The Illusion of Coverage: How Health Insurance Fails People When They Get Sick

The Illusion of Coverage: How Health Insurance Fails People When They Get Sick By: Carol Pryor Andrew Cohen Jeffrey Pro�as © 2007 by The Access Project The Access Project (TAP) has served as a resource center for local communities working to improve health and healthcare access since 1998. The mission of TAP is to strengthen community action,promote social change,and improve health,especially for those who are most vulnerable. TAP conducts community action research in conjunction with local leaders to improve the quality of relevant information needed to change the health system. TAP’s fiscal sponsor is Third Sector New England,a non-profit with more than 40 years of experience in public and community health projects. TAP is affiliated with the Heller School for Social Policy and Management at Brandeis University. If you have any questions or would like to learn more about our work,please contact us. THE ACCESS PROJECT 89 South Street,Suite 404 Boston,MA 02111 (617) 654-9911 Fax:(617) 654-9922 www.accessproject.org Catherine M.Dunham,Ed.D. President Mark Rukavina,MBA Executive Director This report is also available on The Access Project website. ©2007 by The Access Project Table of Contents Executive Summary …………………………………………………………………………………………… 5 Findings …………………………………………………………………………………………………… 5 Discussion and Recommendations ………………………………………………………… 10 Introduction …………………………………………………………………………………………………….…13 Prevalence of Medical Bill Problems Among the Insured …………………….. 13 Insurance Policy Characteristics that Increase Risk ………………………………14 Groups At Risk ………………………………………………………………………………………….14 Consequences of Inadequate Insurance ………………………………………………… 15 Medical Bill Problems Among the Insured are Likely to Grow ……………… 15 Methodology and Respondent Characteristics ………………………………………………… 17 Methods ……………………………………………………………………………………………………17 Respondent Characteristics …………………………………………………………………….18 How Does Health Insurance Fail People? ………………………………………………………….19 Three Stories ……………………………………………………………………………………………19 Common Themes ……………………………………………………………………………………. 22 Insurance Characteristics that Leave People at Risk ……………………………………….24 Premiums, Deductibles and Other Cost Sharing …………………………………….24 Caps On Coverage …………………………………………………………………………………… 25 Uncovered Services ………………………………………………………………………………… 27 Insurance Processes that Leave People at Risk …………………………………………………30 Confusing Policy Provisions …………………………………………………………………….30 Out-of-Network Fees ……………………………………………………………………………… 32 Procedural Problems ……………………………………………………………………………….33 Insurance Disputes and Errors …………………………………………………………………34 Confusing Provider Systems Compound the Problem …………………………….35 Purchasing Health Insurance: Do People Have Meaningful Choices? ……………….39 Group Insurance ………………………………………………………………………………………39 Non-Group Insurance ……………………………………………………………………………… 41 Does Health Insurance Provide Value? …………………………………………………… 45 The Consequences of Medical Debt ………………………………………………………………….47 Access to Care ………………………………………………………………………………………… 47 Financial Consequences ………………………………………………………………………….51 Psychological Consequences …………………………………………………………………..56 Discussion ……………………………………………………………………………………………………………58 Findings ……………………………………………………………………………………………………58 Policy Environment ………………………………………………………………………………….60 Recommendations ………………………………………………………………………………………………62 Conclusion ………………………………………………………………………………………………………….66 Endnotes …………………………………………………………………………………………………………….67 Acknowledgements ……………………………………………………………………………………….……70 Partner Organizations …………………………………………………………………………………………71 Executive Summary Recent research has clearly documented that unaffordable medical bills and resulting medical debt are widespread in the United States. Although the uninsured are most at risk, people with insurance are vulnerable as well; one survey found that more than one quarter of people contin-uously insured over the previous year had medical bill problems or medical debt. However, while national surveys document the prevalence of medical bill problems among the insured, they are not able to demonstrate the specific ways in which health insurance products fail to protect people financially and fail to guarantee their access to needed care when ill or injured. The purpose of this study is to investigate the gaps in coverage and the systemic problems that cause insured people to accrue medical debt, as well as the consequences of the debt for individ-uals and families. The findings are based on in-depth interviews with 45 people in seven states who had accrued medical debt while they were privately insured, either through an employer-sponsored or an individually purchased plan. The findings are summarized below. However, because summary findings cannot easily convey the complexity of our interviewees’ experiences, we recommend that all readers also review the stories and comments in the body of the report. To facilitate this process, we have highlighted some of the stories and comments within the text. Findings Our interviews suggest that medical debt among the insured results from a variety of causes and the interaction of a number of factors, including the adequacy of people’s insurance plans, the nature of their medical needs, the cost of their treatments, and their financial resources. In all cases, however, interviewees found that their insurance failed to fulfill its primary function—to protect them from financial losses and guarantee access to needed care when they became ill. Insurance Characteristics that Cause Medical Debt Some of the insurance characteristics that caused interviewees to accrue debt included the fol-lowing: • Premiums, deductibles and other cost sharing. About two-thirds of our interviewees cited premiums, deductibles, co-payments, or co-insurance as one source of their medical debt; many cited a combination of these charges. People with lower incomes and/or chronic conditions were particularly vulner-able, even when their deductibles and other cost-sharing requirements seemed relatively modest. However, many with higher incomes also faced unaffordable out-of-pocket expenses because of high deductibles, co-insurance, and other forms of cost-sharing. The Illusion of Coverage 5 ... - tailieumienphi.vn