Underinsurance Remains Big Problem Under Obama Health Law

The Affordable Care Act, like most health care reform efforts, focuses on people without insurance. That's fine, because those people do face significant problems obtaining health care in the United States.

But underinsurance is a real concern, too, and it's often ignored.

Before the A.C.A. was passed, underinsurance was prevalent. Of adults age 19-64 in 2010, 16 percent, or 29 million, met the Commonwealth Fund's definition of being underinsured: one's out-of-pocket health care costs exceeding 10 percent of income (5 percent when income is less than 200 percent of the federal poverty line), or one's insurance deductible being more than 5 percent of income. The number of underinsured Americans had grown by 80 percent from 2003 to 2010.

Some of the A.C.A.'s regulations, such as removing annual or lifetime limits on reimbursements, were aimed at reducing the out-of-pocket spending that people might have to make. When the act went into effect and some people found their policies had been canceled (despite President Obama's now-infamous assurance that 'if you like your health care plan, you can keep it'), it was often because those policies left them underinsured, even if they didn't realize it.

But the A.C.A. has not done as much as many had hoped it would to reduce underinsurance. In fact, it may be helping to spread it. And proposed modifications to the law, like those that would introduce a new tier of ' copper ' plans in addition to bronze, silver, gold and platinum, might make underinsurance worse.

This is important, because research shows that those who are underinsured are more likely to go without needed care.

In the most recent update of the Commonwealth Fund survey, conducted in September and October of this year, investigators found that 13 percent of all adults 19-64 spent more than 10 percent of their income on out-of-pocket health care costs. Poor adults were the most likely to spend this amount. More than 30 percent of nonelderly adults earning less than the poverty line spent more than 10 percent of their income on out-of-pocket costs, and 18 percent of those making between 100 percent and 200 percent of the poverty line did so. All of these people were insured.

Deductibles remain high for Americans as well. Over all, 13 percent of people age 19-64 had a deductible that was 5 percent of their income or more. Since Medicaid traditionally doesn't have deductibles, pretty much all of these people had private insurance. Still, those at the lowest end of the socio-economic spectrum were hit the hardest. A full quarter of nonelderly adults below the poverty line had deductibles this large, and 20 percent of those making between 100 percent and 200 percent of the poverty line did.

This is too much for many to spend. More than 40 percent of people who were surveyed said their deductibles were unaffordable. Almost two-thirds of people making between 100 percent and 200 percent of the poverty line said they were unaffordable.

The point of having insurance is to be able to get care when you need it, without too large a financial burden. Underinsured Americans are not receiving this benefit, though. They can't get the care they need. Twenty-seven percent of adults with a deductible large enough to render them underinsured didn't see the doctor when they were sick; 23 percent didn't get a preventive care test; 29 percent skipped a test, treatment or follow-up appointment; and 22 percent didn't see a specialist to whom they were referred. Forty percent of them had at least one of these cost-related access problems.

These are people who had private health insurance for the full year. They are not the uninsured.

Last year, the average deductible for a silver-level plan offered in the exchanges was more than $2,500. Some plans had deductibles as high as $5,000. These figures are most likely at least 5 percent of income for many, if not most, Americans ( half of American households earn less than $53,046 per year), even for those who qualify for cost-sharing subsidies. If people choose bronze plans, things are even worse. The average deductible for such plans was more than $5,000, with some plans hitting the out-of-pocket maximum of $6,350. Almost anyone purchasing such plans would be, by definition, underinsured.

Moreover, efforts are underway to go even further. The Expanded Consumer Choice Act, co-sponsored by six Democratic senators and one independent, seeks to add a new level of insurance coverage. 'Copper' plans would have 50 percent actuarial value. Such plans would have significantly lower premium costs than bronze plans, which might increase the number of people who will buy insurance.

But this would be accomplished at the expense of higher out-of-pocket costs. Deductibles for these plans might have to be as high as $9,000, which would mean increasing the out-of-pocket maximum allowable by law. This would lead to even more people being underinsured.

As I've highlighted in previous Upshot articles, people who have chronic illnesses fare worse when they have more cost-sharing. They are also more likely to be underinsured. The Commonwealth Fund found that 17 percent of people who were in fair or poor health, or who had a chronic condition, spent at least 10 percent of their income on out-of-pocket costs. This was on top of the cost of their insurance premiums, because all of them were insured.

Just a month ago, Gallup asked Americans to identify the 'most urgent health problem facing this country at the present time.' Eighteen percent replied that it was access to health care, or universal health coverage; but 19 percent replied that it was affordable health care or costs.

In the quest for universal coverage, it's important that we not lose sight of 'coverage' in order to achieve 'universal.' The point of improving access is, after all, to make sure that people can get, and afford, care when they need it.