Not a day goes by without hearing talk of the 47 million Americans who are without health insurance. Their situation is high on the radar, especially in an election year. But there’s another group of people who are struggling to pay for health care, and their numbers have exploded over the last few years. The number of “underinsureds” – people who have health insurance but with high deductibles and copays that they cannot afford to pay – has risen from 16 million in 2003 to 25 million last year.
These tend to be people who are self-employed or who work for employers who don’t provide health insurance, and they have to buy their own individual health insurance. In addition, some of them work for small businesses that struggle to provide health insurance for their employees and are unable to afford the sort of low deductible policies that are commonly purchased by large companies. While an employee at a big company might consider $500 to be a high deductible, the majority of our individual health insurance clients in Colorado choose deductibles between $2000 and $5000, in order to keep the premiums down. That same employee at the big company may only be paying a few dollars a week for health insurance (with the employer paying the vast majority of the premiums), while the person with the $2000 deductible could be paying several hundred dollars a month. We have a $3000 deductible on our health insurance, and we pay well over $400/month for our family of three. Our Humana policy is HSA qualified – we have no coverage until we meet our deductible. So we know how it feels to have to pay significant amounts of money for medical care. For people who are used to low-deductible coverage with the premiums mostly paid by an employer, it can be a huge shock if they find themselves in a different employment situation where they have to buy their own health insurance.
So now in addition to 47 million people without any health insurance at all, there are 25 million more who have health insurance but don’t really have access to health care because they cannot afford to pay the high copays and deductibles on their policies. So all told that’s 72 million Americans who are likely to skip routine health care and recommended non-emergency treatment because they don’t know how they’ll pay for it. This tends to lead to much more expensive health issues further down the road – things that might have been prevented or delayed had the problem been treated earlier. The Bush administration has pushed heavily for HSAs – high deductible health insurance policies combined with tax-deferred savings accounts. But the problem with this plan is that there’s no requirement that policy-holders or their employers actually fund the savings account. So in the event of a large claim, many people with HSA-qualified health insurance policies end up joining the ranks of the underinsureds, because they don’t have the means to cover their deductibles.
We need to level the playing field a little bit. It’s not right that two people living on the same block can have huge differences in access to health care simply because of where they work. If the government wants to promote HSAs as a means to solving the health insurance problems in this country, they need to do more to ensure that the HSAs are actually funded and available to pay deductibles when the need arises. By setting up – and heavily promoting – a system whereby people can enroll in a high deductible health insurance plan and then not establish any sort of backup savings to cover the deductible, the government has inadvertently increased the number of underinsureds. And since the ultimate goal should be genuine access to health care – not just health insurance – for all Americans, we need to count the underinsureds along with the uninsureds when we look at the state of health care in this country. 72 million working adults who are unable to afford health care doesn’t bode well for our current system. And we cannot continue with business as usual and hope that the problem will go away. In 2003, a third of working adults between 19 and 64 were either uninsured or underinsured. Just four years later, that number had risen to 42%. Until we come to see health care as a public service that is not dependant on where a person works or lives, and that is provided equally to all Americans, we’re likely to see more and more people who are unable to afford basic health care.