Since the ACA was passed, fewer adults aged 19-64 are uninsured but more are underinsured.
Today, more Americans than ever are finding themselves “underinsured,” meaning they are struggling to pay medical bills or skipping health care because their out-of-pocket costs (especially deductible and coinsurance) are too high relative to their income.
The impact of being underinsured is felt across both the group and individual insurance markets, with the biggest increase since 2014 taking place in employer-provided group coverage:
- 8% increase of underinsured among those with employer-provided group coverage (28% in 2018 compared to 20% in 2014).
- 5% increase of underinsured among those with coverage from the individual market (42% in 2018 compared to 37% in 2014).
One logical explanation for this growing problem is that group health insurance deductibles have risen much faster than salaries. Deductibles increased 212% between 2008 and 2018, while wages only rose 26% during that same period.
With the majority of Americans still covered under employer-sponsored health plans, 49% compared to only 7% with individual coverage (2017), the increased underinsured rate for those in group plans is a troubling trend that squeezes a large segment of Americans.
Learn about supplemental health insurance products that may be available to help you get more benefits.
The Growing Number of Underinsured Americans in Employer Group Plans
When we think about high-cost health insurance we typically picture an unsubsidized individual major medical plan, either purchased from the ACA exchange or the private market.
And that’s still accurate – unsubsidized individual major medical insurance typically has higher premiums and deductibles than group coverage. For instance, the average 2018 unsubsidized individual silver-level ACA plan annual deductible was $3,937. While the average 2018 individual annual deductible for a group plan was $1,573.
While employees report being largely satisfied with their group coverage, they are also concerned about mounting costs: 71% of employees indicate that they are satisfied with their current employer-provided coverage, that same percentage is concerned about health plan costs that continue to rise (2018).
And the data indicates that there is good reason for concern. 23.6 million Americans, or about 15.7%, with employer-sponsored plans experience high out-of-pocket costs, high premiums or both (2018):
- The median out-of-pocket costs for people with employer health plans (2016-2017) in the U.S. was $800 with costs varying by state. Hawaii had a low $360 and Nebraska had a high $1,500.
- The median annual premium contribution for people with employer health plans (2016-2017) in the U.S. was $3,700 with costs varying by state, with Hawaii at a low $1,500 and South Dakota at a high $5,540.
Find the median premium and out-of-pocket costs in your state to see how your employer plan compares.
The consequence of more cost-shifting to employees is that people in employer-sponsored high deductible health plans are increasingly having difficulty affording their health care, health insurance, or they report problems paying medical bills.
Consequences of Being Underinsured
Being underinsured can have both health and financial consequences. People who are underinsured or that spend any time uninsured report cost-related problems getting care and difficulty paying medical bills at higher rates than those with continuous, adequate coverage.
Potential Health Consequences
50% of U.S. adults say that they or a family member put off or skipped some health care, dental care, or relied on alternative treatment in the previous year because of cost. One in eight reported that their medical condition got worse as a result.
29% of adults report not taking their medicines as prescribed at some point in the past year because of cost.
One example of not taking medication as prescribed is the rationing of insulin by diabetics. In a 2019 clinical study published by the Journal of the American Medical Association (JAMA) Internal Medicine, roughly 30% of patients rationed their insulin due to cost.
Unfortunately, patients who reported underuse versus those that were taking the prescribed insulin dosage were more likely to have poor glycemic control.
The only insurance he could find had a $450 monthly premium and $7,600 annual deductible (he didn’t qualify for subsidies). Read the full story: Insulin’s High Cost Leads to Lethal Rationing.
Potential Financial Consequences
26% of U.S. adults say they or a household member have had problems paying medical bills in the past year. About 12% of all Americans say the bills had a major impact on their family.
66.5% of all bankruptcies were tied to medical issues (2019) – either high costs for care or time out of work. That is roughly 530,000 families annually. These findings are consistent with past bankruptcy studies and suggest that the ACA has not had an impact on the number of medical bankruptcies.
One co-author of the bankruptcy research, Dr. David U. Himmelstein, cited “inadequate health-care insurance” as the cause of the lack of improvement.
Many people have to alter plans, take on debt, take on more work, and/or put off other necessary purchases to pay for health care and insurance.
If you’re concerned about your level of health coverage, find supplemental health plans that may be able to help, or speak to a licensed health insurance agent to learn about your options: (888) 855-6837.
Summary + Next Steps
Dr. Himmelstein stated that health insurance is only “very partial protection,” and that health insurance alone may not be enough to protect from high medical costs.
And the data and statistics about the recent underinsured and uninsured rates in the U.S. seem to support this claim. We covered a lot of information in this blog post, including:
- What it means to be “underinsured.”
- The rate of underinsured Americans has increased over the last 16 years, with the biggest increase in recent years for those with employer-provided benefits.
- The potentially significant financial and health consequences for the underinsured, including rationing life-saving medication like insulin and declaring personal bankruptcy.
The next step is to determine if you may be underinsured and if so, what you can do about it.
If you have questions and want help understanding what health insurance options may be able to help, call (888) 855-6837 to speak with a licensed agent.