When a heavily subsidized private health plan doesn't quite suffice

The Times' Abby Goodnough reported this past weekend that many hospitals have cut back on charity care, hoping to push uninsured patients into subsidized ACA coverage.  Some hospitals are targeting new payment requirements at specific groups eligible for coverage (e.g., those with incomes between 200% and 400% of the Federal Poverty Level), and some are requiring co-pays from the newly insured.  In the latter category, Goodnough spoke to one woman whose current situation points toward complex choices and tradeoffs spurred by the new law.

Here's the tale:

Beverly Jones, 51, of St. Louis, who has lupus, is the type of person targeted by Barnes-Jewish Hospital’s new policy. Ms. Jones, who already owes Barnes-Jewish thousands of dollars for emergency room treatment and other visits, said the hospital’s new co-payments for the uninsured would “throw my budget into a tailspin” on her annual income of $13,400, which comes mostly from disability checks.

She has enrolled in a subsidized insurance policy under the Affordable Care Act. But she worries that she will have trouble paying the fees and deductibles required under her new plan, even with generous subsidies.

“There’s still a lot of stuff I can’t afford to do,” she said.

This caught my because at an income of $13,400, Ms. Jones is eligible for the maximum level of Cost Sharing Reduction (CSR) under the ACA (if Missouri had accepted the Medicaid expansion, she would be eligible for that). At maximum CSR, any silver plan she chose would have a mandated actuarial value of 94%, equivalent to the best employer-sponsored plans. Her out-of-pocket expenses would not be negligible at her income level, but they would be quite low.

I checked out what's available on the silver level for someone at Ms. Jones' income level in St. Louis.  There are several Anthem Blue Cross plans, with deductibles ranging from $150 to $650, out-of-pocket maximums from $500-$650, and premiums from $22 to $56 per month. What I suspect Ms. Jones chose, however, was the cheapest silver plan on the exchange: a Coventry Silver $10 Copay PPO. At her income level, this plan has a monthly premium of zero, a deductible of zero, free primary care physician visits, generic drug copays of just $5, and emergency room copays of $100. It's a Preferred Provider Organization to boot, which suggests relatively broad choice of doctors and hospitals. It is by any ordinary measure a great deal.

There's a tradeoff, though. The annual out-of-pocket maximum (OOP) is $1,500 -- a small fortune if you're living on  little more than $1,000 per month. An inpatient hospital visit has a 10% copay -- great by commercial standards, but enough to max out on the OOP if you spend significant time in the hospital. Specialty drugs, which I imagine a patient with lupus might require, have a 20% copay. Preferred brand drugs are a $30 copay, nonpreferred brands, $55. Corticosteroids, which are often indicated for lupus, are mostly tier 3, a $55 copay. Ditto for the antimalarial chloroquine

Abby Goodnough told me by email that Ms. Jones did choose a Coventry plan, though she did not have the details. I hope the plan described above is the one Ms. Jones chose. Coventry has another silver plan that would cost her $81 per month, which would seem to be out of reach -- and it offers no advantage readily discernible online. She could enroll in a bronze plan only by mistake, as doing so would disqualify her for CSR, and the premium on the silver plan described above can't be improved on, as it's zero for Ms. Jones.

The cheapest Coventry silver plan would seem to be a good choice for Ms. Jones. If she maxes out on the out-of-pocket costs, though, this plan could cost her about $700 more than the cheapest Anthem Blue Cross plan, which has a $500 OOP max and a $23/month premium. At her income level, according to the formulae used by the ACA's drafters, she should be on Medicaid, which usually means no out of pocket costs. That's what conservatives hate about Medicaid. But that's what's appropriate at really low incomes.

Update: via Twitter, Max Fletcher reminds me of an Aaron Carroll Upshot piece recounting studies that show that copays deter people with chronic conditions from getting needed care. Here's the, um, upshot:
It doesn’t have to be this way. In France, co-pays are set by levels of sickness. Those who have chronic conditions have all of their co-pays waived. Even Singapore, beloved among conservative health care wonks because of its reliance on cost-sharing, makes exceptions for many with chronic illnesses. The rules do so explicitly to encourage them to seek care.

In the United States, we have adopted a system where those who use the most care pay the most out of pocket. That may seem “fair” in some way, but cost-sharing isn’t about fairness. It’s about reducing health care spending without negatively affecting health outcomes. It should be a scalpel. We’re using it like a club.

Also related: this morning, Adrianna McIntyre reports on research showing that even small premiums deter low income people from signing up for Medicaid.