“The current debate over the future of the Affordable Care Act is obscuring a more pedestrian reality. Just because a person is insured, it doesn’t mean he or she can actually afford their doctor, hospital, pharmaceutical, and other medical bills,” Helaine Olen writes over at The Atlantic, in a piece examining charity care and crowdfunding of medical bills. “The point of insurance is to protect patients’ finances from the costs of everything from hospitalizations to prescription drugs, but out-of-pocket spending for people even with employer-provided health insurance has increased by more than 50 percent since 2010, according to human resources consultant Aon Hewitt. The Kaiser Family Foundation reports that in 2016, half of all insurance policy-holders faced a deductible, the amount people need to pay on their own before their insurance kicks in, of at least $1,000. For people who buy their insurance via one of the Affordable Care Act’s exchanges, that figure will be higher still: Almost 90 percent have deductibles of $1,300 for an individual or $2,600 for a family. Even a gold-plated insurance plan with a low deductible and generous reimbursements often has its holes. Many people have separate—and often hard-to-understand—in-network and out-of-network deductibles, or lack out-of-network coverage altogether. … While many plans cap out-of-pocket spending, that cap can often be quite high—in 2017, it’s $14,300 for a family plan purchased on the ACA exchanges, for example. … The most recent Report on the Economic Well-Being of U.S. Households, an annual survey conducted by the Federal Reserve Board, found that 44 percent of adult Americans claim they could not come up with $400 in an emergency without turning to credit cards, family and friends, or selling off possessions. When this reality combines with healthcare bills, the consequences can be financially devastating. A 2015 poll by the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health discovered that 26 percent of those who took part in the survey claimed medical bills caused severe damage to their household’s bottom line. … No surprise, then, that the Consumer Financial Protection Bureau reported earlier this year that medical debt was the most common reason for someone to be contacted by a debt collector. This spending is most pressing for households with the highest medical bills, the 5 percent of Americans who make up 50 percent of the country’s healthcare costs. Medicare, Medicaid, and private insurers will spend $40,375 on average per patient for someone in this group. Their out-of-pocket spending will be much less: on average, $2,582.90. This isn’t, in the scale of things, a lot of money—but given Americans’ straightened personal finances, it’s more than many can easily access. This isn’t, it’s important to point out, a static group. A chronic illness can land someone in this category but, given the increasing prevalence of high-deductible plans, so can something as simple as a broken bone or an emergency appendectomy. Although some people will be in this group year after year, many will cycle in and out, and nearly everyone will be in it for some brief period. The fact is that nearly any illness or injury can lead to unexpected bills, and few are able to absorb those shocks without difficulty. Yet, despite the commonness of such problems, there is little in the way of a system for helping people out through these times.” Helaine Olen, “Even With Insurance, Americans Can’t Afford Their Medical Bills,” The Atlantic.
Jeanne Pinder is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded... More by Jeanne Pinder