The affordability concern came soon after CDC found private health insurance affordability worsened in 2016—reversing a four-year trend.

Jan. 12—The top healthcare issue Americans want the Trump administration and Congress to address in 2017 is rising out-of-pocket costs, according to a new Kaiser Family Foundation (KFF) poll. And it’s a view that’s shared by respondents across party lines.

More than two-thirds of those surveyed by a KFF tracking poll ranked reducing out-of-pocket healthcare costs as a leading priority. An Affordable Care Act (ACA) repeal ranked as the fourth-highest priority among all respondents and the second-highest priority among Republicans surveyed (63 percent, compared with 64 percent who prioritized lower out-of-pocket costs).

But there is a question regarding what respondents mean when they refer to out-of-pocket costs, according to one policy expert who reviewed the survey.

“I suspect if Kaiser had asked, ‘What’s your number one concern: lowering premiums or lowering deductibles?’ people would have said, ‘Lowering premiums,” said Jeffrey H. Anderson, senior fellow at the Hudson Institute, who authored a conservative alternative to the ACA.

Anderson said most of the ACA replacement plans are designed to lower premiums.

Lowering the cost of prescription drugs ranked as the second-highest healthcare priority for the new administration among the 1,204 respondents, followed by reducing the prescription painkiller epidemic.

Cost Shifting Trends

The findings came as both ACA marketplace plans and employer-sponsored plans have shifted a greater portion of healthcare costs to consumers.

In the past decade, the average deductible for American workers enrolled in insurance offered through their employer has increased significantly, according to an employer health benefits survey by KFF. Employee deductibles averaged $1,478 in 2016, a 12 percent increase since 2015 and a 49 percent increase since 2011.

Meanwhile, December data from the Centers for Disease Control and Prevention indicated that private health insurance affordability worsened in 2016. Among privately insured adults ages 18 to 64, 12.6 percent of those surveyed in 2016 faced difficulty paying their medical bills over the past 12 months, compared with 12.4 percent in 2015—reversing a four-year downward trend.

“Even though there are a lot of concerns around high deductibles and out-of-pocket expenses, when patients are asked, at the point of coverage, what sort of plan they desire, they generally choose the lowest-premium plans, and the lowest-premium plans tend to have high deductibles,” said Christopher Kerns, executive director, research for The Advisory Board. “And that seems to be true at nearly every income level.”

And as consumers face higher premiums and deductibles, they are more likely to postpone care or avoid getting care altogether. Two out of five adults with high deductibles relative to their income have delayed or avoided care based on the amount of their deductible, according to The Commonwealth Fund 2015 Health Care Affordability Tracking Survey. In the same survey, one out of four privately insured adults indicated it was difficult or impossible to afford their premiums.

“I don’t think the problem, per se, is that the Obamacare plan has high out-of-pocket costs in terms of deductibles,” Anderson said. “The problem is that those [marketplace] plans are largely a triple crown of bad plans, because they have high out-of-pocket costs and high premiums and narrow doctor networks.”

Kerns said hospitals and health systems see the impact of the cost shift to consumers in three ways:

  • Consumers forgo care to avoid the expense, leading to decreased volumes and higher risks of health complications that present later—often in the emergency department;
  • They seek care or service, but decline to pay for it;
  • They shop around for care, taking into account price, quality, and patient experience.

ACA Repeal Impact

“Repeal and replace” was a common theme in Washington, D.C., in the week before President-elect Trump’s inauguration, with an emphasis on a quick repeal of the ACA and fast enactment of an ACA replacement plan.

Of the ACA replacement plans Anderson has seen—the “Empowering Patients First Act,” unveiled by Rep. Tom Price (R-Ga.), an orthopedic surgeon nominated as secretary of the U.S. Department of Health and Human Services, and “A Better Way,” released by Speaker of the House Paul Ryan (R-Wis.)—“both are designed to strive to lower healthcare costs,” he said.

Increased focus on price transparency is a central cost-reduction strategy of both plans, Kerns and Anderson agree.

“The idea is that if there is greater price transparency, there will be more rationalization of prices that are in the realm of what patients can afford,” Kerns said.

Price’s plan offers fixed-tax credits toward the purchase of private insurance. Credits start at $1,200 and rise with age, regardless of income.

“It would incentivize people not to shop for expensive plans, or at least encourage them not to do so,” Anderson said. “The way to lower healthcare costs is to stop incentivizing people to spend more on health care. I think it will lead more people to shop for value.”

Strategic Implications

In an era of healthcare re-reform, policy experts said healthcare organizations should undertake four steps: increase price transparency efforts; shore up collections procedures; provide sliding-scale discounts; and develop a strategic approach to consumerism.

According to The Advisory Board, 56 percent of patients have tried to find out their out-of-pocket cost prior to receiving care. Kerns said organizations need to offer price estimates, both online and over-the-phone, with an emphasis on estimating the patient’s out-of-pocket cost based on insurance coverage and the portion of the patient’s deductible that has been met to date.

“It’s one thing to offer a price,” Kerns said. “It’s another to offer the price that the patient is actually going to pay.”

Lulis Navarro, senior analyst, research, The Advisory Board, said their research shows patients who make a payment at the point of service are twice as likely to pay their full obligation.

Kerns said providers need to aim to collect at least 60 percent of the patient’s expected out-of-pocket balance upfront and offer a number of options for payment.

The Advisory Board also has found that as the patient obligation approaches 5 percent of household income, the likelihood of payment “drops to almost nothing,” Kerns said.

He urged keeping patient obligations low relative to their total household income.

The Advisory Board also sees more healthcare organizations reevaluating their charity care policies and offer sliding-scale discounts in response to high-deductible health plans.

“This is increasingly important in markets that have a high penetration of HDHPs,” Kerns said.

Finally, a strategic approach to consumerism means not ignoring or dismissing online feedback, Kerns said. Instead, he urged providers to acknowledge comments and act on complaints.

Jeni Williams is a freelance writer based in Chicago. Follow her on Twitter at @EditorJeni.

Publication Date: Thursday, January 12, 2017