qotd: Urban Institute and Bankrate on high deductibles

Urban Institute
September 4, 2014
QuickTake: Nonelderly Workers with ESI Are Satisfied with Nonfinancial
Aspects of Their Coverage but Less Satisfied with Financial Aspects
By Adele Shartzer and Sharon K. Long

The Urban Institute's Health Reform Monitoring Survey has been tracking
health insurance coverage, including employer-sponsored insurance
coverage (ESI), since the first quarter of 2013. This QuickTake reports
on nonelderly (ages 18–64) workers' ESI in June 2014. In June 2014, most
workers (88.6 percent) were insured and, among those who were insured,
most (80.7 percent) had ESI (data not shown). When asked to assess their
ESI, workers were generally satisfied with their ESI in terms of
available health care services, choice of doctors and other providers,
and the quality of the care available under the plan; less than 5
percent of nonelderly workers with ESI coverage report being
dissatisfied with any of these factors. However, satisfaction levels are
much lower for the financial aspects of coverage, with workers more
concerned about premiums, co-payments, and their potential financial
risk from high medical bills. Nearly one in four nonelderly workers with
ESI (23.4 percent) is dissatisfied with the premium they pay for
coverage, and 27.2 percent are dissatisfied with the deductibles they
pay when receiving care. The protection that ESI provides against high
medical bills may be particularly limited for low-income nonelderly
workers (those with family income at or below 138 percent of FPL): 32.1
percent of low-income workers with full-year ESI report having problems
paying medical bills in the past 12 months. Overall, 14.2 percent of
nonelderly workers with full-year ESI report having problems paying
medical bills over the past 12 months.

http://hrms.urban.org/quicktakes/Nonelderly-workers-with-ESI.html

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The New York Times
September 4, 2014
How People Feel About Their Employer-Sponsored Health Plans
By Margot Sanger-Katz

There are new results from the Urban Institute's Health Reform
Monitoring Survey, which asked people with employer-based coverage how
they liked what they had.

For people earning between 138 percent and 400 percent of the federal
poverty limit, or between $33,000 to $95,000 — the income range of
people who are most likely to buy insurance on the public marketplaces —
more than 23 percent of workers with employer coverage reported having
problems paying their medical bills in the last year.

Sharon Long, a senior fellow at Urban, said that the results suggested
that consumers might not be prepared for what happened when they
combined a high-deductible insurance plan with big medical bills.

"What we've heard anecdotally from people with health plans is more
people are signing up for high-deductible health plans and then being
surprised that they have to pay the deductible," she said. That's a
concern on the new health insurance marketplaces, too. Early evidence
suggests that people tended to opt for cheaper plans, many of which came
with high deductibles — meaning that the newly insured may face some of
the same financial strain if they become seriously ill.

Deductibles and co-payments have been rising, as a growing number of
employers embrace the idea that giving workers more of a financial stake
in their medical care will help reduce overuse. "It's been going up over
the past few years," said Gary Claxton, a director of the Health Care
Marketplace Project at the Kaiser Family Foundation, which runs a
comprehensive annual survey of the employer insurance market. And no one
likes paying high insurance premiums or out-of-pocket costs

Over all, Ms. Long said, the rising costs of health care are likely to
remain a concern for consumers, wherever they get their insurance. "I
expect what we'll see over time, unless we are able to get costs under
control, is that all the cost questions are going to be an issue," she said.

http://www.nytimes.com/2014/09/05/upshot/how-people-feel-about-their-employer-sponsored-health-plans.html

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Bankrate.com
September 4, 2014
Worried about health insurance? That's common
By Jay MacDonald

Bankrate's Health Insurance Pulse survey was conducted Aug. 21-24 by
Princeton Survey Research Associates International.

Tom Baker, a professor of insurance law at the University of
Pennsylvania Law School, points out that a majority of working adults
receive their health insurance through their employer and thus have
largely been spared a direct impact from the Obama health care law. But
the survey's concerned majority may partially reflect uneasiness about
employer-based plans.

"There is research being done on liquidity, or 'financial fragility,'
where they asked people if they could come up with $2,000 to pay for a
major medical bill in the next month," he says. "I think 40 percent of
respondents said they either couldn't or it would be very difficult.
That suggests that people are financially fragile."

David Cusano, a senior research fellow at Georgetown University's Health
Policy Institute in Washington, D.C., suspects some of the fear over
health costs may stem from growing first-hand experience with how health
insurance works.

"With the Affordable Care Act, anybody who now wants insurance can get
it," Cusano says. "The question now becomes: 'Can I afford to use it?'
When you think about people confronting out-of-pocket maximums at around
$7,000 or deductibles of $5,000 for a family, that's a lot of money. You
throw prescription drug copays into the mix, and I can see where you
would be worried."

http://www.bankrate.com/finance/insurance/health-insurance-poll-0814.aspx

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Comment by Don McCanne

These two surveys are of people who have employer-sponsored health
insurance - the very large market of health plans that was protected by
the Affordable Care Act ("you can keep the insurance you have"). The
most significant change in employer-sponsored plans is in the increased
use of high deductibles as a means of slowing premium growth for the
employers.

The trade off is that employees and their families are exposed to
greater out-of-pocket costs whenever they access health care. These
surveys demonstrate that this exposure is not merely theoretical but is
actually creating significant financial insecurity for the insured.

But isn't the primary purpose of insurance to relieve you of financial
hardship should you have health care needs? Instead, these newer
insurance product designs are increasing the risk of financial hardship,
both in the employer-sponsored market, and especially, by design, in the
plans offered by the ACA insurance exchanges. That is why they selected
a lower actuarial value plan as the benchmark plan in the exchanges.

Reform should have been about fixing the problems with our health care
financing, not making them worse. A far better system would simply
provide access to health care when needed, without linking that care to
specific financial transactions controlled by a third party insurance
intermediary. We don't need private insurance programs. We would do far
better with prepaid health care, financed equitably through progressive
tax policies.

It's in our name. PNHP is Physicians for a National Health Program, not
physicians for private health insurance.