Why More Health Coverage Does Not Necessarily Mean Less Uncompensated Care
April 02, 2015
Health coverage and uncompensated care are opposing forces, right? As the number of people with coverage goes up, the need for hospitals to provide charity care or cover unpaid patient bills goes down. Or will high deductible health plans disrupt the natural order of things?
Last week, the federal government reported that hospital uncompensated care nationwide fell 16 percent during 2014.
That’s welcome news—but let’s not break out the champagne just yet. Too many newly insured Americans proudly hand over their insurance cards to health care providers—only to find large deductibles standing between them and their health coverage.
As Moody’s Investors Service puts it, “Today’s high deductible is tomorrow’s bad [patient] debt.” A look at those who enroll through the marketplace and the plans they choose helps explain why:
- About 80 percent of the nearly 12 million Americans who get their insurance through the marketplace need subsidies to make that coverage affordable.
- About 85 percent of marketplace enrollees purchase less expensive silver and bronze plans with lower monthly premiums, but more consumer cost-sharing, than gold or platinum plans.
- The deductibles for these plans are high, especially for people and families with little disposable income. During 2014, the average deductible for a bronze plan was more than $5,000 for an individual and nearly $10,390 for a family. Silver plans had deductibles of nearly $3,000 for an individual and more than $6,000 for a family.
Add to this picture Kaiser Family Foundation’s recent findings: about half of working adults who have commercial health coverage of any kind (through the marketplace or their employers) lack the savings to pay deductibles of $2,500 (individual) or $5,000 (family).
In other words, many Americans have trouble paying deductibles less formidable than those offered by the marketplace’s popular silver plans. As a result, many Americans who finally have health coverage are nevertheless in for sticker shock if they get sick.
Hospitals will, of course, provide the best possible care for these patients. Increased uncompensated care will be the likely byproduct.
The impact of high deductibles on hospital uncompensated care and consumer behavior bears watching. The most unfortunate unintended consequences would be those to overall health and well-being.
Consumers might skip routine checkups and preventive care out of fear of their deductibles— even though the Affordable Care Act requires all health plans to cover the cost of preventive care, without any cost sharing, for these important services.