The number of uninsured adult Americans rose by around 2.8 percent, or about 7 million people, in the last two years. The uninsured rate now sits at a four-year high of 13.7 percent, according to Gallup polling from the last quarter of 2018, which means around 34 million adults in America lack even a basic health plan.
Concerned about Healthcare Costs
While that number is still relatively low compared to the record high 18 percent uninsured rate back in late 2013, just before the Affordable Care Act marketplaces opened, Americans are expressing continued angst over healthcare costs. And perhaps more concerning than the uninsured rate is the nagging feeling about half of Americans have that they are underinsured.
According to more recent Gallup polling released in early April, 45% of Americans are “concerned that a major health event could result in personal bankruptcy.” And for many, it’s not just a feeling. In the past year, Americans reported borrowing $88 billion to pay their medical bills and withdrawing around $126 billion from their long-term savings and retirement funds.
Increase in HDHPs
One factor leading to the financial uncertainty of patients can be traced back to another trend in US healthcare: the proliferation of high deductible health plans (HDHPs). Although surveys in the past year showed the intention among employers to move away from such plans, a study by the Centers for Disease Control (CDC) released last August showed the opposite. From 2017 to the first quarter of 2018, the number of Americans covered by HDHPs jumped to 47 percent, up from 43.7.
For the CDC survey, a high deductible health plan is defined as “a private health plan with an annual deductible of at least $1,350 for self-only coverage or $2,700 for family coverage,” although some plans have deductibles as much as five times that amount. According to Rich Daly in an article for the Healthcare Financial Management Association, news of the increased frequencies of HDHPs comes as Congress and the Trump administration have been encouraging the use of these plans.
For instance, Randy Pate, deputy administrator for the Center for Medicare and Medicaid Services (CMS) and director of the Center for Consumer Information and Insurance Oversight, wrote a blog post highlighting the benefits of HDHPs, especially when accompanied by health savings accounts (HSAs). Also, two bills recently passed by the House of Representatives would encourage their use. In July 2018, the House passed the Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act, which would double HSA contribution limits for both individuals and families. The House also passed the Restoring Access to Medication and Modernizing Health Savings Accounts Act, which would allow HDHPs to cover some pre-deductible services while still qualifying for a supplemental HSA account as well as reverse the ACA ban on using tax-advantaged accounts to purchase over-the-counter medications.
Providers Concerned as Well
The trend toward increased use of HDHPs not only creates financial uncertainty for patients, however. Healthcare providers also are feeling the sting, as increasingly, even patients with insurance are likely to have large patient balances that they may or may not be able to pay.
According to a February 2019 Medical Group Management Association Stat Poll, the majority of respondents (59%) indicated they have seen an increase in HSA payments for services provided by their practice, which lines up with another finding in that CDC study from last year. Of the 3.3 percent increase in HDHPs, 3.1 percent of the growth was in CDHPs, or consumer-directed health plans, which are HDHPs with HSAs. However, more than half of Americans with HDHPs do not have HSAs, either because of IRS restrictions that prohibit HSAs for HDHPs that offer first-dollar benefits on services other than preventive care, or because patients can’t afford the added cost of contributing to an HSA on top of their health plan premiums.
Where We Go from Here
The takeaway is simple: the fastest growing payer class among healthcare providers has been and will continue to be patients, whether they are uninsured or underinsured and whether they have a HDHP with an HSA or without. As a result, providers must continue to experiment with and implement patient-friendly billing practices that both serve their bottom line and respect patients’ financial predicaments.
Providers also must continue to advocate for a healthcare payment system in our country that makes sense for all involved. With the constitutionality of the ACA on the line in federal court, with Surprise Billing legislation being floated in Congress, with multiple versions of a Medicare-for-All or universal health system being introduced by candidates for the 2020 Democratic presidential primary, and with President Donald Trump’s own ACA alternative expected to be released in the coming days, who pays and how we pay for healthcare promises to be part of the national conversation for years to come.
For more information about uninsured rates, HDHPs, and more, review the following resources which were helpful in compiling this article:
- Gallup’s U.S. Uninsured Rate Rises to Four-Year High
- Gallup’s Americans Fear Personal and National Healthcare Cost Crisis
- The CDC’s Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, January–March 2018
- HFMA’s High-Deductible Plans Surge: CDC
- Randy Pate’s Person-Centered Strategies: Health Savings Accounts on the CMS blog
- MGMA’s Increase in high deductible health plans contributing to increase in HSA payments
And for ideas on patient-friendly billing practices, check out our 2018 article, Patient Balances after Insurance, Uninsured Rate Continue to Rise; Patient Billing More Complex Than Ever.
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