Crisis in health insurance coverage and its affordability

By Sara R. Collins, Munira Z. Gunja, and Gabriella N. Aboulafia
The Commonwealth Fund, August 19, 2020

The survey began on January 14, 2020 — just before the outbreak of the coronavirus pandemic in the United States. We interviewed a nationally representative sample of 4,272 adults ages 19 to 64 about their health insurance coverage through June 5. Despite the severity of the pandemic and the abrupt disruption in economic activity beginning in March, the survey did not find statistically significant changes in coverage from the last time it was conducted in 2018. But it does show a persistent vulnerability among working-age adults in their ability to afford coverage and health care that could worsen if the economic downturn continues.

Survey Highlights

• In the first half of 2020, 43.4 percent of U.S. adults ages 19 to 64 were inadequately insured. This is statistically unchanged from the last time we fielded the survey in 2018.
• The adult uninsured rate was 12.5 percent. In addition, 9.5 percent of adults were insured but had a gap in coverage in the past year and 21.3 percent were underinsured. These findings are also statistically unchanged from 2018.
• There was no statistically significant change in coverage inadequacy between the months leading up to the pandemic and the months that followed, but this may change as the pandemic continues.
• Half of adults who spent any time uninsured or who were underinsured reported problems paying medical bills or said they were paying off medical debt over time. A quarter of those who were continuously insured and did not meet the threshold for underinsurance also reported problems paying bills.
• People who reported problems paying medical bills experienced lingering financial problems including damage to their credit ratings and depleted savings.

Conclusion and Policy Implications

The United States entered the pandemic with 30 million uninsured people and more than 40 million underinsured. These numbers are certain to climb this year. The Congressional Budget Office projects that the U.S. economy will contract by more than 5 percent in 2020 and 25 million fewer people will be working in the third quarter of 2020 compared to the end of 2019. The Urban Institute estimates that this employment disruption will leave 3.5 million more people uninsured by the end of the year. And millions more will suffer income loss through furloughs, wage cuts, and declining business revenue. Unless there is a significant drop in premiums and deductibles in private coverage, many households will face health care costs that take up a growing share of shrinking budgets.

Coverage insecurity will leave people with mounting medical debt, as well as significant financial barriers to getting the health care they need to survive the pandemic and lead healthy and productive lives. Several policy options at the federal and state levels could move the nation toward universal, comprehensive coverage and provide relief to U.S. families. These include:

• Expanding Medicaid in the 12 states that have yet to do so or providing a federal fallback option for people eligible in those states;
• Enhancing and extending the ACA marketplace subsidies both for premiums and cost-sharing;
• Allowing more people with unaffordable employer plans to purchase subsidized coverage through the marketplaces, possibly through a public plan;
• Increasing outreach and enrollment efforts to inform people of their coverage options, particularly those who lose employer coverage;
• Banning non-ACA-compliant plans like short-term policies that leave people exposed to catastrophic health care costs;
• Developing an autoenrollment mechanism that will enable people to enroll and stay enrolled in comprehensive coverage.

There are other paths to universal coverage and improved affordability, like a single payer or “Medicare for All” approach. The reforms outlined here don’t preclude such a path but could be a practical first step toward a more regulated insurance system that includes more public financing. But ongoing policy inaction on insurance coverage combined with the raging pandemic is certain to tip the nation’s health care affordability problems into crisis for U.S. households.

https://www.commonwealthfund.org…

Comment:

By Don McCanne, M.D.

It looks like we’re stuck in that time machine: tens of millions uninsured, tens of millions more underinsured, and pervasive personal financial hardship.

The authors do propose a set of incremental patches that would expand coverage, though the system would still fall far short of covering everyone, plus the proposed measures would lessen financial hardship for some but by no means for all. The authors note that these reforms would not preclude single payer Medicare for All, but these steps would significantly increase our national health expenditures while falling far short of our goals for reform. Notably, they would further increase the administrative complexity which is the largest source of wasteful health care spending in the U.S. Also such reforms would allow our public stewards to walk away once again for another decade or two without enacting and implementing the reform we desperately need – single payer Medicare for All. This would perpetuate the financial hardship, physical suffering and even death from our uniquely American health care financing system that is so highly dysfunctional.

What are we going to do? Continue to receive these disconcerting reports, tsk tsk them, and put them in the files? Aren’t our files full enough already?

Incidentally, we have some files over at PNHP that we can pull out. Affordable, equitable, efficient, comprehensive care, for everyone, automatically, for life, without all of the administrative waste and without personal financial hardship. Might require a touch of social solidarity, but what on earth would be wrong with that?

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