Why Are Millions of Insured Americans Still Struggling To Pay For Health Care?
The Affordable Care Act (ACA) was passed into law with several lofty goals — including making health insurance available to all Americans and ensuring that health insurance makes health care affordable and covers the medical care people actually need. In other words, no more “we are happy to sell you health insurance, we just won’t cover your chronic illness.”
The law has succeeded when it comes to getting people health insurance — as many as 16.9 million previously uninsured people now have coverage thanks to the ACA.
Early indications are that the Affordable Care Act is also beginning to make a dent when it comes to helping people afford doctor’s visits and medication. A June 2015 Commonwealth Fund survey found that more than 6 of 10 people with marketplace or Medicaid coverage who used their new insurance for medical care or prescriptions would not have been able to get or afford this care before. Even people who had health insurance before they enrolled ACA coverage said they were getting care they wouldn’t have been able to get previously.
These declines are encouraging, but if you have health insurance through your employer, there is more to the story.
MOST Americans with health insurance — more than 150 million in fact — get it from their employers (or their spouse’s). And, while these workers do have new protections and benefits through the Affordable Care Act (bans on lifetime benefit limits and the option to include children up to age 26 on their plans) the ACA has not drastically affected their coverage.
In fact, many people with employer insurance have a problem with their coverage. Health insurance premiums have been increasing for more than 10 years and employers, who often contribute a large portion of their employees’ premiums, have been looking for ways to keep their costs down. Rather than shell out more for health insurance themselves, employers have been shifting health insurance costs to workers by asking them to pay more toward their premiums, or selecting plans with higher deductibles and out-of-pocket costs for employees.
The result? People are paying more than ever before and getting less because their health insurance doesn’t cover as much of their costs as it used to.
At the same time, people’s incomes have not been rising as fast as their health care costs — between 2003 and 2013 median incomes rose an average of 11 percent in single person households while premium contributions to job-based health insurance plans increased 93 percent and deductibles more than doubled.
This sets up millions of working Americans, especially those who make less money or work in smaller companies, to be underinsured. That means they have health insurance but it doesn’t protect them the way health insurance should.
In fact, 31 million people in the United States (most with employer insurance but some with public coverage or insurance through the ACA’s marketplace or the individual market outside of the marketplaces) are underinsured because the money they need to spend to get health care — either out-of-pocket on things like copays, or on deductibles — is so high relative to how much money they make that they are at risk of not getting the care they need or racking up medical debt.
People with employer insurance have been hit especially hard by underinsurance. In 2003, one in 10 was underinsured. By 2014 that number had doubled to one in five. People working in larger companies were somewhat less likely to be underinsured as those employers were probably better able to absorb rising health care costs. But 27 percent of workers in companies with fewer than 100 employees were underinsured. And people with health problems were more likely to be underinsured than those who were healthier.
The consequences of being underinsured are substantial for people and families. While some may postpone a surgery or try to take fewer pills than their doctor recommends, others might pay for needed care but end up with low credit ratings as they skimp on their mortgage payments or electric bills. Still others declare bankruptcy.
The good news is that health care costs have been growing more slowly recently.
Moreover, the ACA and other initiatives are testing new ways of making the health care system work smarter that may help to contain costs further.
Employer premiums are also growing more slowly — only up 4.1 percent a year between 2010 and 2013 compared to the average 5.1 percent they grew annually between 2003 and 2010. However, so far, those costs slowdowns haven’t been passed along to workers in the form of higher wages or lower health care costs.
Without substantial wage growth, in order for things to improve for working people and families, health insurance plans will have to be designed to cover the health care that people need and ensure that care is affordable.
While the ACA has laid the groundwork for more comprehensive health insurance coverage in the U.S., policymakers, insurers, health providers, and employers will need to continue to build on it to ensure all of us can get the health care we need.
