Health reform law could lead to a new wave of underinsured
While health reform is expected to add 31 million to the ranks of the insured, low-income families—and providers— may still face significant financial risk
Health reform is expected to expand insurance to millions without it and offer households more protection from the financial distress of medical bills. But the law also leaves some newly insured vulnerable to expenses that will add stress to already strapped household budgets, health policy experts say.
The law, which bans insurers from excluding those already diagnosed with an illness and caps the amount households spend on care each year, does much to expand protection for consumers from policies that left patients struggling to afford care, policy experts say. But, they say, for low-income, chronically ill people, the law may not do enough, and upcoming regulations on benefits could significantly affect how much patients spend.
An estimated 24 million of the 31 million people expected to gain insurance under health reform will do so through insurance exchanges—set to begin operations in 2014— that will regulate the costs for low-income households and offset some of the financial burden with subsidies, according to the Congressional Budget Office.
For hospitals, which have seen more insured patients who struggle to pay medical bills, the push to expand insurance could bring with it newly underinsured people who are more likely than the insured to skip tests and medications and less likely to seek follow-up care or see a specialist.
Michael Miller, policy director for Community Catalyst, a patient advocacy not-forprofit based in Boston, says the law includes provisions that give consumers greater access to affordable insurance, but does not completely achieve what many consider affordable coverage for low-income patients— healthcare costs less than 5% of income for those with incomes below 200% of the federal poverty level, or $21,660 based on 2010 guidelines, and 10% of income for all others. “We didn’t get there,” he says.
A big bite out of the underinsured
Miller stresses that the law represents a huge advance from the status quo. Out-of-pocket spending is capped and the limits are more restrictive for plans sold to low-income households within the exchanges, he notes. “In that way, the law takes a big bite out of the underinsurance problem,” Miller says. And under the law, insurers will be banned from setting a limit on the amount policies pay in a year or over a lifetime.
January Angeles, a policy analyst with the Center on Budget and Policy Priorities, a nonpartisan policy not-for-profit based in Washington, says the expansion of coverage alone will
St. Elizabeth Health Center in Youngstown, Ohio, is part of Catholic Healthcare Partners. Uncertainty over health reform’s effects on revenue has affected the system’s planning, according to its CFO.