For American families, the status quo is unacceptable. Even Americans with good insurance are finding that they are paying more and more out-of-pocket for premiums, deductibles, and co-payments. Reform would be meaningless if working people can't afford to purchase coverage or can't afford the care they need once they are covered.
But what do we mean by "affordable," and how would the bills in Congress help make health care affordable for everyone?
1.) Affordability Means Cost Shouldn't Overrule Medical Necessity
We see this in our hospitals every day. Patients decide to skip a doctor's visit and the medication and treatment that they know they need because they can't afford the payment. Families are forced to choose a different doctor because their health plan was changed because their employer can no longer afford the old plan. Even worse, too many are losing their insurance altogether because their employer no longer offers benefits. The effects can be devastating. In 2007, over 60% of personal bankruptcies involved medical debt. Nearly 80 percent of those who filed had health insurance.
An infection doesn't care if you've just lost your job and, with it, your benefits. A compound fracture doesn't check to see what your deductible is. A complication requiring a trip to the Emergency Room doesn't look to see whether more than 30% of a family's income will be consumed by out-of-pocket expenses.
"Affordability" means our patients can afford to get the care they need, when they need it. If we haven't fixed that, we haven't fixed anything.
2.) Affordability Means Expanding Medicaid
People associate Medicaid as health care for low-income families. But nationwide, Medicaid is only required to be offered to people under the federal poverty line (about $22,000 for a family of four) if they are children, blind, elderly or disabled. In many states, you can be an adult living in poverty and ineligible for Medicaid. For such people, buying an individual health insurance plan - even a low-cost, high-deductible plan - is completely out of reach.
The bills under consideration would expand Medicaid eligibility to everyone at or under 133% of poverty (about $28,600 for a family of four.)
3.) Affordability Means Sliding-Scale Credits for Individuals and Families
Those who do not have benefits through their employer will be able to purchase comprehensive plans, equivalent to what members of Congress receive, through a new transparent marketplace called a Health Insurance Exchange. Individuals and families between 133% of poverty ($28,600 for a family of four) and 400% of poverty ($88,200 for a family of four) will receive credits on a sliding scale so that their health insurance will cost only a percentage of their income. At 133%, their cost will be 1.5% of income. At 400%, their cost will be 11% of income.
What do all these numbers mean? As an example, a family of four making $44,000 would have to pay $12,000 for a typical health insurance plan today. If health care reform passes, they would be paying $2,200 or less.
4.) Affordability Means Capping Catastrophic Costs
Currently there is no cap for out-of-pocket costs incurred because of catastrophic illness or injury. Under the current system, even if a patient has insurance, a sudden major illness like cancer can ruin a family's finances very quickly because of co-pays and out-of-pocket expenses for tests, hospital stays and medications. The U.S. is the only industrialized nation where this is so, which is why families filing for bankruptcy in 2007 paid an average of $18,000 in out-of-pocket medical costs.
For plans in the Health Insurance Exchange, catastrophic costs per year would be capped at $5,000 per individual and $10,000 per family.
5.) Affordability Means Investing in Primary Care and Prevention
It's the ultimate sign that our health care system is upside down - if you don't have insurance, we'll pay the high cost of uncompensated care in a hospital, but won't pay the low cost of the regular check-up and preventative care to keep you out of the hospital.
For plans in the Health Insurance Exchange, there will be no cost-sharing (co-pays or deductibles) for primary care, regular doctor's visits, or preventative care.
6.) Affordability Means Tougher Insurance Regulations
Whether in the Health Insurance Exchange or not, insurers will be prohibited from excluding coverage based on pre-existing conditions. They will no longer be able to charge people different premiums based on their gender, health status, or occupation; and the percent difference insurers can charge based on age will be much more limited. New regulations will also require a standardized annual out-of-pocket spending limit so that no family faces bankruptcy due to medical expenses.
Finally, insurers will also be required for the first time to spend a fixed percentage on actually providing care, not on administrative costs. All of these new regulations will make a big difference for our patients, whether they have insurance or not.