Massachusetts and Consumer Costs

Health insurance exchanges are one prominent feature of the Massachusetts and federal health reforms.  Through the exchanges people without access to other insurance can buy coverage.  Depending on income level, much or all of the cost of the coverage may be subsidized.  A recent article in Health Affairs summarizes a survey of families receiving insurance through the exchange in Massachusetts, but not receiving a subsidy and explored the effects on the families’ finances.   (HA Article)   The respondents came from only one health plan, and the total number was only 393 families, which is pretty small statistically.  Most of these people were in the lower tiers of health plan types; those with relatively low actuarial coverage of total expected costs.  This choice is to be expected for both lower income families, who would seek to minimize up-front premium costs, and higher income ones, who would be willing to accept the trade-off of higher ongoing out-of-pocket expenses.  But since people likely underestimate their need for health care, being in a plan with high deductibles and copays can lead to surprises about out-of-pocket costs.  One surprise from the survey was that as many as 30% of families who aren’t getting a subsidy, were eligible for one according to their self-reported level of income.  But the researchers did not verify actual income.  About 38% of the families said they experienced a financial burden in regard to health care, which meant they had difficulty paying medical bills, deferred care or had general financial problems due to medical costs.  As would be expected, this reporting of financial burden was much higher for lower income families.  A number of families also reported higher than expected costs under their coverage, which again, as might be expected, was greater with high-deductible and lower actuarial value plans.  The authors suggest that these unsubsidized families need more help with tools to understand their likely medical needs and costs and to pick a plan accordingly.  They also suggest that further subsidies may be needed for these families, but that will obviously just exacerbate the overall cost of these “reform projects”.  Massachusetts is already swamped by the costs of its reform.  It should be clear by now that this is not the right direction to take the health care system.