Underinsured Rate Reached 15-Year High
The findings, which come amid increasing efforts to expand enrollment in Medicaid and Medicare, demonstrate that large shares of enrollees in both programs face cost-related access and affordability problems.
Feb. 6—More insured people are struggling to afford care than at any time since 2003, according to a new survey. And it’s a challenge across all major private- and public-payer categories.
The overall national underinsured rate among insured, pre-retiree adults increased from 28 percent in 2016 to 29 percent in 2018, according to a biennial survey for the Commonwealth Fund. That is the highest underinsured rate they found since they began tracking it in 2003.
The Commonwealth Fund considers someone underinsured if their out-of-pocket costs, excluding premiums, over the prior 12 months totaled at least 10 percent of household income; out-of-pocket costs, excluding premiums, are at least 5 percent of income for households earning less than 200 percent of the federal poverty level (FPL, $24,120 for individuals, $49,200 for families of four); or if their deductible is at least 5 percent of household income.
The only insurance category to increase its underinsured rate from 2016 to 2018 was employer-sponsored insurance, which increased from 24 percent to 28 percent.
However, the underinsurance challenge continued to predominate in the individual-insurance category, where 42 percent were underinsured in 2018, down from 44 percent in 2016. The underinsured rate was largest in the subcategory of insurance plans sold on the Affordable Care Act (ACA) marketplaces.
Perhaps unexpectedly, underinsurance rates were also very high in the public insurance programs of Medicare and Medicaid. Thirty-six percent of the 9 million Medicare enrollees under age 65 and 24 percent of the 72 million Medicaid enrollees—or 17 million enrollees—were underinsured in 2018.
“What people tend to forget is that Medicare has very high out-of-pocket cost exposure, particularly in the over-65 population where folks have to buy additional coverage to cover those costs,” said Sarah Collins, vice president of the Commonwealth Fund.
Specific healthcare access problems that underinsured respondents identified often impacted individually insured people the most. For instance, cost concerns led 25 percent of those individually insured to skip recommended treatments or follow-up, 24 percent of thosewith a medical problem to not visit a physician or clinic, and 17 percent of them to not get needed specialist care.
“Generally asking people enrolled in Medicaid to pay higher costs is probably the wrong direction to go in,” Collins said in a call with reporters. “These data suggest that if anything we should probably try to find ways to make coverage more protective for this group.”
Cost concerns most impacted Medicaid enrollees’ health care in the categories of not filling prescriptions (22 percent of Medicaid enrollees) and delaying or not getting dental care (38 percent).
Billing problems most impacted pre-retiree Medicare enrollees. Among this population, 35 percent had problems or were unable to pay a medical bill, 25 percent had to change their way of life to pay their bills, 29 percent were contacted by a collection agency regarding unpaid medical bills, and 28 percent were paying off medical bills over time.
Policy prescriptions needed to address the underinsured rate in Medicare include increasing the “cost protection of the benefit,” Collins said. The program also needs to be expanded to cover more services, such as long-term care and home-health services.
Collins struck an optimistic note about the underinsured rate in Medicaid, noting that she believes the number is trending downward. However, separate Commonwealth data provided at HFMA’s request showed similar Medicaid underinsured rates—22 percent—as far back as 2003.
One emerging challenge in Medicaid in recent years is the growing number of 1115 Medicaid waivers seeking to add or expand out-of-pocket expenses.
As of January 2017, 30 states charge premiums or enrollment fees and 25 states charge cost sharing for children in Medicaid or CHIP, according to the Kaiser Family Foundation. Additionally, 39 states charge cost sharing for parents, and 23 of the 32 states that implemented the ACA Medicaid expansion for low-income adults charge cost sharing for expansion adults.
Recently, eight ACA Medicaid expansion states have obtained waivers to charge adults premiums or monthly contributions that are not otherwise allowed, and another waiver is pending, according to the KFF waiver tracker. Another three states have obtained such premium-related waivers for non-expansion populations.
“Certainly, states are looking at eligibility and enrollment restrictions beyond community engagement [which include work requirements], including charging premiums beyond levels that are otherwise allowed or that were allowed under the previous [Obama] administration,” Melinda Becker, a program director for the National Governors Association, said this week at a hospital gathering in Washington, D.C.
Although many allowed Medicaid cost-sharing amounts are less than $10 per service, exemptions include maximum cost sharing of 20 percent of the state’s cost for inpatient and outpatient services among enrollees earning more than 150 percent of the federal poverty level (FPL), according to KFF data.
The underinsurance findings come amid increasing efforts to expand enrollment in Medicaid and Medicare as a way to improve access to care and lower costs. However, the new data demonstrate that large shares of enrollees in both programs face cost-related access and affordability problems.
Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare