Andrew Holko has a decent household income: At more than $80,000 a year, that puts him almost at the median for a four-person household in the U.S. Nevertheless, the 45-year old IT worker and his family (spouse and two kids) are finding themselves crippled by healthcare costs, even though Holko has coverage through his employer. The Holko’s health plan, like many others these days, has a high deductible — $4,000 annually.
“We shop at discount grocery stores. My wife is couponing. We are putting every single bill we can on the credit card,” Holko told the Los Angeles Times. “We’re drowning.”
The LA Times today published the results of a study it did in partnership with the nonprofit Kaiser Family Foundation with supplemental analysis from the Health Care Cost Institute and the Employee Benefit Research Institute. The study, which included a nationwide poll, finds that one in six Americans who get insurance through their jobs say they’ve had to make “difficult sacrifices” to pay for healthcare in the last year, including cutting back on food purchases or moving in with friends or family. One in five say healthcare costs have eaten up all or most of their savings.
In the poll of working-age adults with job-based insurance, a quarter said they had put off vacations or major purchases in order to pay for healthcare. A quarter have curtailed spending on clothing and other basic household goods. Although that’s higher than some other national surveys, the Times cites a study published today by American Cancer Society researchers which found that in the last year, 56% of all U.S. adults had problems paying medical bills, delayed care or worried about affording care.
Hardest hit in the cost shift are lower-income workers and those with serious medical conditions such as diabetes, heart disease and cancer – who are more than twice as likely as healthier workers, according to the Times/KFF poll, to report problems paying medical bills and to say they’ve cut back on spending for food, clothing and other household items.
The rise of high-deductible health plans has greatly expanded Americans’ out-of-pocket medical expenses within the past 13 years, the Times reports.
The average deductible for a single worker with a job-based insurance plan in 2006 was just $379, adjusted for inflation, according to an annual employer survey that KFF has conducted for more than two decades. By 2018, that figure had more than tripled to $1,350. Four in 10 U.S. workers have at least a $1,500 deductible – the threshold the poll used for high-deductible coverage for individuals.
Over the same time, insurance premiums also increased, rising at more than double the rate of inflation and outpacing wage gains, the Times reports.
The story profiles other Americans struggling with high deductibles, including Tomas Krusliak, a 27-year-old chef in western Virginia. He ended up taking on two extra jobs, working some days from 5 a.m. to 11 p.m., to pay medical bills after his wife had a miscarriage as the couple tried to have their first baby. They had a $5,000 deductible.
High-deductible health plans, as the story notes, were supposed to help rein in healthcare costs by getting employees and their families to be more price-conscious consumers, ultimately forcing providers and drugmakers to lower their prices. However, that strategy has not worked out as planned.
“The thing that caught people’s imagination was this idea of unleashing American patients as consumers,” Dr. Arnie Milstein, medical director of the California-based Pacific Business Group on Health, an organization of large companies, including Boeing, Safeway, Walmart and Wells Fargo, told the Times.
Part of the problem, the story notes, is that many Americans simply don’t have enough cash. In 2016, the most recent year with available data, just half of single households and six in 10 multi-person households had even $2,000 in available savings – including cash, non-retirement stocks, mutual funds and other liquid assets – according to a KFF analysis of government data conducted for the Times.
Meanwhile, only 17% of workers say they have attempted to shop around to find the best price for a medical service in the previous year, according to the Times-Kaiser poll. A lack of price transparency on the part of medical providers is another issue: Two-thirds of surveyed workers said finding out the cost of a medical treatment or procedure was “somewhat or very difficult.”
The story notes that a growing number of healthcare officials, and even some corporate leaders, say it’s time to reassess the “cost-sharing revolution.”
“I would love to see us reevaluate the whole purpose of co-pays and deductibles,” said Dr. Barbara McAneny, the American Medical Association president. “It makes no sense to put a barrier in front of care patients need to get.”