Some Find Care Unaffordable, Even With Obamacare Coverage

(Bloomberg) -- While Obamacare has brought health insurance to millions of people in the U.S., some in the program are finding that the medical care they need is too expensive to actually use.

Michelle Harris, a 61-year-old retired waitress in northwest Montana, has arthritis in both shoulders. She gets a tax subsidy to help buy coverage under Obamacare, though she still pays $338 a month for the BlueCross BlueShield plan. Yet with its $4,500 deductible, she says she’s doing everything she can to avoid seeing a doctor. Instead, she uses ibuprofen and cold-packs.

“It hurts, but we don’t have that kind of money,” Harris said in an interview. “So I deal with it.”

Harris is one of many people with Obamacare plans that feature high out-of-pocket costs that can put health services out of reach. That’s because the insurance coverage Harris and others like her have purchased is designed not to kick in until patients have spent thousands of dollars.

She’s not alone. While the Affordable Care Act has pushed the uninsured rate in the U.S. near a record low, a Commonwealth Fund study this year found that about four in 10 adults in ACA plans aren’t confident they could afford care if they got sick.

Campaign Issue

Affordability has become a major issue in the presidential campaign. Donald Trump, the Republican candidate, has pointed to rising premiums as a sign that the ACA doesn’t work, and promised to repeal it. Hillary Clinton, the Democratic candidate, has pledged to fix the law, in part by boosting subsidies to buy insurance. Any major changes would need action by Congress.

In the meantime, patients are assessing their options. Stephanie Haltinner, 30, has an insurance plan with a $13,000 deductible for her and her husband under Obamacare. Her husband is currently looking for work. She’s looking for a different plan for next year.

“I’m hoping we’ll be able to get something that actually has benefits, so I don’t have to be afraid to go to the doctor for fear of paying hundreds of dollars I can’t afford,” said Haltinner, who lives in Farmington, Utah and works part time while going to school.

For Haltinner, that means being insured, but still having large financial risk.

“A lot of people are still one catastrophic illness away from really feeling the financial impact of this,” said Jonathan Oberlander, a health policy professor at the University of North Carolina-Chapel Hill. “They’re underinsured, and that means they’re not going to get all the services that they want or that they need.” It’s also impacted the rest of the health-care system -- when patients get sick and can’t pay, hospitals or other health providers can get stuck with unpaid bills.

Protecting Patients

The Obama administration is aware. Earlier this year, it highlighted “Simple Choice” plans covering services like doctors’ visits and drugs with small upfront payments. The HealthCare.gov website where people shop for coverage also features a calculator to help figure out how much people will pay. Deductibles are typically highest in the cheapest, or “bronze,” level of insurance sold under Obamacare. The plans usually have lower premiums but also higher out-of-pocket costs. Plans with higher premiums at the “silver” and “gold” levels have more comprehensive coverage.

The ACA sets limits on out-of-pocket bills, capping costs at $7,150 for an individual and $14,300 for a family for next year. While that can alleviate catastrophic debt, it can be less helpful in paying up front.

Middle-Class Problem

In many ways, the affordability problem is a middle-class one. While the law provides tax subsidies to help buy insurance, and extra help with out-of-pocket costs for low-income individuals, it restricts the most generous subsidies to those who earn less than about two times the poverty level, Oberlander said. At higher income levels, customers are asked to pay almost 10 percent of their income for a mid-level insurance plan.

Compounding the problem, premiums rise as people grow older. A 60-year-old making $48,000 a year, just too much to qualify for ACA subsidies, would need to spend 22 percent of his or her income to buy the average mid-level plan, according to a study from HealthPocket Inc., which helps people buy health plans.

Harris got married this year, and she and her husband next year will have income that’s too high to qualify for subsidies. The cheapest plan available to them costs $1,400 a month, with a deductible of about $13,000. If premiums keep rising, Harris says, they probably won’t buy coverage in 2018.

‘Some Money’

Ezekiel Emanuel, who advised the White House on the Affordable Care Act and is now a professor at the University of Pennsylvania, said that while some people still have to put up big sums, the situation is an improvement from before. Individuals no longer face annual or lifetime limits in their insurance plans, and ACA plans offer some services before the deductible kicks in.

“We did a pretty good job for the average American at taking the sting out of big deductibles,” he said. “We do expect people to come up with some money.”

A survey by the Kaiser Family Foundation and the New York Times found that people still face financial difficulty when they get sick. About one in five people with insurance said they or someone in their household had a hard time paying medical bills, compared to half of those without insurance. Individuals with higher deductibles were also more likely to report difficulties.

Courtney Shove, a 38-year-old who lives in Memphis, says she doesn’t feel like she’s getting much value for the money she’s spending on her Obamacare plan. She works at a small nonprofit that doesn’t offer health benefits, so she’s spending about $267 a month for a low-level BlueCross BlueShield plan with a $2,500 deductible.

Next year, the cheapest plan, from Cigna Corp., will cost about $40 a month more, with a deductible of $6,650. Shove figures she’ll pick the lowest premium, so that her monthly expenses don’t skyrocket.

“When I think about what’s going to come out of my pocket, I’m not happy about it at all,” she said. “I’ve never been without insurance, so I guess I’ll probably just get the cheapest plan and go from there.”

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net, Katherine Doherty in New York at kdoherty23@bloomberg.net. To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, John Lauerman