High Deductibles Associated with More Medical Bill Problems

In the year and a half following the Affordable Care Act’s first marketplace open enrollment period, the number of families who had trouble paying medical bills decreased by nearly 10 million. Certain factors such as low income levels and high deductibles were associated with more problems, according to an Urban Institute brief.

Using the Urban Institute’s Health Reform Monitoring Survey, the brief focuses on adults aged 64 and under and their reported healthcare spending from September 2013 to March 2015.

The survey asked individuals if they or someone in their family has had problems paying their medical bills during the last 12 months. If they reported any problems, the brief classified them as adults with problems paying family medical bills.

In September 2013, 22 percent of adults reported having problems paying their medical bills. This percent declined to 17.3 in March 2015.

Adults in Medicaid expansion and nonexpansion states both experienced decreases in the difficulties of paying their medical bills. The share of adults with problems paying medical bills in Medicaid expansion states went from 20.5 percent to 15.4 percent and the share in nonexpansion states dropped from 24.6 percent to 20.4 percent.

The expanded provisions under the Affordable Care Act may have helped contribute to the decline in medical bill struggles, but other factors influenced the changes as well.

Based on the data from March 2015, adults were more likely to have trouble paying their medical bills if they had an income at or below 138 percent of the federal poverty level and if they were uninsured for part or all of the past 12 months.

Hispanic adults and adults who did not live in metropolitan areas were also more likely to report problems compared to their counterparts.

Out of the adults who were fully insured for the past 12 months, high deductibles were the leading cause of problems with paying medical bills, the report stated.

Only 12.3 percent of adults who had health plans with no deductible experienced problems with paying medical bills. In contrast, nearly 20 percent of adults with plans that had a deductible of $3,000 or more reported facing troubles. A higher deductible correlated with a higher rate of medical bill struggles.

Adults who reported medical bill problems were also more likely to forego healthcare services due to high costs, according to the report.

Almost three in four adults (73.8 percent) who had problems paying medical bills reported having unmet needs for at least one healthcare service, including prescription drugs, medical care, general doctor care, specialist care, dental care, mental healthcare, and medical tests, treatment, and follow-up care.

More than half of these adults (53.3 percent) had unmet dental care needs, while 39.8 percent went without prescription drugs.

Meanwhile, only 23.2 percent of adults who did not have medical bill problems reported going without at least one healthcare service, with 16.1 percent having unmet dental care needs and 10.2 percent being unable to afford prescription drugs.

Although the share of adults with problems paying medical bills decreased significantly from 2013 to 2015, other factors still contribute to high rates of medical bill struggles.

Low incomes, high deductibles, and discontinuous health insurance coverage were more likely to lead to medical bill problems.

“ACA provisions that reduce deductibles and other out-of-pocket cost burdens, such as cost-sharing reductions for silver plans purchased by those with incomes up to 250 percent of FPL, are likely to mitigate the burden of family medical bills,” the brief stated.

High deductible health plans may produce lower premiums and significant savings with the addition of a health savings account, but they can also increase cost barriers for individuals.

According to data from the National Opinion Research Center at the University of Chicago, high deductible health plans can force individuals to delay medical care. These plans can also impact providers by forcing them to wait months before receiving payments at times.