The problem is, this isn’t enough. Indeed, what we continue to face in large number in the United States is the problem of underinsurance, with people unable to utilize the health insurance benefits covered under their plan. Underinsurance can be defined as having out-of-pocket health care costs excluding premiums over the last year that are at least 10% of one’s household income, or a deductible of at least 5% of income. The Kaiser Family Foundation found that health care deductibles have risen to degrees outpacing wage increases, making clear the strain on working-class individuals and families. In fact, 31 million Americans were underinsured in 2014. This shakes out to being 23% of 19-64 year-old adults covered by an insurance policy. For perspective, 31 million individuals is the equivalent of the entire tri-state area’s population.
Consider some basic facts:
- 11% of privately insured adults had a deductible of $3,000 or more in 2014. (This rate was 10% in 2003). 20% have deductibles of $2,000 or more. The average deductible is approximately $1,100 (67% increase over 5 years ago). Thus, the average person will still need to spend approximately $1,100 before their policy will cover care. That alone is over 2% of the average American’s pre-tax income (not including copays and coinsurance).
- 51% of underinsured individuals reported problems with medical bills. 44% reported that costs prevented them from getting needed care.
- While premiums went up 4% between 2014-15, workers’ wages increased only 1.9% during that same period. Premiums for family coverage increased 27% between 2011-2015.
- 1 in 4 adults surveyed by Families USA did not seek needed health care because of cost. Among those with deductibles of $1,500 or more, nearly 30% could not afford needed health care.
There are important steps in place to make health care more affordable for those who have limited income. The federal poverty level (FPL) for a single-person household was $11,770/year in 2015, with Medicaid or CHIP available to those making less than 138% of the federal poverty level (up to $16,243/year), out-of-pocket assistance to those making 100-250% of the federal poverty level (up to $29.425/year), and premium tax credits available to those making between 100-400% of the poverty level – that is, up to $47,080/year (however, note that this is in reference to the federal and not the state poverty level, with some regions such as New York City and San Francisco having especially high cost of living).
The question then becomes, what if you make $50,000 per year in New York City, where the median apartment rent is $3,100, or in San Francisco, where the median apartment rent is $3,500? Absent an income high enough to shoulder the load of deductibles and medical bills, or low enough to garner greater (or perhaps any) government support, middle class families find themselves caught between a rock and a hard place, often finding themselves skimping on needed health care, and thus potentially making themselves more vulnerable to more serious (and subsequently more expensive) medical conditions down the line. Such reduction in the use of health care policies is particularly poignant when considering that nearly 40% of mortality cases in the United States are estimated to have been from preventable causes of death.
It should not come as a surprise that delaying treatment (or even an initial doctor’s appointment) can lead to more costs down the line. A trip to urgent care for an X-ray and splint for a fractured foot may not be cheap, but it’s more economical than surgery if made necessary by further wear and tear. The cost of cancer treatment goes up significantly from stage II to stage III (in the case of breast cancer, going from $17,400 to $32,600), with earlier testing potentially aiding with diagnosis and earlier intervention and better survival rates. If an artery blockage is detected early, angioplasty may be a reasonable intervention, with costs ranging from $44,000-145,000, compared with heart bypass surgery, which can range from $70,000-200,000 or more in cost.
Also not surprisingly, given this reduction in medical treatment by those unable to afford it, America has marked income inequality in life expectancy. The rampant income inequality in the United States has been well-documented, with the 2015 Global Wealth Report holding that America is the richest and most unequal country, with the United States having by far the highest share of the total global personal wealth (41.6%) but also the highest concentration of overall wealth in the hands of the few (with a Gini coefficient of 80.56 on a scale of 0-100). What’s more, America’s middle class has been shrinking over the years, with more people moving into lower-income and upper-income groups, and reports have shown that paying rent has been an increasingly difficult challenge for the middle class and not just the poor. In 2010, the average upper-income 50 year-old man would be expected to live to be 89, but if lower-income would be expected to live to 76 (that is, a 13-year differential based on income alone. The same inequality can be seen among women, with a life expectancy of 92 if at the wealthiest end of the spectrum versus 78 on the lowest end of the spectrum. While some of these disparities can be attributed to other factors such as eating (and relatedly, obesity) and smoking habits, it is not difficult to imagine how the reluctance to invest in diagnostic procedures given high deductibles and coinsurance would factor in here in a non-trivial way.
The notion of “the American dream,” has permeated much of our society’s discourse, in particular in presidential election seasons as we hear the candidates’ journeys to their running for office (some from humble beginnings, others less so), and as candidates offer their policy solutions to help individuals to rise up the income ladder through hard work and seizing opportunity, achieving successes of which previous generations only dreamed. The problem is that this dream appears to be more alive and well in nations other than America, while every day working families are expected to pull themselves up by their bootstraps.
The 2016 presidential campaign provides an opportunity for underinsurance to be addressed squarely by the candidates. Sanders raised during the March 9, 2016 debate these challenges of affordability in using health insurance and obtaining prescription drugs. Clinton has called attention to the advancements made by the Affordable Care Act and her intention to build upon its successes and expand coverage. The Republican candidates have expressed a determination to dismantle the Affordable Care Act and offer alternatives to curb prices, such as Trump’s proposal to use imported prescription drugs and Rubio’s plan to invest in market-driven alternatives and tax credits.
While the realities of governance, particularly amid divided government, are such that the ideals espoused during the campaign season typically ultimately find themselves tempered through partisan compromise with Congress, the months ahead provide a crucial opportunity for citizens to press the candidates on how they will work to close the gap in health care affordability moving forward.