Guest post by Yao He, Master’s Student in Public Health, Columbia University
Do high premiums discourage enrollment? Or, is a premium of any size a deterrent when it comes to seeking health insurance? How does cost-sharing (deductibles, co-insurance, etc.) play into whether people get the health care services they need? Does income level matter?
The web has been abuzz with talk of health care costs and how they affect our access to and use of health care services. Here’s a rundown on some of the more interesting pieces we’ve read of late:
It turns out that Medicaid premiums can cause enrollees to leave their plans. A new study looked at how income-dependent premiums prompted Medicaid disenrollment in Wisconsin. Medicaid beneficiaries in the state with incomes between 150-200 percent of the federal poverty line (FPL) are required to pay premiums starting at $10/month. Premium amounts increase with income. The study found that the mere presence of a premium – no matter the amount – could increase the likelihood of disenrollment by 12 percentage points. These findings offer food for thought as our own state continues to expand public health benefits. The New York State Legislature recently authorized a Basic Health Program that would include a premium of up to $20/month for beneficiaries between 150-200 percent of FPL, the same income level as those in the Wisconsin study.
If premiums can cause people to leave plans or stay uninsured to begin with, what is the effect of cost-sharing (e.g. deductibles, co-insurance) on people’s health insurance habits? And how might cost-sharing have an impact on health care costs? The answer depends in part on whether a person is healthy or sick, rich or poor…
A famous RAND Health Insurance experiment shows that the higher the cost-sharing in a plan, the less health care services people use – this makes people less costly for insurance plans to cover. But does this mean that higher cost-sharing plans result in health care savings? Not necessarily. More recent research shows that high-deductible plans with low premiums tend to attract healthier people who are naturally cheaper to cover. Moreover, the effect of high deductibles on health care cost reduction may not be sustainable. One study showed a remarkable 25 percent reduction in health care cost in the first year after the high deductible took effect, but reductions in following years were only around five percent.
The RAND study referenced above showed that lower use of care resulting from high cost-sharing does not have an adverse effect on most people’s health, especially if a person is generally healthy. However, this is not the case for those of us who are poor or sick. For people with chronic illness, cost-sharing can cause financial stress and may prompt some to skip recommended services, harming their health. If they happen to be older or live in low-income areas, they can be even worse off. Not surprisingly, less cost-sharing can ease the health and financial burdens on the chronically ill. For example, Medicaid and Children’s Health Insurance Program (CHIP), both public programs, allow those with chronic illness to get care more easily because these plans have very low levels of cost-sharing.
Finally, a new issue brief by the National Health Law Program provides a comprehensive look at how premiums and cost-sharing impact enrollment, service utilization, and health status in the Medicaid population. The brief leaves us with an important message: Medicaid can only serve its purpose to affordable coverage that meets the medical needs of the most vulnerable among us if it has the lowest possible premiums and cost-sharing. Since Medicaid beneficiaries have very low income, they are extra sensitive to the added burden of cost-sharing. At the same time, Medicaid beneficiaries are more likely to have chronic conditions and many health needs, which means unaffordable cost-sharing can force people to stop or delay using services that could improve health. This can bring bigger health issues in the future that cause more harm to people and require more expensive medical services.
Guest post from Maryanne Tomazic, Raising Women’s Voices
The national survey of 3,105 women took place in late 2013, before the end of the first open enrollment period of the new health insurance marketplaces. It showed that low income women and women of color experience high rates of being uninsured. While many women have enrolled in plans via the marketplaces (NY State of Health enrolled 189,888 women into qualified health plans as of the end of April!), others still cannot afford the cost of the qualified health plans. Still others live in states that, unlike NY, have not expanded Medicaid.
The survey also showed that cost is often a barrier to accessing health care services. Most women reported delaying or forgoing care because of cost: Two thirds of uninsured women, 35% of women with Medicaid, and 16% of women with private insurance. Other barriers to healthcare included being unable to take time off of work, not being able to get child care, and lack of transportation.
These survey results show that even though the Affordable Care Act has expanded and continues to expand coverage options and make insurance more affordable, steps are still needed to make sure women are able to get and use the care they need.
For the full report, click here.
Thanks to the Affordable Care Act (ACA), more than 1 million uninsured New Yorkers will newly have access to affordable health insurance options starting this fall. That’s a lot of folks who will need to wade through a lot of new information in the coming months.
HCFANY will be holding a briefing in New York City on Thursday, March 7th at the Interchurch Center from 9:00 am – 11:30 am to go over the necessary public outreach and enrollment efforts that will need to happen in order to ensure that the greatest number of New Yorkers benefit from the ACA. Specifically, we will be going over the following questions:
- How will New Yorkers learn about new health coverage options?
- How is New York State going to reach out to and sign up the uninsured?
- What will individuals, families, and small employers in New York l need to know?
- What’s to be gained if we do it all right (…and at risk if we don’t)?
- What can our elected officials do to help make it go smoothly?
- How can groups across New York contribute and participate?
This meeting is open to all New York members, allies, colleagues and new friends in the NYC area.
Under the ACA, states are allowed the option of creating a Basic Health Plan (BHP) for low-income adults who earn too much to qualify for Medicaid. Ordinarily, if these folks don’t have employer-sponsored coverage then come 2014 they will be able to buy insurance through the Exchange with the help of federal tax credits. But, even with the tax credits this coverage may still be too expensive for them. The BHP then would act as a bridge between the free or low-cost Medicaid coverage and the higher priced options available on the Exchange.
Don’t be fooled by the name though - there is nothing “basic” about it. According to the ACA, BHP coverage must be as affordable and comprehensive as what these adults would have gotten on the Exchange. In New York, coverage would likely resemble that of the Family Health Plus program.
New York currently offers public coverage to low-income adults through its Family Health Plus program, the cost of which is split with the federal government. New York also pays for Medicaid coverage for low-income immigrants without help from the federal government. Through the BHP program, New York would be able to cover both of these groups and have the federal government pay for it all. This would save the state between $500 million and $1 billion per year.
Sounds great, right? Problem is, the federal government still hasn’t released guidance on this program, and isn’t planning on doing so anytime soon. Unfortunately, state policymakers won’t commit to the program until they are sure of all the details. So, until that happens, it is unlikely that New York will get any of the cost-savings and affordability protections that the BHP has to offer.
HCFANY has created a policy brief on this issue to explain it in detail, urge federal policymakers to release BHP guidance, and provide recommendations to state policymakers.
Click here to read HCFANY’s policy brief, titled “The Basic Health Program Option in the Affordable Care Act.”