Another Fall and Winter Ritual: Worrying About Health Insurance and Coverage

Just as sure as winter arrives, so do concerns about next years’ health insurance premiums — which providers may (or may not) be included and what may (or may not) be covered. This is the time of year we may remember lofty campaign promises to reduce health care costs and make health care affordable/accessible and then realize that when all is said and done, a lot more is said than done. But let’s start with some encouraging developments. Patient protection elements of the 2010 health insurance law, which included the elimination of lifetime caps, helped cut the number of personal bankruptcies in the United States by about 50% since 2010.¹ During that same time period, the percentage of non-military, non-Medicare eligible persons who were uninsured at some point during the calendar year dropped from ~16% to an all-time low of approximately 8.8%, ranging from 2.8% in Massachusetts to 17.3% in Texas.² 

Underinsured. On the flip side of the good news, the number of Americans whose out-of-pocket costs and deductibles are high for their incomes (defined as 5% to 10% of income excluding premiums) continues to rise for all insurance types and among all age groups. Specifically, between 2003 (the year data about the number of individuals who are underinsured began to be collected) and 2016, the percentage of adults 19 to 64 years of age who had insurance all year but were underinsured increased from 12% to 28%.³ Data from the Commonwealth Fund Biennial Health Insurance Survey show in 2016, 24% of persons with employer-provided coverage and 44% of persons with individual coverage were underinsured, with rates ranging from 21% in California and New York to 32% in Florida and 33% in Texas.³ 

Out-of-pocket costs. Increasing deductibles and other out-of-pocket costs are one of the ways insurance companies and employers have been passing the ever-increasing costs of health care onto individuals, including older adults enrolled in some Medicare Advantage plans. The almost 1 in 3 Medicare enrollees choosing a Medicare Advantage plan from an insurance company may be surprised to learn they can have an out-of-pocket maximum of $6700 per year.⁴ Another reason Medicare and non-Medicare recipients need to increasingly scrutinize the fine print and footnotes in insurance plans is the increasing use of provider limitations. Although all plans have preferred and in- and out-of-network providers, some plans are much more restrictive than others. A relative newcomer to the non-Medicare market, the Exclusive Provider Organization (EPO) has attracted new enrollees with its low premiums, but they come with unpleasant consumer surprises.⁵ People generally know that HMOs typically do not cover out-of-network care; this is also true for EPOs. 

Premiums. While average annual premium increases for employer-provided health insurance continue to outpace earnings, the steep increases seen at the beginning of this decade have leveled off somewhat, going from 78% between 2000 and 2006 to 37% from 2006 to 2012 (37%) and 25% between 2012 and 2018.⁶ Still, the year-over-year increases (combined with increasing out-of-pocket costs) and the predicted 5% increase for 2019 represent a substantial cost, especially for employees in lower-income groups. For the 20 million Americans who do not have employer-provided health insurance, uncertainty as direct result of administrative actions designed to repeal but not replace the 2010 Patient Protection and Affordability Act (also known as ACA or Obamacare) has become the new norm.⁷ During the first 5 years of the ACA (2011 to 2016), premiums in the individual market increased an average of 12% per year (considerably outpacing increases in earnings), but in 2017 and 2018 premiums increased an average of 23% per year.⁸ More recent administrative steps are designed to further erode the ACA by encouraging young, healthy individuals to obtain coverage outside the ACA marketplace which, in turn, is predicted to sharply increase premiums for people 50 to 64 years of age.⁷ 

Back to “the good old days.” The promotion of individual insurance plans that are outside the ACA market place and charge much lower premiums brings us right back to the importance of reading the fine print on policies, because these so-called short-term, limited-duration insurance plans are similar to the only plans persons in the individual market had access to in the past. They are called short-term policies because they are not automatically renewable and they are medically underwritten (if you have a health condition you can be turned down or charged higher premiums without limits), exclude coverage for pre-existing conditions, do not have to cover essential health benefits, impose lifetime and annual limits, and may require cost sharing (ie, you pay) in excess of $20 000 per person per policy period.⁹ In other words, these plans take us right back to “the good old days” of rescission (where your insurance would simply be discontinued if you were to become ill), running up against the lifetime limit if you experience a serious accident or health problem and all the other problems that caused millions of Americans to not have access to health insurance at all. These plans may save young and healthy people money ... as long as they do not need to use them.

Elephant in the room. At the heart of all the above-mentioned issues that cause us to worry as care providers to patients that may not be able to access or afford is the fact that the cost of health care in general in the United States continues to outpace all other developed nations on its unsustainable path to 20% of Gross Domestic Product.¹⁰ Some of the drivers of this trend include prescription drug costs (69% increase since 2000), hospital costs (60% increase since 2000), health care industry lobbying (doubled since 1998), and hospital consolidation.¹⁰ Of course, the list is much longer and factors such as exorbitant administrative costs¹¹ and billions of dollars in insurance company profits¹² all add up. One way or another, everyone pays for it. So the real question is: Why do politicians talk so much about health insurance while ignoring the elephant in the room? Instead of endlessly talking about and tweaking insurance plans, trying to repeal the ACA, or adding more red tape, why not look at the real drivers of outcomes and costs and take real actions to improve both? There are ample data to show it is possible and can be done.¹⁰ Less talking and more doing to address the elephant in the room would be a welcome change for consumers and providers alike. We are tired of the never-ending changes to coverage options and restrictions, dealing with billing issues, calling insurance companies, collecting payments, working with patients who are unable to afford the deductibles, changes in their health plans they do not understand .... the list goes on and on. Wouldn’t it be nice to greet winter only with thoughts of the upcoming holidays? Put that on your holiday Wish List!