Will Americans' fear of high medical bills hinder Coronavirus containment?

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On Wednesday, I noted that the high out-out of pocket costs that most insured Americans under age 65 are exposed to might deter people who contract the Coronavirus (or suspect they may have contracted it) from seeking treatment.

In employer-sponsored insurance, the average single-person deductible in 2019 was $1,655, according to the Kaiser Family Foundation. 28% of covered workers had a single -person deductible over $2,000.  The median annual maximum out-of-pocket (MOOP) limit (after which the plan pays 100% of covered expenses) was $4,000 (the maximum allowable is $8,100). About two thirds of employer plans require coinsurance for inpatient hospital stays, averaging 20%.

Today, Sarah Kliff reports that an American father and daughter who were subject to mandatory quarantine when they returned from Wuhan province in China were also subject to two mandatory stays in an isolation unit at a nearby children's hospital after the child was heard coughing. After release, "they found a pile of medical bills waiting: $3,918 in charges from hospital doctors, radiologists and an ambulance company."  The father's employer provided health coverage in China, where he had been working, but does not provide it in the U.S.

For high out-of-pocket costs in employer plans, 3 shock absorbers

The Kaiser Family Foundation's annual Employer Health Benefits Survey was released this week. There are no big surprises. Premium growth remains relatively modest compared to the immediate pre-ACA era - 3% for single coverage and 5% for family -- though still outstripping wage growth. The percentage of workers covered by employer insurance is stable, as is total ESI enrollment, at 152 million. 79% of workers are offered coverage, and 76% take it up -- similar to last year.

Kaiser does emphasize continued rapid growth in deductibles: the average annual deductible has increased 53% in five years. That's a proxy for out-of-pocket costs continuing to rise. Here I want to quickly point out three partially mitigating factors.

1. Increase in HSAs and HRAs (Section 8) - the percentage of workers who hold these accounts dedicated to paying medical expenses, which are linked to high deductible health plans (HDHPs), spiked from 20% in 2014 to 29% in 2016 and has stayed at that higher level. Since employers generally fund these accounts, they partly offset high deductibles while also shrinking the employee's premium. In 2018, the average employer contribution to an HRA for a single person plan, $1149, outstripped the average employee share of the premium, $1142, and covered about half the average deductible, $2245. The average contribution to an HSA, $603, covered more than half the employee's average premium share, $1024, and about a quarter of the deductible. For family coverage, the average HRA employer contribution was $2288, and the average HSA contribution was $1073. HRA contributions are bigger because these accounts are "use it or lose it" for the employee -- whereas an employee owns an HSA, and contributions are tax-sheltered.

The Times wrestles with ACA re-enrollment; I call some fouls

To a point, New York Times healthcare writers (see byline below) did a good job explaining the complexities of the renewal decision facing many buyers of health plans on the ACA exchanges for 2014. But I have three beefs with the front-page presentation.

The first is in the headline (not the reporters' responsibility). The lead that follows clarifies the problem -- but for many, of course, the headline shapes perception:

Cost of Coverage Under Affordable Care Act to Increase in 2015
By ROBERT PEAR, REED ABELSON and AGUSTIN ARMENDARIZ NOV. 14, 2014

WASHINGTON — The Obama administration on Friday unveiled data showing that many Americans with health insurance bought under the Affordable Care Act could face substantial price increases next year — in some cases as much as 20 percent — unless they switch plans.

Unless they switch plans is the key. For the 85% of buyers who qualify for federal subsidies, their costs will not go up at all if they buy the benchmark second-cheapest Silver-level plan, or a cheaper plan -- except insofar as their income rises. Their share of the premium is a fixed percentage of their income. In fact, if their income is flat they may qualify for higher Cost Sharing Reduction (CSR) benefits, since the formula for determining those benefits is adjusted yearly for inflation.

Whaddaya mean, you didn't know about the subsidy? --Improving healthcare.gov

Once healthcare.gov stopped crashing, how successful was it in transmitting the most basic information to most users -- how much they'd be likely to pay in monthly premiums, and how much in out-of-pocket costs they'd be on the hook for?

My sense from late December on was that the website's shop-around feature, enabling a user to get that basic information without registering or applying, worked reasonably well. I used it all the time to check premiums, deductibles and maximum out-of-pocket (OOP) costs for different ages, income levels and locations. You need to enter about eight pieces of information, including state and county, household size, household members' ages, and household income, to get a listing of available plans, ranked lowest premium to highest, and sortable by metal tier. Each plan summary clearly lists what you'll pay in premium, deductible and OOP max (if your income estimate is accurate). Cost Sharing Reduction (CSR) subsidies lowering deductibles and OOP, available to those earning under 250% of the Federal Poverty Level, are figured in.

And yet, many people who tried to use the site came away with no idea how much they would need to pay -- that is, how big a premium subsidy they eligible for, let alone CSR, or even that they were eligible for subsidies at all. A McKinsey study found that 72% of the respondents who reported that they shopped but did not buy were subsidy-eligible, and that 66% of subsidy-eligible respondents who cited perceived affordability as the reason they stopped shopping were aware of neither their eligibility nor the amount for which they were eligible. Their plight is illustrated by the tale of a newly retired Philadelphia cop who went online and concluded that insurance would cost her $800 per month, -- missing the subsidy that reduced the premium to $135.

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.

OOPS! Don't forget the lower-profile Obamacare subsidies

Robert Laszlewski, one of the better-informed of the Affordable Care Act's relentless critics, doubts the law's sustainability based mainly on one much-reiterated premise:

The biggest flaw is that the product the Obama administration is trying to sell to consumers is not the product people want to buy.

By that he means that there are millions of people (like himself) who are forced to subsidize insurance for the sick (who can no longer be charged more based on their medical condition) or the relatively old (who can now be charged a mere three times more than the youngest plan members, rather than up to five times more, as was common pre-ACA) -- or to buy coverage for services they don't want, such as childbirth or mental health or substance abuse treatment.

It's true that some people in those categories will pay more for insurance on the individual market under the ACA than they did previously, though probably for only a short period (historically, most people buying insurance in the individual market  have not stayed long).  But I don't think they will affect the law's long-term viability by fleeing the market in droves -- because there probably are not droves of them.

Despite prices and deductibles that can look daunting to, say, healthy subsidy-ineligible 27 year-olds, a majority of people who lack access to employer-sponsored insurance are likely to be satisfied with their ACA options.  Two large categories are likely to be satisfied: the subsidized, and those whose household includes someone with a preexisting condition.

Bette in Spokane has some genuine pain (probably. Or maybe not...see updates)

[multiple updates, through 2/3/14]

Yes, the brief "ACA victim" story that Rep. Kathy McMorris Rodgers (R-Wa) inserted in her response to the State of the Union address was cherry-picked and misleading. The pain that the ACA inflicted on the couple in question was exaggerated. But it was probably real. They are in the relatively small subset of Americans who may fare worse under the ACA than under the pre-ACA status quo.

Here is the tale that Rodgers told:

Not long ago I got a letter from Bette in Spokane, who hoped the President’s health care law would save her money – but found out instead that her premiums were going up nearly $700 a month.

Reporter David Wasson of the Spokesman-Review tracked Bette down and learned that she is hostile to the ACA ("I wouldn't go on that Obama website at all") and did not check out her options on the exchange. The $700 difference was between the plan she and her husband carried in 2013 and the plan their insurance company offered in replacement. Here are the basics: