Fwd: qotd: Are we forgetting about the underinsured?

_______________________________________________
Quote-of-the-day mailing list
Quote-of-the-day@mccanne.org
http://two.pairlist.net/mailman/listinfo/quote-of-the-day

-------- Original Message --------
Subject: qotd: Are we forgetting about the underinsured?
Date: Tue, 25 Mar 2014 11:06:52 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Commonwealth Fund
March 2014
America's Underinsured
By Cathy Schoen, Susan L. Hayes, Sara R. Collins, Jacob A. Lippa, and
David C. Radley

The twin goals of health insurance are to enable affordable access to
health care and to alleviate financial burdens when injured or sick. It
is well known that the uninsured are at high risk of forgoing needed
care and of struggling to pay medical bills when they cannot postpone
care. Studies further find that insured people who are poorly protected
based on their households' out-of-pocket costs for medical care are also
at risk of not being able to afford to be sick.

Using newly available data from census surveys, this report provides
national and state-level estimates of the number of people and share of
the population that were insured but living in households that spent a
high share of annual income on medical care in 2011–12. In the analysis,
we refer to these people as "underinsured." However, this group is only
one subset of the underinsured. Our estimates do not include insured
people who needed care but went without it because of the out-of-pocket
costs they would incur, or the insured who stayed healthy during the
year but whose health insurance would have exposed them to high medical
costs had they needed and sought care.

The analysis finds that in 2012, there were 31.7 million insured people
under age 65 who were underinsured. Together with the 47.3 million who
were uninsured, this means at least 79 million people were at risk for
not being able to afford needed care before the major reforms of the
Affordable Care Act took hold.

In all states, people with low incomes are at greatest risk for being
underinsured or uninsured. Nationally, in 2012, nearly two-thirds (63%)
of those with incomes below the federal poverty level were either
underinsured or uninsured. Among those with incomes between 100 percent
and 199 percent of poverty, nearly half (47%) were underinsured or
uninsured.

A decade or more of people losing health coverage and a steady erosion
in the financial protection of insurance has also put middle-income
families at risk. In 2012, one of five people (20%) under age 65 with
middle incomes (between 200% and 399% of poverty)—an estimated 15.6
million people—were either underinsured or had no health insurance.

Low- and Middle-Income Households Most at Risk

The exposure to high out-of-pocket medical care costs even when people
have insurance reflects insurance trends — including higher deductibles
and cost-sharing, as well as gaps in benefits or limits on coverage — in
both the employer and individual insurance markets. This puts insured
families at risk in terms of access to health care and financial well-
being. Studies indicate that low- and middle-income insured individuals
and families who face high out- of-pocket costs for medical care
relative to their incomes are nearly as likely as the uninsured
population to go without care because of costs, forgo care when sick,
struggle to pay medical bills, or incur medical debt. Both population
groups — underinsured and uninsured — are at far higher risk of access
or medical bill concerns than those with more protective coverage.

Premiums for Employer-Sponsored Insurance Have Risen More Rapidly Than
Incomes, Value of Benefits Declined

Over the past decade, the cost of health insurance has risen far faster
than incomes for middle- and low-income working-age families.

At the same time that premiums have risen, the value of benefits has
declined. Deductibles more than doubled for plans provided by larger and
small employers. This increase — plus other cost-sharing or limits on
benefits — has left insured patients paying a higher share of medical
bills. With little or no growth in incomes over a decade, insurance and
care have become less affordable.

Medicaid and Income-Related Premium Assistance

Using newly available information on out-of-pocket payments for
premiums, we estimate that 29 million insured people — 11 percent of the
total under-age-65 population and 13 percent of the insured population
under age 65 — paid premiums that exceeded the Affordable Care Act
premium contribution thresholds for those at their household income
level before reforms. In other words, they had high premium
out-of-pocket costs compared with incomes, with "high" defined as in
excess of Affordable Care Act contribution thresholds.

However, not everyone who pays high premiums relative to income will be
eligible for help. The 29 million insured people includes 13.7 million
with incomes below 138 percent of poverty who are paying premiums above
the Affordable Care Act thresholds for this group. Of these, 8.8 million
had private insurance they bought on their own or through employers.
Based on their income alone, they would likely be eligible for expanded
Medicaid if their state decides to participate in Medicaid expansions.

For those with incomes above Medicaid eligibility, the law restricts
eligibility for premium assistance in marketplaces to people buying
insurance on their own and to workers who have employer coverage where
the employee's premium costs for self-only coverage exceeds 9.5 percent
of income. Among the 29 million insured with high premium costs in 2012,
11.7 million had employer-sponsored coverage and incomes that would be
too high to qualify for expanded Medicaid.

Medicaid Expansion Makes a Critical Difference

Many of the states not participating in Medicaid expansion have among
the highest rates of uninsured or underinsured people as a share of
their total state populations. Without Medicaid expansion, this
vulnerable group will remain at high risk for access, health, and
financial problems.

Changing the Insurance Map of the Country

Substantial gains, however, will depend on the plans people choose and
state efforts to ensure high-value benefit designs and accessible
networks. One concern is to what extent people with low or modest
incomes will opt for "bronze" level plans. People choosing bronze-level
plans will pay 40 percent of medical care costs on average and thus
remain at financial risk. Additionally, in choosing a bronze plan,
people with low incomes forgo the cost-sharing subsidies that are tied
to silver plans that substantially reduce out-of-pocket spending for
medical care. As of February 2014, 62 percent of those enrolling in the
new marketplaces selected silver plans, 19 percent had selected gold or
platinum, and 19 percent had selected bronze.

In addition, it is important to note that the Affordable Care Act's
limits on out-of-pocket costs for covered benefits also apply only to
in-network providers. As discussed in a recent report profiling insured
people with medical debt, even with the new limits, the insured may
encounter high medical care costs if they receive care from
out-of-network clinicians.

From the Conclusion

However, the new marketplaces offer plans that include substantial
cost-sharing and annual caps on out-of-pocket patient costs that apply
to in-network providers only. With these benefit designs, there is the
risk that the nation could convert the uninsured into the underinsured
and fail to stop the erosion in insurance protections for people with
private insurance coverage.

Full report (40 pages - several Exhibits and Tables):
http://www.commonwealthfund.org/~/media/Files/Publications/Fund%20Report/2014/Mar/1736_Schoen_americas_underinsured.pdf


Comment by Don McCanne

This Commonwealth Fund report provides an estimate of the numbers of
underinsured - people who could experience financial hardships and
impaired access in the face of medical need. Although the authors
express optimism that the numbers of uninsured will decline as a result
of the provisions of the Affordable Care Act (ACA), there is a high
probability that there will be a substantial increase in the numbers of
people who will be underinsured.

The private insurance design features supported by ACA makes continued
underinsurance an inevitability. The insured are vulnerable because of
low actuarial value plans with high-deductibles and other cost sharing,
narrow and ultra-narrow networks that impair access to in-network
providers, inadequacies of the subsidies, and the perpetuation of an
expensive, administrative wasteful model of financing care - a model
that we all pay for, including the underinsured.

What is not expressed in the Commonwealth data is the number of people
who may not have attempted to access care because of concerns of high
out-of-pocket costs. Studies have shown that these people do forgo care
that they should have.

A sobering thought is the even larger numbers of individuals not
represented in this study. These are the people who remained healthy and
never had to test the adequacy of their insurance. Tens of millions of
people are vulnerable and would become financially insecure if they did
develop significant health problems. This includes many individuals with
employer-sponsored insurance. They are underinsured and don't know it.
Excluding these individuals from the underinsured count results in
estimates far below the actual numbers.

The design of ACA makes it clear that both the uninsured and
underinsured will remain a problem in the foreseeable future, but it
will be underinsurance that will likely provoke widespread discontent.
Its prevalence may well become the most compelling reason to abandon the
perversities brought to us by the private insurance industry. People
will be ready to replace our dysfunctional system with a single payer
national health program that would eliminate, for everyone, financial
barriers to health care.