Consumers worried about rising health costs

It is no secret that more health costs are being shifted away from employers and onto workers seemingly every year, forcing people to pay thousands of dollars more for their health care and insurance than they did even a few years ago. With that in mind, people's relationships to their insurers and care providers have materially changed, leading to more anxiety about simply being able to afford basic treatments.

A recent Kaiser Family Foundation poll found that, among a number of other concerns about the basic cost of living, the things that were most worrying to people tended to be related to health care and insurance. For instance, 38% of respondents say they were “very worried” about unexpected medical bills, and another 29% were “somewhat worried” about them, making up the single biggest issue among the eight options given.

Understanding the concern
Another 24% were very worried about meeting their deductibles, and 29% somewhat worried, the report said. Both were ahead of being able to meet transportation costs – cited by 20% and 26%, respectively – as well as prescription drug costs, monthly utility bills, health insurance premiums, rent or mortgage payments and food.

Moreover, 1 in every 4 people polled who said they had already received a large bill felt it was likely due to costs on the care provider's end, rather than their insurers. This practice – known within the industry as balanced billing – comes because care providers do not agree to the cost insurers are willing to pay for treatment, leaving the individual or their families holding the bag for the rest.

Meanwhile, 78% of respondents said they felt drug companies were the biggest reason their own personal health care costs were on the rise, up from 71% in 2011, the poll found. People also pointed to issues about waste and fraud, needlessly high charges from hospitals, insurers trying to wring additional profits and the development new medical technology as other notable cost drivers.

A growing trend
Unfortunately for many Americans, the high cost of care isn't likely to end soon, as about 40% of all people with employer-sponsored coverage have a deductible of $1,300 for individual coverage, or $2,600 for families, which is the point at which the federal government deems it to be a “high-deductible plan,” according to research from the Centers for Disease Control and Prevention. However, many such policies – about half of all high-deductible plans, by some estimates – go well beyond those numbers, sometimes stretching above $3,000 or more on top of the ever-higher premiums consumers pay.

At the same time, only about 14% of people with employer-sponsored insurance have no deductible at all, the report said. Even those who receive other types of help from employers when it comes to paying medical bills, such as a health savings account, aren't necessarily getting all the assistance they need to make the math work. And even then, only about 1 in 5 even have access to them.

The Commonwealth Fund recently found that through the end of 2017 – the most recent year for which complete data is available – typical premiums and deductibles added up to about 12% of the national median income, more than $7,200 per year. In 2007, well before the implementation of the Patient Protection and affordable Care Act, that number was nearly 8% – $565 – lower. Moreover, premiums are still rising at a rapid rate, and so too is the extent to which employers increase deductibles.

What's the effect?
Nationwide, about 1 in 6 people with such coverage said a high medical bill – or even the potential for one – has caused them to make sacrifices such as going without food, moving in with loved ones or working more, according to a separate Kaiser poll conducted in collaboration with the Los Angeles Times. Still more make other financial decisions, such as shopping at discount stores, spending time clipping coupons and putting bills on credit cards. Furthermore, About 20% say their health expenses have caused them to go through most or all of their savings.

The National Cancer Society recently found that more than 137 million people nationwide have experienced financial hardships as a result of medical expenses in the past year, accounting for well over half of all Americans. This is particularly true among people under the age of 65, those without college degrees and, of course, people with pre-existing medical conditions. Even about 1 in 4 people who have health insurance – whether through a private insurer or a public plan – struggle in this way.

When people are concerned about the cost of care or insurance itself, they may put themselves in a more precarious health situation for the sake of keeping their finances in good order. This is an issue that could be a significant one for the insurance and health care fields simply because many now recognize the situation as untenable and acknowledge that the subject is likely to be a massive one in the 2020 elections. For that reason, those in either field would be wise to closely monitor any developments and consider the ways in which they can ease consumers' cost burdens on an ongoing basis.