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Why health plan enrollees want to scream

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When regulators were starting to set up the Patient Protection and Affordable Care Act (PPACA) public exchange system, most consumer groups talked about how wonderful coverage expansion would be.

The Henry J. Kaiser Family Foundation had analysts look hard at the PPACA plan design rules in 2011 and found that the deductibles for holders of typical bronze plan holders might range from $2,750 to $6,350.

Rod Humphrey, a broker, pointed out in September 2013 that many families that bought the cheapest PPACA plans without help from government subsidies could face out-of-pocket maximum levels of about $13,000.

PPACA defenders noted at the time that typical consumers in the individual health insurance markets in some states already faced deductibles and out-of-maximum limits in that range, but the expected cost-sharing levels come as a shock to consumers used to the relatively modest cost-sharing arrangements in place at typical group health plans.

Now some people close to medical billing are starting to notice that patients cannot necessarily come up with enough cash to cover bills for out-of-pocket costs. An executive at LifePoint, a hospital company, noted earlier this month that his company is having to make allowances for patients’ cost-sharing problems.

Now Sara Collins and other researchers at the Commonwealth Fund have noted in a new survey report that, even in the age of PPACA, consumers continue to have problems with out-of-pocket costs. The higher-income consumers in the category might be good prospects for hospital indemnity insurance, accident insurance, health care credit products, and other products that can fill major medical coverage gaps.

The Commonwealth Fund analysts had data on 2,751 insured U.S. adults ages 19 to 64 who were polled this fall. The analysts did not break down the results according to whether the survey participants had PPACA exchange coverage, other PPACA-compliant coverage, or major medical coverage that does not meet the PPACA requirements that started to take effect Jan. 1, 2014.

For a look of some of the analysts’ findings, read on.

Man having a heart attack 

1. Even the high-income enrollees are having trouble with the deductibles.

The Commonwealth Fund analysts provided data on consumers with incomes under 100 percent of the Federal Poverty Level (FPL); from 100 percent to 199 percent of the FPL; from 200 percent to 399 percent of the FPL; and over 400 percent of the FPL.

Insured consumers in lower-income groups reported having much more serious problems with handling out-of-pocket costs than higher-income survey participants — but people with incomes under 100 percent of the FPL can get Medicaid, and people with incomes under 250 percent of the FPL who buy certain plans through the PPACA exchange can get “cost-sharing reduction” subsidies that reduce the out-of-pocket cost burden.

Consumers with incomes over 400 percent of the FPL who have to buy coverage on their own get no help from the government.

Twenty-seven percent of the survey participants in the highest income category said affording their deductible is at least somewhat difficult, and 6 percent said affording their deductible is very difficult or impossible.

George Washington on a dollar

2. The high-income enrollees say co-payments and coinsurance amounts are starting to add up.

Co-payments and coinsurance amounts may seem trivial to healthy people with rich health benefits — but 10 percent of the high-income survey participants said handling routine co-payments and coinsurance amounts for prescriptions and visits to doctors is now at least somewhat difficult, and 2 percent said handling the routine co-payment and coinsurance bills is very difficult or impossible.


3. Even some high-income consumers are spending 5 percent or more of their income on out-of-pocket costs.

About 9 percent of the high-income consumers in the Commonwealth Fund study said they are spending more than 5 percent of their income on out-of-pocket health care costs — and 7 percent say they are spending more than 10 percent on out-of-pocket costs.


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