Insurance Bankruptcy Signs

Impending Issues with Increased Enrollment in High-Deductible Health Insurance Plans

Here is a concerning thought…As many Americans enroll for health insurance coverage under the Affordable Care Act (ACA), a large percentage may choose to enroll in the high-deductible health insurance plans associated with low monthly premiums offered through the exchanges.  What is going to happen when these patients receive bills from their hospitals and doctors that they cannot afford to pay?

While there has already been an uptick over the last decade in enrollment in high-deductible plans by insured Americans, many analysts foresee that the numbers will increase exponentially in 2014 and beyond with the enactment of the ACA.

The plans we reviewed on the exchanges for 2014 offered deductibles between $1000 and $6350.  Even with good intentions of choosing a plan that is affordable, a low income family could easily find it difficult to pay their medical bills under their new plan with a $1500 deductible along with the associated monthly premiums and copays.  They may have misunderstood what their financial responsibility would be when they enrolled in their plan.  Or they may have enrolled in a plan with a high deductible because it costs less on a per month basis making it more affordable and appealing.

What is the likelihood that a young healthy adult, who is now required by law to enroll in healthcare coverage or face a penalty, will choose a more expensive plan with a higher monthly premium and a lower deductible?  What about a low income individual?  What about a low income family?

As selling point for the new healthcare law, the Obama administration proposed that having more Americans covered under insurance policies would alleviate much of the uncompensated care hospitals are currently dealing with today.  Unfortunately, the reverse may be true and hospitals are likely to see an increase in the number of patients that cannot afford to pay their bills.

So what might happen?

Individuals who are sick may put off care only to become sicker and require more expensive care as their health deteriorates further.

More Americans may find themselves having to deal with collection agencies, lower credit ratings and an increased need to file for medical bankruptcy.

Hospitals facing an increased burden of uncompensated care will look for ways to make up those costs.  Could this lead to even higher hospital pricing in the future or new charges for services not previously seen?  Perhaps more patients will take the time to fill out the paperwork necessary to take advantage of the charity care hospitals offer.

What other issues could arise?  We shall soon see.  Please share your comments with us.

 

Related news and articles:

“Hospitals worry they’ll be stuck with more bills under Obamacare’s high-deductible plans”
By Timothy Magaw
Crain’s Cleveland Business
October 27, 2013
http://www.crainscleveland.com/article/20131027/SUB1/310279980

 

“Hospitals fear Obamacare plans could mean more bad debt”
By Lora Hines
Houston Chronicle Health
October 27, 2013
http://www.houstonchronicle.com/news/health/article/Hospitals-fear-Obamacare-plans-could-mean-more-4929372.php

 

“Out-of-Pocket Healthcare Costs Soared 25% in First Half of 2013”
By Bob Herman
Becker’s Hospital Review
November 5, 2013
http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/out-of-pocket-healthcare-costs-soared-25-in-first-half-of-2013.html

 

“Hospitals worry about cost-sharing in ACA health plans”
“Experts: Low-income residents are likely to choose high-deductible plans”
The Daily Briefing at the Advisory Board Company
June 17, 2013
http://www.advisory.com/Daily-Briefing/2013/06/17/Hospitals-worry-about-cost-sharing-in-ACA-health-plans