More insured people stuck with inadequate coverage, report finds

For many people in this country, October kicks off Open Enrollment season to sign up for health benefits.

And it often brings a rise in deductibles and other costs as part of a benefits package.

A report released Wednesday indicates that more Americans with health insurance are not able to keep up with those out-of-pocket costs.

The Commonwealth Fund report said that last year, 28 percent of U.S. adults who were insured all year were “underinsured” — an estimated 41 million people.

The underinsured are people who have health insurance (including employer and individual exchange plans) but face deductibles and health care costs that are high in relation to their income.

The underinsured rate is more than double the rate in 2003, and up significantly from 2014, it was 23 percent, or 31 million people, the Commonwealth Fund said. The share of adults who were underinsured has climbed in each coverage group since 2003: employer-based (both large and small employers), individual market, Medicaid and Medicare.

(Here’s a recent GHN article on a Medicare recipient who’s underinsured and using crowdfunding to help pay his medical bills.)


“This trend is concerning for Georgia consumers no matter how they get their health insurance and confirms the anecdotal reports we have received from consumers across the state,’’ said Laura Colbert, executive director of consumer group Georgians for a Healthy Future, when asked about the Commonwealth Fund’s findings.

“We have increasingly heard from Georgians that they are shouldering a larger and larger share of the costs of their coverage, and that this shift is impacting their wallets and their health care.”

Insurers and employers are shifting costs to consumers as a way to manage their own growing health care costs, and consumers are feeling the squeeze, Colbert said. “Consumers will not feel much relief until the high costs of health care are addressed in a real way that moves our health care system to one that rewards value.”

The Commonwealth Fund study, based on a survey of 6,000 adults, found that deductibles have become an increasingly large factor in underinsurance. More people than ever before have health plans with deductibles, and more have deductibles that are high relative to income.


The underinsured rates climbed across most coverage sources, and were highest among people with individual market coverage, most of whom have plans through the ACA exchanges.

The report said that by 2016, 13 percent of adults enrolled in a private plan had a deductible of $3,000 or more, up from just 1 percent in 2003.

Deductibles are outpacing growth in many families’ incomes, and thus representing a greater share of income.

Annette Bechtold, an Atlanta insurance broker, told GHN on Wednesday that the health plans she sells to small and medium-sized employers have deductibles ranging from $1,000 to $5,000. “People are buying only what they can afford.’’

For some low-income families, Bechtold added, “A $1,000 deductible may as well be $1 million” when it comes to ability to pay.

For an individual, the choice made on benefits is often a tradeoff between premiums and deductibles: Many people accept higher deductibles in exchange for lower monthly payments.

That tradeoff is starkest with the individual health plans sold on and off the exchanges, the Commonwealth Report found.

Among those insured all year, about one-quarter of adults with individual market policies and exchange plans had deductibles that equaled 5 percent or more of their income, up from 7 percent in 2003.

Large deductibles also have been most common among small employers, but in 2016 the share of workers in large firms with high deductibles climbed significantly.

Bechtold, who is president of the Georgia Association of Health Underwriters, said that with the increase in deductibles, she believes more people with insurance are struggling to pay medical bills.

Georgia hospital industry officials have said recently that their share of underinsured patients has climbed, with many having high deductibles and thus difficulty paying their medical bills.

Other findings from the report include:

** People with low incomes are by far the most at risk of being underinsured. Among adults who had health insurance for the full year, 44 percent of those with incomes under 200 percent of the federal poverty level were underinsured in 2016, more than twice the rate of adults with incomes over 200 percent of poverty (20%)

** People with health problems are also at greater risk of being underinsured because of their relatively higher health care costs. Among adults who were insured all year, more than one-third (34%) of those in fair or poor health or those with a chronic health problem were underinsured in 2016, compared to 23 percent of those in better health.

** Half (52%) of underinsured adults reported problems paying their medical bills or said they were still paying off some medical debt. This is about the same rate as adults who lacked any coverage at all during the year.

** Underinsured adults are more likely to skip needed health care because of cost than are adults with more cost-protective insurance. More than two of five (45%) underinsured adults reported not getting needed care because of cost in the past year, including not going to the doctor when sick, not filling a prescription, skipping a test or treatment recommended by a doctor, or not seeing a specialist.