 for an individual or $55,500 for a family of four).
- The health plan deductible is 5% or more of household income.
The study found that more than 4 in 10 people who got individual health plans in 2022, including those buying plans in the Affordable Care Act marketplaces, were underinsured. But nearly 30 percent of those in employer-sponsored health plans also reportedly fall into the same category.
According to data from the US Census Bureau, more than 164 million people got their health insurance through work in 2021.
The study also found that people with lower incomes were more likely to be underinsured. The same is true for those who consider themselves to be in good or poor health, or who identify as having at least one chronic health condition, such as diabetes or hypertension.
People who were either uninsured for at least part of the year or were underinsured reported much higher levels of difficulty getting treatment because of the cost. Or they didn’t seek help when they had a medical problem, missed a recommended treatment, test or follow-up visit, didn’t see a specialist when needed, or didn’t fill a prescription.
Overall, 61% of those considered underinsured and 71% of those who were uninsured for any part of the year were unable to get the medical care they needed because of cost. Less than a third of those with adequate insurance for the entire year failed to do so.
A high percentage of people with chronic conditions also said they had not filled prescriptions in the previous year because of the cost. This was true for at least a quarter of those with diabetes, lung conditions such as emphysema and those who had heart failure or a heart attack.
Two-thirds of those who were underinsured or had gaps in coverage during the year also said they had problems with medical bills, with many facing medical debt or making sacrifices in other parts of their lives to pay medical expenses from your pocket. Many report long-term consequences, including damage to their credit scores, the need to save, or the inability to pay for other necessities, such as food, heating or rent.
Half of those surveyed said they would not be able to cover an unexpected $1,000 medical bill within 30 days. The percentages are even higher for blacks (69%) and Hispanics (63%).
Potential status corrections
Collins said one of the most effective ways to improve inadequate health insurance would be for the last 12 states, most of them in the South, to expand Medicaid eligibility, as allowed by the Affordable Care Act, to all adults with incomes up to 138 percent from the poverty level. This step alone could provide insurance coverage to 3.7 million more people.
As other data confirm, the Commonwealth report found that uninsured people are disproportionately young, Latino, low-income and living in the South.
The recently passed federal Inflation Reduction Act extended pandemic-era subsidies for Marketplace health insurance plans for another three years, which will help many people afford premiums.
But health insurance enrollment will likely decline when the COVID-19 public health emergency ends, most likely in 2023. That’s when the moratorium on enrolling Medicaid beneficiaries will also end. The change would require states to reevaluate every Medicaid patient for eligibility, putting many millions at risk, including those who should be eligible, to be kicked out of the program because of bureaucratic red tape and red tape.
Collins said Congress could make additional changes to the marketplace’s rules to reduce out-of-pocket costs for beneficiaries. Subsidies are now tied to so-called silver plans, which provide 70% actuarial coverage, meaning they typically cover up to 70% of an individual’s health care costs. The Commonwealth recommends instead tying subsidies to gold plans, which cover 80% of health care costs.
Benchmarking to Gold plans would make those plans more affordable. It would also be expensive for the federal government because of higher subsidy payments, which could make it a tough sell for lawmakers.
Nearly a dozen states have passed measures in the past two years to provide protections for residents facing medical debt, and consumer advocates expect bills to be filed in other states next year.
More states could also provide assistance for low-income people, Collins said. While the federal government provides subsidies to help low-income Americans cover out-of-pocket health care costs, some states do as well or provide assistance to help people pay premiums or reduce out-of-pocket costs. These include California, Colorado, Massachusetts, New Jersey, Washington and Vermont.
Collins said more states could also follow Rhode Island’s lead in using insurance regulations to try to slow rate hikes charged by medical providers, which could lower health insurance premiums.
Three states, Colorado, Nevada and Washington, have either created or are planning to launch public health plans that would provide health insurance at a lower cost.
That will help, advocates say, but almost as important as having health insurance, health policy experts say, will be how much is left for beneficiaries.
“It’s one thing to have coverage, but the terms of that coverage must be adequate to meet the needs of enrollees,” said Justin Giovanelli, project director at Georgetown University’s Center for Health Insurance Reform.