I’m insured, so isn’t that enough? What does “under” insured mean?
About two-thirds of insured people have their medical expenses covered adequately, given their other financial resources. But increasingly, insurance plans require very substantial out-of-pocket spending. This includes the deductible (what the insured person pays before insurance kicks in) and cost-sharing (what that person contributes even when a service is covered). Deductibles are $1000 - $10,000 (see examples in table), and cost-sharing could be 20% of charges. In addition, there are monthly premiums and payments for out-of-network care. When out-of-pocket costs are high compared with a family’s income — more than 5 to 10% — that’s “underinsurance.”
People who are underinsured often delay or skip needed doctor care or medicines, and may rack up large medical debts. These problems are a bit less frequent than for uninsured people, but they’re serious. Underinsurance increases the risk of dying, leading to 10,000–15,000 added deaths per year in the U.S.
How big is the problem?
In 2010 19% of adults with job-based insurance were underinsured. In 2020 this is up to 28%. About 44 million adults are underinsured. Underinsurance is more common in people who are poor or near-poor, or who are sick. All this causes delayed or skipped care and financial problems for at least 25 million people.
For COVID-19, some insurers offered to eliminate out-of-pocket costs for illness caused by the virus. But it doesn’t work well: if someone gets sick with both COVID and another disease, like diabetes, that provision may not apply, and the sick individual has to pay thousands of dollars. Further, most plans are dropping the special COVID provision.
Why are there more under-insured now? Did Trump affect this?
The number of underinsured increased since 2010 for two reasons — high deductible plans were already on the rise, and the Affordable Care Act promoted these plans on the insurance exchanges. The ACA plans have an annual cap on out-of-pocket spending (typically $11,000). Trump made the problem a bit worse by allowing more policies without this cap.
What does Biden propose?
Biden proposes decreasing cost-sharing in the Affordable Care Act exchanges, by designating lower deductible “gold” plans as standard for lower income families. The “public option” he proposes would have a no deductible choice, and the Medicare eligibility expansion down to age 60 would have modest deductibles. He proposes capping drug costs to individuals in Medicare, and permitting the government to negotiate lower drug prices with pharmaceutical companies. Biden proposes higher premium subsidies on the ACA exchanges, and ending unregulated temporary insurance plans.
Does the choice of President matter?
A second Trump administration would moderately increase the number of underinsured by loosening insurance rules. If Trump’s lawsuit to end the Affordable Care Act succeeds, the number of underinsured (and uninsured) would rise more substantially. A Biden administration would reduce the number of underinsured by nearly half (see figure). This could save 5,000–7,500 lives, and reduce medical debt and bankruptcy.
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