Healthcare Affordability in United States is two of the most pressing issues facing today. The nation’s healthcare system is broken, with Americans spending more than $10,000 per person on healthcare but getting limited value for that expenditure. Many Americans don’t have any coverage because they can’t afford it; others have only bare-bones coverage that doesn’t adequately protect them from high medical costs or catastrophic events.
And while there are a number of reasons why it is so expensive in the U.S., the federal government has played a significant role in making things worse by slashing funding for programs that help lower healthcare costs and increasing Healthcare Affordability in United States through policies like the Medical Loss Ratio and medical device taxes. These problems aren’t going to get any better anytime soon either.
In fact, health costs are expected to rise at an alarming rate over the coming decade as a greater number of older people require more hospital care, drug companies continue to introduce new medications and artificial intelligence advances lead to automated diagnosis and treatment recommendations.
Even worse, even if reforms were enacted tomorrow and universal coverage was made attainable for everyone, most Americans would still be unable to afford their share of the health insurance premiums or out-of-pocket expenses without accessing services from speciality doctors or clinics that charge exorbitant rates for their services (i.e., “unhealthy network pricing”).
What is the U.S. healthcare system?
The U.S. healthcare system is largely made up of private insurance, public programs like Medicare and Medicaid, and the Veterans Health Administration. Each type of coverage has its own benefits and exclusions. Some people choose to get private insurance, while others rely on government programs like Medicare or Medicaid. And while many people use a combination of policies, some people opt to only have access to public programs.
Healthcare Affordability in United States is designed to protect people from medical bankruptcy by covering major medical expenses like hospital costs, doctors’ bills and prescription medications. However, many Americans still struggle to pay for their health care even with insurance coverage. About 36% of people report having coverage that didn’t cover their full medical expenses and others report going without needed medical care because of the cost.
A number of policy changes could improve access to affordable coverage, reduce medical costs and make the US health system more financially sustainable.
Health insurance in the U.S.
Health insurance policies come in a variety of types and cover a range of services and health conditions. Some may cover full benefits like hospital expenses, doctor’s visits, prescriptions and medical procedures while others may only cover a portion of the bill or exclude certain health services. For example, some plans may only cover doctor visits or have a copayment or deductible that the patient must pay before the insurance kicks in. Some people choose to get a public program like Medicare or Medicaid to help pay for their healthcare expenses.
But even with this coverage, some people still struggle financially, with one study finding that 12% of people had trouble paying medical bills in the last year and 11.5% reported that they had skipped or delayed medical care because of the cost. Public programs like Medicare and Medicaid are designed for older people who are unable to pay for their own health expenses and are not designed to protect younger Americans from high medical costs, leaving millions of young and middle-aged Americans without any coverage.
Out-of-pocket health costs
Health insurance is designed to protect people from high medical costs and expensive out-of-pocket expenses increasing Healthcare Affordability in United States. However, some people still face high medical costs due to high copayments, coinsurance and deductibles. Copayments are the amount a patient pays for a medical service like copayment is the amount a patient pays for a medical service that is covered by insurance a copayment is 15% of Medicare’s list price.
There are also coinsurance provisions that require patients to pay a percentage of every bill, such as coinsurance is 25% of Medicare’s list price coinsurance is 20% of Medicare’s list price. For example, a $5,000 operation would come with a $3,000 deductible and the remaining $2,000 would be subject to coinsurance. Out-of-pocket health costs can be a major burden for Americans.
For example, Medicare’s out-of-pocket limits apply to about one in five Americans. This means that seniors with traditional Medicare would be responsible for a maximum of $6,600 in out-of-pocket costs in 2019 before the program starts paying 100% of the costs.
Medicare and Medicaid in the U.S.
Public programs like Medicare and Medicaid provide health care for people who are over the age of 65, people with disabilities and low-income families. Medicare is designed for people who are 65 years old and older and provides coverage for hospital and medical bills, prescription drugs and some disability coverage. Medicaid is a joint federal-state program that provides health insurance for people with low incomes and provides coverage to pregnant women, children and people with disabilities and helps them by increasing Healthcare Affordability in United States.
Medicare is the most popular public program but Medicaid is also very important as it provides health care to one in five Americans. Like public programs generally, Medicare is financially unsustainable in the long run and is expected to become insolvent by 2029, meaning that the program would need to be bailed out by the federal government. While Medicare is expected to become insolvent by 2029, Medicaid is expected to stay solvent because it is currently funded through federal and state taxes and is not funded through direct federal spending.
We estimate that about one in five Americans use Medicaid and about one in three uses Medicare. However, some people who use Medicare or Medicaid may still struggle with medical costs. For example, about one in five Medicare beneficiaries report that they had difficulty paying medical bills in the last year.
How to find out if you’re paying too much for healthcare
Unless you have a government-sponsored plan like Medicare or Medicaid, you will have to pay some out-of-pocket costs when you receive medical care. You can use the Transparent Care Act Tool to see if your medical care is within your annual out-of-pocket spending limit. Under the Transparent Care Act, all health insurance policies will include a summary on the first page of your plan that explains the annual out-of-pocket maximum amount that applies to you.
This information will also be included in your plan summary and on your annual certificate of coverage. You can also use the Transparent Care Act Tool to find out if your plan covers 100% of your medical expenses. Many people don’t realize that they are paying high deductibles and copayments because they think their insurance company is covering the entire cost of their care. This is the biggest question when it comes to Healthcare Affordability in United States!
However, this is not the case in many cases. For example, 69% of individuals enrolled in a $5,000 deductible plan with a $1,500 premium would still have out-of-pocket costs that exceeded their deductible.
Reforms to make healthcare more affordable
As the healthcare system becomes more expensive and less accessible, many Americans are turning to high-deductible plans that require them to pay a large portion of their medical expenses before their insurance kicks in. These plans, which are often referred to as “consumer-driven healthcare,” have been shown to be more expensive and have worse health outcomes than traditional insurance.
There are a number of policy changes that could help lower health costs and increase Healthcare Affordability in United States. These include:
- Better regulating medical device and drug prices
- Reforming medical billing and auditing rules to curb excessive charges
- Making Medicare more solvent
- Replacing the income-based eligibility requirement for Medicaid with an asset-based requirement
- Providing tax credits for people with high medical costs
- Implementing post-submission pricing for doctor visits and hospitalizations
- Creating a public option for Medicare to combat rising healthcare costs.
Conclusion
Healthcare Affordability in United States is broken and benefits a few Americans, while costs are expected to rise significantly in the coming decade. There are several reforms that could be implemented to make the system more sustainable and affordable, while still protecting Americans from high-cost medical events.