High cost deductibles crippling middle class
Coverage requires workers to pay so much that
many just skip visits to doctor
By Laura Ungar and Jayne O’Donnell
Physician Praveen Arla is witnessing a reversal of health care fortunes: Poor, long uninsured patients are getting Medicaid through Obamacare and finally coming to his office for care. But middle-class workers are increasingly staying away.
“It’s flip-flopped,” says Arla, who helps his father run a family practice in Hillview, Ky. Patients with job-based plans, he says, will say, “My deductible is so high. I’m trying to come to the doctor as little as possible. … What is the minimum I can get done? They’re really worried about cost.”
It’s a deep and common concern across the USA, where employer plans cover 60% of working-age Americans, or about 150 million people. Coverage long considered the gold standard of health insurance often requires workers to pay so much out-ofpocket that many skip doctor visits, put off medical procedures and ration pills, much as the uninsured have done.
A recent Commonwealth Fund survey found that four in 10 working-age adults skipped some kind of care because of cost. The portion of workers with annual deductibles — what consumers must pay before insurance kicks in — rose from 55% eight years ago to 80% today, according to research by the Kaiser Family Foundation.
A Mercer study showed that 2014 saw the largest one-year increase in enrollment in “high-deductible plans” — from 18% to 23% of all covered employees.
The size of the average deductible more than doubled in eight years, from $584 to $1,217 for individual coverage. Add to this co-pays, co-insurance and the price of drugs or procedures not covered, and it’s all too much for many Americans.
Holly Wilson of Denver, a communication company fraud investigator, recently went without her blood pressure pills for three months because she couldn’t afford them, given her $2,500 deductible. Her blood pressure shot so high, her doctor told her she risked a stroke.
LaRita Jacobs of Seminole, Fla., who gets insurance through her husband’s job and has an annual family income of $70,000, says $7,500 a year in out-ofpocket costs kept her from dealing with an arthritis-related neck problem until it got so bad she couldn’t lift a fork. She finally got treatment in October, but she’s putting off shoulder surgery, opting for less expensive physical therapy and planning to “tough out the pain.”
“How did we get to this crazy life?” asks Jacobs, 54. “We’re struggling to pay our bills like we were struggling when we first got started.”
Why is this happening? Health care researchers point to a convergence of trends building for years: the steep rise in deductibles even as premiums stabilize, corporate belt-tightening and stagnant middle-class wages.
“It’s a case of companies trying to offer workers health insurance and still generate profit,” said Eric Wright, a professor of sociology and public health at Georgia State University. “But whenever costs go up for the consumers … it promotes a delay in care.”
Many doctors contend it’s only a matter of time before the middle class begins crowding ERs. They say putting off care can be dangerous, exponentially more costly and, if it continues, can threaten the nation’s health.
MONITORING THE TREND
Praveen’s father, Mohana Arla, says being forced to pay so much out-of-pocket “is as good as not having insurance” in an era of ever-rising health care costs. Out-of-pocket maximums can easily exceed $10,000 a year for families, and median household income is about $53,000.
“Health expenses tend to come up unexpectedly, or if you have a chronic condition, they come up relentlessly,” says Karen Pollitz, a senior fellow at Kaiser. “People put off care or they split their pills. They do without.”
Research backs that up:
By Laura Ungar and Jayne O’Donnell
Physician Praveen Arla is witnessing a reversal of health care fortunes: Poor, long uninsured patients are getting Medicaid through Obamacare and finally coming to his office for care. But middle-class workers are increasingly staying away.
“It’s flip-flopped,” says Arla, who helps his father run a family practice in Hillview, Ky. Patients with job-based plans, he says, will say, “My deductible is so high. I’m trying to come to the doctor as little as possible. … What is the minimum I can get done? They’re really worried about cost.”
It’s a deep and common concern across the USA, where employer plans cover 60% of working-age Americans, or about 150 million people. Coverage long considered the gold standard of health insurance often requires workers to pay so much out-ofpocket that many skip doctor visits, put off medical procedures and ration pills, much as the uninsured have done.
A recent Commonwealth Fund survey found that four in 10 working-age adults skipped some kind of care because of cost. The portion of workers with annual deductibles — what consumers must pay before insurance kicks in — rose from 55% eight years ago to 80% today, according to research by the Kaiser Family Foundation.
A Mercer study showed that 2014 saw the largest one-year increase in enrollment in “high-deductible plans” — from 18% to 23% of all covered employees.
The size of the average deductible more than doubled in eight years, from $584 to $1,217 for individual coverage. Add to this co-pays, co-insurance and the price of drugs or procedures not covered, and it’s all too much for many Americans.
Holly Wilson of Denver, a communication company fraud investigator, recently went without her blood pressure pills for three months because she couldn’t afford them, given her $2,500 deductible. Her blood pressure shot so high, her doctor told her she risked a stroke.
LaRita Jacobs of Seminole, Fla., who gets insurance through her husband’s job and has an annual family income of $70,000, says $7,500 a year in out-ofpocket costs kept her from dealing with an arthritis-related neck problem until it got so bad she couldn’t lift a fork. She finally got treatment in October, but she’s putting off shoulder surgery, opting for less expensive physical therapy and planning to “tough out the pain.”
“How did we get to this crazy life?” asks Jacobs, 54. “We’re struggling to pay our bills like we were struggling when we first got started.”
Why is this happening? Health care researchers point to a convergence of trends building for years: the steep rise in deductibles even as premiums stabilize, corporate belt-tightening and stagnant middle-class wages.
“It’s a case of companies trying to offer workers health insurance and still generate profit,” said Eric Wright, a professor of sociology and public health at Georgia State University. “But whenever costs go up for the consumers … it promotes a delay in care.”
Many doctors contend it’s only a matter of time before the middle class begins crowding ERs. They say putting off care can be dangerous, exponentially more costly and, if it continues, can threaten the nation’s health.
MONITORING THE TREND
Praveen’s father, Mohana Arla, says being forced to pay so much out-of-pocket “is as good as not having insurance” in an era of ever-rising health care costs. Out-of-pocket maximums can easily exceed $10,000 a year for families, and median household income is about $53,000.
“Health expenses tend to come up unexpectedly, or if you have a chronic condition, they come up relentlessly,” says Karen Pollitz, a senior fellow at Kaiser. “People put off care or they split their pills. They do without.”
Research backs that up:
·
Nearly 30%
of privately insured, working-age Americans with deductibles of at least 5%
of their income had a medical problem but didn’t go to the doctor, a
2014 survey by the Commonwealth Fund found. About the same percentage skipped
medical tests, treatments or follow-ups.
·
Nearly half of middle-class workers
skipped health care services or fell into financial hardship because of
health expenses, according to a survey by the Associated Press and NORC Center
for Public Affairs Research.
·
Use of hospital care among insured
workers has been dropping since 2010, and use of outpatient care, such
as doctor visits, dropped slightly for the first time from 2012 to 2013,
according to the Health Care Cost Institute.
Medical professionals see the reality behind the
research. The Arlas’ patient load used to be 45% commercially insured and 25%
Medicaid; now that’s reversed. Stan Brock, founder of Remote Area
Medical, which runs free clinics around the nation, says the group’s volunteer
workers found that about 7% of patients who came to one of the clinics had
job-provided insurance.Patients often do a sort of medical and financial triage when they get sick. Jacobs says every time a doctor suggests a new test or medication for her arthritis, she asks herself, “Is it critical? You’re always playing the odds.”
Though all out-of-pocket expenses play a role in such decisions, experts say the driving factor is the deductible, which averages $2,000 or more for single coverage for nearly one in five workers and from $2,000 to $4,500 for families.
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