Healthcare affordability remains an issue despite ACA

Affordability of coverage remains a persistent problem for some individuals and families, even as people gain health insurance coverage as a result of the Affordable Care Act (ACA), according to a Kaiser Family Foundation (KFF) issue brief. 

Marketplace enrollees who reported difficulty affording their premium in 2014 were similar to other marketplace enrollees in some ways, but they faced greater financial insecurity generally and also as a result of their use of healthcare services, according to the KFF brief.

The brief also focuses on the trouble many Americans enrolled in the insurance exchanges are having with affording their premiums and out-of-pocket costs – even with the availability of subsidies. High-deductible plans that require people to pay out of pocket when they visit a doctor, have an X-ray or lab test, or need a prescription drug seemed to be a particular problem for these individuals.

Compounding this problem was the lack of understanding of what was covered by their health plan and what cost-sharing rules applied, which could lead to unexpected costs.

White

"The study is further confirmation that Americans are having problems affording coverage, largely because health costs are too high and growing too fast," according to Joel White, president, Council for Affordable Health Coverage. "Growing concerns with affordability raise into question the long-term viability and success of the insurance exchanges."

The KFF brief focuses on the characteristics of consumers during the first year of ACA implementation (2014).

• One-third of those with marketplace insurance coverage reported difficulty paying their premium.

• Six out of 10 adults who had trouble paying their premiums had incomes below 250% of the FPL and 3/10 were under aged 35 years.

• Nearly half of those who had trouble paying their premiums had dependent children.

Those who had problems paying for their coverage also were:

• More likely to postpone care than those who do not have trouble affording coverage.

• More likely to report not understanding aspects of their health coverage.

• More likely to report problems with their coverage.

"While this study focused primarily on the exchange market, the overall tide of rising health costs affects all consumers and stakeholders and their ability to buy plans on or off exchanges," White says.

In fact, in similar news, the 2016 Milliman Medical Index showed that the cost of care for the typical American family of four has more than tripled since its value of $8,414 in 2001 to an average of $25,826 in 2015.

Next: Managed care can help

Managed care can help

What's the solution? Managed care can help, according to White.

"Managed care executives who are skilled at bringing strategies to bear on the cost problem will be in high demand in the coming years as Congress seeks to address head on the affordability challenge," White says. 


Managed care executives should be marketing health savings accounts (HSAs) to help cover the cost-sharing requirements.

"I would be lobbying Congress to expand HSAs in the exchange and non-exchange markets," he says. "These plans will increase in popularity as cost sharing increases, but the plans are also becoming more difficult to offer due to regulatory changes. Fighting those rules, such as the restrictions included in the 2017 Notice of Benefit and Payment Parameters, should be a high priority."

Five key policy solutions

White also suggests five key policy solutions:

• Better choices for workers. "Unlike in pension world, employers face strong headwinds in providing defined contributions to their workers," White says. "Creating more flexibility to provide a defined contribution health plan would define and limit risk for employers and expand choices for workers."

• Plan flexibility. Greater flexibility for plans and freedom from government mandates would allow insurers to offer products demanded by consumers, rather than those dictated by bureaucrats or lawmakers, according to White.

• Transparency. Improving access to accurate and actionable comparative information on health plan and provider choices will help consumers to make more informed decisions that lower health costs.

• Medication adherence. Policies that improve medication adherence can help patients improve outcomes while lowering systemic costs by avoiding unnecessary, expensive hospitalizations and emergency room visits, White says.

• Incentives for wellness. "Right now, employers can offer workers discounts on premiums if they engage in healthy behaviors," White says. "It is illegal to offer the same discounts to people in the individual market, despite the known benefits of staying well."

"These five changes could save up to $500 billion annually or almost 20% of health costs every year," White says.

The KFF brief also suggests that informing lower-income consumers about the availability of cost-sharing reduction plans that have lower deductibles and copayments can reduce the out-of-pocket burden many of these consumers face.

"Marketplace assisters play an essential role in educating consumers and helping them select the plans that best meet their needs, but broader efforts to improve health literacy appear to be needed," according to the report.