How prevalent is underinsurance among ACA beneficiaries?

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Big rain, small umbrella

In a New York Times op-ed Aaron Carroll, a physician and highly reliable assessor of data (his Bad Food Bible sifts expertly through a lot of bullshit in dietary research) makes two incontrovertible points about U.S. healthcare:

1. Americans are burdened with uniquely high out-of-pocket costs that induce us to forego need as well as unneeded care.

2. The ACA partly replicated this gaping flaw in our healthcare system, inflicting ridiculously high deductibles and out-of-pocket maximums on a significant number of marketplace enrollees.

But the argument includes what I regard as a slight (and common) distortion of emphasis in his overview of marketplace enrollees' high out-of-pocket costs: 

The average deductible on a silver-level plan on the A.C.A. exchanges rose to $4,500 in 2021. If people tried to buy plans with a lower premium, at a bronze level, the average deductible rose to more than $6,000. Granted, some cost-sharing reductions are available for those who make less than 250 percent of the federal poverty line, but even after accounting for those, the average deductible was more than $3,100 for silver plans.

Even with balance-billing protection, a tiered network may cause tears

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My last post involved a close look at the severely tiered provider network in the silver plans sold in the ACA marketplace by Independence Blue Cross, the dominant insurer in Philadelphia and southeastern Pennsylvania.  On a second look, a thought occurred to me: tiered networks that place go-to hospitals in higher tiers put an asterisk of sorts on balance-billing protections for emergency care, including those due to come online nationally when the No Surprises Act takes effect on January 1.

Under the No Surprises Act, emergency care is billed at in-network rates whether or not the hospital or facility is within the provider network of the patient's health plan. But what exactly is an "in-network rate" in a tiered network? Depends on the tier.

Independence's HMO plans sold in the ACA marketplace have three tiers. Its second-cheapest silver offering on Pennie, Pennsylvania's ACA exchange, the Keystone HMO Silver Proactive plan, posts a deductible of $0. But that's in Tier 1 only. For enrollees with incomes too high to qualify for Cost Sharing Reduction (CSR),* Tiers 2 and 3 have a deductible of $6,000 for an individual and $12,000 for a family. 

Trump healthcare reruns: Graham-Cassidy and the Sundowning Kid

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April Fool! Trump is once again promising an ACA replacement with low premiums and low out-of-pocket costs.

The cost of ObamaCare is far too high for our great citizens. The deductibles, in many cases way over $7000, make it almost worthless or unusable. Good things are going to happen! @SenRickScott @senatemajldr @SenJohnBarrasso @SenBillCassidy

— Donald J. Trump (@realDonaldTrump) April 1, 2019

It's coming along great:

The president brought up healthcare again on Friday, claiming he would have a “much better” plan than Obamacare. “The health care’s going very well,” he told reporters in Florida.

Takes a person back...to, say, Jan. 15, 2017

President-elect Donald Trump said in a weekend interview that he is nearing completion of a plan to replace President Obama’s signature health-care law with the goal of “insurance for everybody"...

Trump said his plan for replacing most aspects of Obama’s health-care law is all but finished. Although he was coy about its details — “lower numbers, much lower deductibles” — he said he is ready to unveil it alongside Ryan and Senate Majority Leader Mitch McConnell (R-Ky.).

“It’s very much formulated down to the final strokes. We haven’t put it in quite yet but we’re going to be doing it soon,” Trump said.

ACA afflicted by a deductible cliff

The Atlantic's Olga Khazan recently went to Trump country in central Pennsylvania, near Harrisburg, and asked people what they thought of the Affordable Care Act.  A lot of the not-poor were resentful about the Medicaid expansion. Here's the owner of a hair salon who earns too much to qualify for a marketplace subsidy and is old enough to pay near-peak premiums:

Things got even worse for her this year, when several insurers pulled out of Pennsylvania’s Obamacare exchange, leaving her with just a few options, she said. Now, she pays $655 a month, and her deductible is $10,000. “Welcome to my shoes,” she said...

Health insurance in the U.S. is deteriorating, Kaiser survey indicates (to me)

[UPDATED, 5:15 p.m.: part of the drop in enrollees' ratings of their plans in 2016 may be due to who's buying the plans rather than what's on offer. See note at bottom.]

The Kaiser Family Foundation released its latest survey of enrollees in the individual market for health insurance today, which also includes some data on enrollees in employer-sponsored insurance (ESI). While majorities still report themselves satisfied with their health plans, the results suggest that health insurance is deteriorating, in ESI as well as in the individual market.

The comparisons provided with results from 2015 and 2014 tell a simple story. Deductibles and cost-sharing are on the rise, so people have more trouble paying their bills, are more often surprised by what their plans don't cover, more often go without needed care, and are therefore less satisfied with their plans. This is all true in employer-sponsored insurance as well as in the individual market, though satisfaction in ESI starts from a higher baseline.*

Data on deductibles brings the overall picture into focus. In the individual market as a whole, more enrollees in low deductible plans report themselves satisfied than those with high deductibles (74% vs. 59% ). The percentage of enrollees in high deductible plans is rising (49%, compared to 36% in 2015 ), and the percentage of those dissatisfied with their plans is also rising (31%, up from 20% in 2015 and 2016). The rise in high deductible plans is proportionate to the drop in reported satisfaction: 66% of all enrollees in ACA-compliant plans report themselves satisfied this year, compared to 74% in 2015.

ACA marketplace: What to watch for in 2016

Larry Levitt tweets core questions for the ACA private market in the coming year:

Key things to watch in health for 2016: 1. Health spending trend. 2. ACA premiums for 2017. 3. Further progress in covering the uninsured.

— Larry Levitt (@larry_levitt) December 31, 2015

That is, will marketplace plans prove affordable to a critical mass of people for whom the nongroup market is the only route to insurance? (The first question has a wider purview.) Regarding the viability of the marketplace, some further questions:

1) Whither narrow networks? For 2017, CMS has tightened the standards for network adequacy, inspiring intense squawking from the insurance industry. More constraint on insurers' ability to exclude expensive providers could put some upward pressure on providers. On the other hand...

HHS embraces high deductibles

It's funny how a trend impinges on your consciousness: you think something is new, then it gradually dawns that it's been going on for some time. Such is the case (for me) with an emerging mode of compensating for the unaffordability of healthcare at U.S. prices.

On Tuesday CMS, apparently stung by news accounts of ACA marketplace customers whose plan deductibles were so high they found care inaccessible, put up a blog post touting many plans' provisions of some services that are covered before the deductible is reached:

On Thursday, I took a look at the benefit structure provided by Centene's Ambetter, an insurer that has "cornered the silver market" in several large cities, including Miami, Chicago and Seattle. Ambetter plans feature high deductibles and a relatively broad array of services offered beneath the deductible:

A month of "yes buts"

For some reason, in the past month or so I've found myself pushing back against, or at least qualifying, assertions about the ACA by people with deep expertise in healthcare, or economics, or healthcare economics. They all know a good deal more than I do, but touched on areas that I've been preoccupied with.

These posts aim to put a corrective lens on...not myths, but partial truths that in some cases leave a misleading impression. Specifically:

"Are marketplace plans affordable?"

Last week the Commonwealth Fund released a report* comparing the experiences of people who bought health plans in the ACA marketplace to that of people who get health insurance through their employers. Commonwealth surveyed nearly 5,000 adults between March and May of this year, asking questions about their income, their insurance status, plan features, usage and affordability.

With respect to out-of-pocket costs, here's the top-line takeaway as framed in the Commonwealth press release:

Overall, larger shares of adults with marketplace plans had per-person deductibles of $1,000 or more than did those with employer plans (43% vs. 34%). The differences were widest among those with higher incomes: in this group, over half (53%) with marketplace plans had high deductibles, compared to about one-third (35%) with employer plans. In the survey, people with high deductibles were less confident than those with lower deductibles that they could afford needed care.

What's equally salient, in my view, is that the subsidized marketplace has narrowed the longstanding coverage gap between employer-sponsored insurance (ESI) and nongroup market insurance for lower-income buyers. Compare those with incomes under 250% of the Federal Poverty Level (FPL) to those with ESI:

On ACA exchanges, silver is usually not silver

I have a post up on healthinsurance.org that calls out yet another story about high out-of-pocket costs in ACA exchange plans that neglects to mention that 85% of silver plan buyers get Cost Sharing Reduction that lowers deductibles, co-pays, and yearly out-of-pocket maximums.

The story in question is under the auspices of Kaiser Health News, which generally gets its facts right, and there's no literally wrong fact in it. It makes sense, too,  to highlight that silver plans as well as bronze ones can offer pretty skimpy coverage. The lead below is referring to silver plans:

A key goal of the Affordable Care Act is to help people get health insurance who may have not been able to pay for it before. But the most popular plans – those with low monthly premiums – also have high deductibles and copays. And that can leave medical care still out of reach for some.

Indeed it can. But two thirds of silver plan holders (the "most popular plans", as the story subsequently clarifies)  have plans with actuarial values of 87% or 94%.  That doesn't mean that too many ACA customers aren't faced with too-high out-of-pocket costs. But casting silver plans unenhanced by CSR as the silver norm is like citing full retail prices at Macy's (where sales are so pervasive that the folks at the register often won't let you pay full price).

A few thoughts that didn't make it into the post:

Mysteries of underinsurance in the Commonwealth Fund survey

A Commonwealth Fund survey released this week found that among those American adults under age 65 who were insured throughout 2014, 23 percent were underinsured – that is, their deductibles and copays were high enough to cause severe financial strain. That top line is almost unchanged since 2010; the real damage on this front was done from 2005 to 2010, when employers started shifting costs en masse to employees.

I have several questions about the report, to which I'm seeking answers from the authors. If you have any insight, please let me know (email address is in profile to right).

In the questions below, please keep in mind Commonwealth's definition of underinsured: 1) total out-of-pocket costs exceed 10% of annual income, or 5% if the person's household income is under 200% of the Federal Poverty Level (FPL), or 2) the plan deductible exceeds 5% of the beneficiary's annual income.

1. While deductibles in employer-sponsored plans continue to rise, most notably among those with less than 100 employees, the underinsurance rate actually dropped among large employers from 2012 to 2014, from 16% to 14%.  In the same period, the percentage of large-firm employees whose deductible exceeded 5% of annual income rose from 6% to 8%.  What's offsetting that rise in the ranks of those whose deductibles alone classify them as underinsured? Do the free preventive services mandated by the ACA play a role? Or rather, since "the out-of-pocket cost component of the measure is only triggered if a person uses his or her plan," could reluctance to use (and pay for) any medical services be inhibiting the underinsured total?

2. More generally, , among all insured Americans under age 65, Commonwealth finds an increase of 7 million since 2010 in those whose deductibles qualify them as underinsured, but a net increase in underinsureds of only 2 million . Again, something seems to be offsetting the relentless rise in deductibles. Since 2010,

Forecast: A lot more Pennsylvanians will buy bronze plans in the ACA marketplace in 2015 than in 2014

Here's a prediction: the percentage of ACA private plan buyers in Pennsylvania who select bronze plans -- the lowest metal level, with the lowest monthly premiums and the highest deductibles -- is going to shoot up in 2015.

In 2014, among states with the lowest percentages of bronze plan buyers in the ACA marketplace, Pennsylvania was something of an anomaly.

Instead of adding copper plans to the ACA marketplace, enhance bronze

One of the relative successes of the ACA's first open season is the high rate at which private plan buyers who were eligible for Cost Sharing Reduction (CSR) subsidies, which attach only to silver plans, did in fact choose silver.

In so doing, they resisted the temptation to pay far less per month for bronze plans, which carry sky-high deductibles and out-of-pocket maximums, unsoftened by CSR. As I've noted before, in the federal marketplace only 15% of buyers eligible for any kind of subsidy (including those who earn too much for CSR) bought bronze plans.

That's kind of surprising, since the premiums for silver plans are quite high for those in the middle income range of CSR eligibility. For a 44 year-old earning $23,000 per year, the benchmark second-cheapest silver plan in 2015 will cost $118, and the cheapest silver is usually only a few dollars cheaper.  The cheapest bronze plan price for this 44 year-old varies widely by state and county, falling most commonly in the $50--$75 range. That price spread between bronze and silver widens with age; a buyer in her 60s at this income level will often pay nothing or next to nothing for a bronze plan, versus the same $118 for silver (the subsidized benchmark price is a percentage of income and doesn't change with age).

I am troubled by the high premiums that low-income people have to pay for silver. $118 per month on an income of under $2,000 per month is quite a swallow. Though paying the extra premium for silver could save the buyer thousands in out-of-pocket medical costs, I'm impressed that so many many had the discipline to do it.  Prompted by a comment by xpostfactoid reader Bob Hertz, I find myself wondering: why do CSR subsidies attach only to silver plans?

Republicans wouldn't scrap the main driver of ACA rate shock

As the reality that millions have benefited from full implementation of the Affordable Care Act takes hold, more and more Republicans are resorting to what Ezra Klein has dubbed Fauxbamacare: propose to repeal the hated law, replace all its popular components without providing any details.

Progressives counter that if you claim you want to make health insurance affordable to all, unless you come out in favor of a single payer system there is no real alternative to the basic structure of the ACA: guaranteed issue (that is, no variation in health plan price based on a person's medical history), an individual mandate or equivalent* to offset the influx of sick people into the risk pool, and subsidies (or Medicaid) for those who can't afford the premiums.

While that's mostly true, it's also true that some plans crafted to current conservative specs look significantly if not radically different from the ACA. The vast majority of Republican elected officials have shied from putting forward such a plan -- or ignored the one put forward by Senators Coburn, Burr and Hatch --  since such alternatives require tough tradeoffs. The main difference is that conservative schemes give insurers more leeway to sell plans with skimpier benefits and lower premiums. They eliminate or vastly reduce the Essential Health Benefits (EHBs) mandated by the ACA. They loosen the allowing "age banding" of premiums -- the degree to which older buyers can be charged more than younger ones -- from the ACA-mandated 3-to-1 to the pre-ACA norm of 5-to-1.

It's true that for healthy people who were buying insurance in the individual market prior to the ACA, the law's coverage rules substantially drove up the premium price. Rate shock is a real phenomenon. As the complaints poured forth, the EHBs were a prime attack point.  "I'm 55 -- I don't need childbirth coverage." "I'm of sound mind -- I don't need mental health coverage."  Limited age-banding was also a rallying point, since the 5-to-1 ratio was based on actuarial calculations.  Why should a 23 year-old pay more so that a 58 year-old can pay less?

These complaints have some legitimacy. The EHBs and age-banding limits involve tradeoffs that can be argued from either side. But they are not the prime drivers of the rate hikes caused by the ACA.

Between Scylla and Charybdis in a hospital bed

The Commonwealth Fund is out with a report*suggesting that the ACA has the potential to reduce the substantial ranks of the nation's underinsured -- those who currently either spend a percentage of their incomes on premiums deemed unaffordable by ACA formulas or who are exposed to out-of-pocket medical expenses high enough to deter them from getting needed care. Jonathan Cohn overviews the core conclusions here.

While affirming that ACA benefits are well-targeted at those likeliest to be underinsured, the report also highlights ways in which the ACA's Qualified Health Plans  (QHPs) may also underinsure -- chiefly via the high deductibles and out-of-pocket cost limits prevalent in bronze plans, selected thus far by 19% of QHP buyers. That much was not news to me. But then the report flagged another underinsurance hazard that brought me up short -- and brought a memory flash. My emphasis below:

In which Ezra Klein shorts Avik Roy

ACA supporters are naturally ticked off that conservatives are now carping at the high deductibles and out-of-pocket maximums in many ACA insurance plans, most notably the bronze ones. Ditto for "narrow networks" -- a limited choice among doctors and hospitals.  The Dish has a precis of complaints from Jonathan Chait, Jonathan Cohn, Kevin Drum and Ezra Klein. Here's Ezra:

What's confusing about this line of attack is that high-deductible health-care plans -- more commonly known as "health savings accounts" -- were, before Obamacare, a core tenet of Republican health-care policy thinking. In fact, one of the major criticisms of Obamacare was that it would somehow kill those plans off. "Obamacare may be fatal for your HSA," warned the Heritage Foundation on 2010. "Health Savings Accounts Under Attack" blared Red State....

Obama's pledge that "if you like your doctor, you can keep your doctor" is also under fire. The issue here is that insurers entering the competitive health marketplaces are tightening their networks in order to cut costs and improve quality. It's worked: Premiums in the marketplaces are far lower than was expected when Obamacare passed.

 This, too, is a success for a longtime conservative health-policy idea..."Narrow networks are not some cruel attempt to limit patient choice foisted upon us by the insurance industry," write economists David Dranove and Craig Garthwaite. "Instead, these plans may provide our best opportunity for harnessing market forces to lower prices."

Fair enough. However, when Klein asks his old healthcare sparring partner Avik Roy to explain the apparent hypocrisy, he lampoons Roy's response without engaging its substance, which is perfectly consistent with Roy's longstanding attack line against the ACA. There are, I believe, internal contradictions in that attack line, and Klein has dealt with them elsewhere. But not here:

WSJ hits ACA from the left

Good reporters at the Wall Street Journal continue to bust the ACA's chops.  The likes of Louise Radnofsky, Amy Schatz, Timothy Martin and now Leslie Scism, who's been covering insurance for at least 15 years (and is also a news editor), are not going to get their facts wrong. But it remains fair to wonder whether the Murdoch-era news editorial regime is shaping the stories' emphasis [UPDATE: I have spoken to someone at the Journal, whose word I trust, who assures me that editors area not imposing a political agenda on reporters. I regret speculating about motive without information.]

Today, Scism and Martin spotlight something that has in truth troubled me as I explore offerings on HealthCare.gov and ValuePenguin:  the prevalence of high deductibles, particularly in bronze plans:

As enrollment picks up on the HealthCare.gov website, many people with modest incomes are encountering a troubling element of the federal health law: deductibles so steep they may not be able to afford the portion of medical expenses that insurance doesn't cover.
The average individual deductible for what is called a bronze plan on the exchange—the lowest-priced coverage—is $5,081 a year, according to a new report on insurance offerings in 34 of the 36 states that rely on the federally run online marketplace.