Twenty years ago, most U.S. residents with solid major medical coverage paid small co-payments when they sought ordinary in-network care. They might never have to worry about a deductible, and the deductible might be just $500, or less.
Today, the Patient Protection and Affordable Care Act (PPACA) and a general desire to make patients better health care shoppers are pushing insurers to give consumers more “skin in the game” — higher out-of-pocket costs.
Many people who had private health coverage through the new PPACA public exchange system get plans with deductibles of $6,350 for self-only coverage and $12,700 for family coverage.
See also: Underinsurance persisting in exchanges
PPACA cost-sharing reduction subsidies can reduce the out-of-pocket costs for consumers who earn less than 250 percent of the federal poverty level and buy the right coverage. Other consumers may have to pay thousands of dollars before their plans covers hospital care.
Some consumers have plans that cover nothing but the basic PPACA-required package of no-out-of-pocket-cost preventive services until the consumers spend enough to meet the deductible.
Meanwhile, 28 percent of U.S. residents told the Center for Financial Services Innovation that they have less than $1,000 in liquid savings, and 36 percent said they run out of money before the end of the month at least some of the time.
TransUnion found that many U.S. residents also have a hard time scraping up enough credit to pay unexpected bills.
At the end of 2014, typical consumers had just $1,350 in credit card borrowing power or other general-purpose revolving credit per $100 of costs in a health care services basket, down from $1,520 at the end of 2013.
Subprime consumers had just $360 in revolving credit capacity per $100 of health care services basket cost, down from $430 a year earlier.
Companies like Prosper Healthcare Lending that once focused on helping consumers pay for cosmetic surgery and dental care, and like and CarePayment, which has always been in the major medical health credit market, are now seeing more opportunities to help consumers pay ordinary medical bills. CarePayment announced in late 2014 that it had arranged $100 million in funding to back its patient finance program.
For a look at some of the new frontiers in patient finance, read on.
1. Patient finance companies could help consumers with “conventional” high-deductible plans.
Just a few years ago, patient health care credit programs were controversial.