40% of Americans Blame Deductibles for High Out-of-Pocket Healthcare Costs

Member experience in the US healthcare system is fraught with challenges, but there are steps that policymakers can take to reduce out-of-pocket healthcare costs and make navigation more amenable, according to a report published by PhRMA.

“Americans’ preferences are clear – they want improved insurance coverage to better access and afford needed health care and prescription medicines,” the report stated. “To insured Americans, better coverage means lower out-of-pocket costs, increased transparency and more predictability.”

The report drew its data from a survey conducted from May 23 to June 1, 2022. The sample of respondents numbered over 5,100 US adults, of whom 4,720 were insured and nearly 3,480 were taking prescription medications. The sample was divided in two ways: first, based on difficulty navigating health insurance and, second, based on reported affordability of care.

Four out of ten insured Americans did not understand their health insurance benefits (39 percent) and nearly half of insured Americans expressed concern that their prescribed medication would not be covered (47 percent). Many respondents reported financial barriers, with 15 percent of insured adults saying that they could not cover out-of-pocket healthcare spending in the case of a serious illness, given their current finances.

The problem seemed to center around deductibles. Nearly four out of ten insured adults said that their deductibles formed the primary financial barrier for their out-of-pocket healthcare spending.

Americans who had a mental health condition, reported having poor or average health, had a high deductible health plan, or had switched plans in the past year were more likely to face difficulties navigating their health insurance benefits.

Prescriptions presented a major cost issue for respondents. Seven out of ten respondents said that if they had to pick between lower out-of-pocket healthcare costs for prescription medications or lower premiums, they would choose lower prescription drug spending. However, nearly six out of ten respondents said that they would be willing to pay higher premiums for better coverage (58 percent).

Most Americans also indicated that they value predictability in their out-of-pocket costs (90 percent).

When it came to policy reform, respondents rallied around policies that passed savings on to the consumer. Nine out of ten insured Americans expressed support for policies that would press Part D insurance plans and pharmacy benefit managers (PBM) to pass on rebates and discounts to the drug cost at the counter (89 percent).

Additionally, a third of consumers prioritized policy proposals that would demand that insurance companies cover more services before the deductible.

“Americans want policy reforms that improve their insurance by providing more predictability and transparency in what is covered and lowering what they pay out of pocket. Specifically, data reveal that they want insurance and PBMs to spend less time managing how medicines should be prescribed by doctors and more time making sure patients can access and afford the care they need,” the report concluded.

Recognizing the challenges that members and employees face when trying to afford their prescription medications, some employers have adopted utilization management strategies that seek to reduce access to unproven treatments and lower costs. But research shows that utilization management methods can lead to restricted access to care for serious conditions such as cancers and chronic diseases.

With the passage of the Inflation Reduction Act, policymakers sought to institute drug pricing reform. The downstream impacts of this law remain uncertain, but some experts are concerned about how pharmaceutical companies might use certain facets to shift more costs to privately-insured consumers.

These questions become even more complex when considering advanced therapies which can cost millions of dollars and can have life-changing effects.