This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Got health insurance? That doesn’t mean you’ll be able to pay your medical bills.
By John Murawski
McClatchy DC Bureau, March 4, 2017
Hospitals around the country are reporting record levels of debt on their books from an unlikely source: patients with health care coverage.
As health insurers and employers have shifted health care costs to patients through high deductibles and other out-of-pocket expenses, people who in the past may not have worried about paying for a hospital visit or a surgical procedure are getting hit with massive medical bills that they can’t pay.
Duke University Health System has seen patient interest-free payment plans rise from $19 million in June 2010 to $43 million in January. The increase is largely attributable to rising deductibles, said Keith Stover, Duke’s vice president of finance and chief financial officer.
Duke is fielding 1,500 patient calls a day, most of them asking why they got a bill since they’re insured, Stover said.
WakeMed Health & Hospitals also is experiencing a spike in patients needing help, setting up an average of 1,810 payment plans per month since October.
Wake Forest Baptist Medical Center in Winston-Salem, North Carolina, started offering zero-interest loans through Commerce Bank in November in response to patient deductibles as high as $14,300.
Southeastern Regional Medical Center in Lumberton, North Carolina, in December began assigning “financial counselors” to patients’ rooms to explain insurance benefits and payment options.
Duke Health’s 225 financial counselors contact patients before their scheduled procedures to discuss insurance benefits and payment options; every Duke clinic now has a full-time financial counselor on staff to work with patients.
UNC Health Care has 200 financial counselors to assist patients. “It’s going to be our responsibility to collect,” said Mark Miller, chief financial officer of UNC Health Care in Chapel Hill, North Carolina. “So much is getting left on the table because we can’t get it from the patient, or because they have chosen not to pay it, or they can’t.”
Republicans in Congress have been unable to coalesce around a single proposal to replace the ACA. But their proposals so far could drive up deductibles by lifting the ACA mandated cap on the out-of-pocket costs patients have to pay.
Consumer advocates say the high deductible trend is unsustainable. “They can be a barrier to care for people,” said Mark Rukavina, principal, Community Health Advisors, a Boston organization that advises nonprofit hospitals on billing, collections and finance.
In a system already tremendously overburdened with administrative excesses, we now have an escalating need for “financial counselors” because of the explosion in medical debt due to the expansion in the use of high deductibles – a tool to protect insurers by slowing the increase in insurance premiums, but at the cost of reducing the financial protection that is the very reason that insurance exists in the first place.
In crafting the Affordable Care Act (ACA) it was recognized that the actuarial value of the plans would have to be decreased (code language for introducing very high deductibles) to keep premiums affordable, and that required fairly generous subsidies and credits for lower-income individuals if they were going to be able to afford health care. But that left moderate-income families exposed to the larger, less affordable deductibles.
What has really increased the need for financial counselors is that employer-sponsored plans – the mainstay of insurance in the United States – have accelerated the adoption of high deductibles with which many working families struggle. It is now a problem in mainstream America. ACA did not directly address the problem of high deductibles in employer-sponsored plans, but it did compound the problem by tightening up on insurance regulation and design. Without higher deductibles, the premiums for employer-sponsored plans would have been driven up even higher.
So ACA made the problem of high deductibles worse. What about the Republican replace proposals? We will find out this week, but it doesn’t look good. The exchange plans will probably have a less generous tax subsidy, making plans less affordable for lower-income individuals. There will also likely be reduced regulatory requirements for private insurance, allowing them to market plans with lower premiums, but that will shift even more costs to individuals and families through yet higher deductibles and other cost sharing and through a reduction in plan benefits – requiring greater out-of-pocket spending.
So what are we getting? Exactly what we don’t need – more administrative costs in the form of financial counselors who assist us in handling the debt that health insurance was supposed to prevent.
We don’t need this. We should get rid of private insurance and replace it with a well-designed single payer national health program that provides first dollar coverage while containing medical spending through much more patient-friendly policies. We can simply fix Medicare and provide it for everyone.
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