As coverage of the Affordable Care Act rolls along, the pesky subject of high out-of-pocket costs for plans purchased on the individual market got some serious media attention this week—and it’s about time. The New York Times and The Wall Street Journal each had an article Monday on the substantial deductibles, co-payments, and other costs consumers will face if they choose a lower-premium plan on the new insurance exchanges.
As The New Republic’s Jonathan Cohn noted, a recent analysis by Avalere Health may have prompted the stories; the study showed that chronically ill people who buy bronze and silver policies on the state shopping exchanges—the ones with cheap premiums and higher potential cost-sharing—are likely to be underinsured even though the ACA sets limits on out-of-pocket expenses. Cohn is a strong supporter of the ACA, but he called this “the Obamacare flaw that worries me the most”—and said “it’s good to see this issue getting some attention.”
Cohn’s right about that. This is hardly a new issue—and it isn’t unique to Obamacare or the individual-plan market, either—but it’s been largely overlooked by the media. As all the political wrangling over passing, trying to repeal, and implementing the ACA was playing out, a Great Cost Shift was occurring in health insurance. Deductibles were going up, co-pays were going up, and coinsurance—which requires consumers to pay a percentage of medical costs, rather than a fixed fee—was becoming more common, even if the word “coinsurance” still rarely appears in news stories. (In the summer of 2011 Helen Darling, head of the National Business Group on Health, told The Hill that employers were moving away from fixed, smaller co-pays to costlier coinsurance as a “more subtle way to increase what the consumer pays.”) That shift was baked into the policies now being sold on the exchanges, only in more extreme form—which is the bad news that didn’t make it into the discussion about affordability, while President Obama and his messengers focused on premiums.
In other words: Some people are discovering, or are about to discover, that they can finally afford a plan on the individual market—but the benefits they can get don’t much resemble an employer-sponsored plan of five or 10 years ago, which is what many people still have in mind when they think about health insurance. The plan might be “affordable” in terms of its monthly premium, but having the plan doesn’t necessarily make healthcare affordable. And as that realization hits home, suddenly stories about high coinsurance and high deductibles are no longer dismissed as snoozers by the press.
Here at CJR, we have been urging the press to cover this shift for a long time, and praising the work of reporters who sound the alarm about the consequences of high cost-sharing for people with serious medical needs. Lindy Washburn’s excellent 2012 piece in The Record, Steve Koff’s work in The Plain Dealer, and a recent piece by ProPublica’s Charlie Ornstein (also published by Pacific Standard) all come to mind. It’s good to see the issue getting some coverage in major national publications now, too.
But it’s also important to extend this line of coverage beyond the ACA. While reporters are looking at out-of-pocket sticker shock for exchange policies, they might look at the growing consensus that Medicare beneficiaries should pay more out-of-pocket too. Like what’s happening with employer-based plans, that’s part of The Great Cost Shift, and it’s all justified by the same argument that consumers need to have more “skin in the game.” In other words, feel the pocketbook pain of the high cost of care. The reasoning goes like this: if consumers pay more out-of pocket for healthcare, they will use fewer services and—voila!—the national health care tab will drop.
Maybe. But here are some questions to ponder: Are there other ways to control health care spending without making patients pay 50 percent of a hospital bill if they can only afford a cheaper premium? How strong is the evidence that cost sharing will bend the cost curve, and for whom? If people put off necessary care because they can’t afford the out-of-pocket costs, won’t they have poorer health outcomes? If the costs are substantial enough to change behavior, doesn’t that suggest that medical bankruptcy—which the ACA was supposed to make a thing of the past—may still be with us? And can the media dig in to all this before the next round of outrage about broken promises shows up?
Follow @USProjectCJR for more posts from this author and the rest of the United States Project team.