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USA. If insurance isn’t enough

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USA.  If insurance isn’t enough

Claudia Cosma

In America, having health insurance coverage does not guarantee financial peace of mind. In fact, a significant portion of insured people are forced to delay exams and access to health services due to costs and when they cannot do without them, they accumulate bills to pay, ending up in debt if not giving up other fundamental expense items.

According to 2022 data, there would be just under 28 million US residents without health coverage, equal to approximately 9% of the American population. The remaining 300 million US citizens are protected for two thirds from private insurance umbrellas (mainly with group company policies and a minority with individual policies) e for a third by two public umbrellas (Medicare for the elderly and also for disabled people under 65, and Medicaid for low-income population groups) (1). Between mid-April and the end of July, a private foundation specializing in health policies, the Commonwealth Fund, conducted a survey questioning 7,873 adults aged 19-64, asking whether respondents or their family members have delayed or given up on treatment, had difficulty affording healthcare costs, have they incurred debt and what impact has this had on their lives (2).

The answers paint a bleak picture, as can be seen, for example, in Figure 1 which concerns the percentage of adults between the ages of 19 and 64 who reported having difficulty paying for healthcare costs. It is not surprising that the phenomenon affects the population without health insurance the most (76%), but it is striking that this difficulty affects a large part of the population covered by insurance: 57% of those with an individual policy, 51% of those enrolled in Medicare, 45% of those enrolled in Medicaid, and 43% of those insured through company group policies. Among these, those with lower incomes, less than around 60 thousand dollars (56%) suffer more than those with incomes above around 120 thousand dollars (30%). NB. The three lower bars of Figure 1 concern the incomes of those insured through corporate insurance policies divided into three categories in relation to how many times the income is above the federal poverty threshold – FPL (Federal Poverty Level) – set at $29,260 per year.

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Figure 1. Percentage of adults aged 19 to 64 who reported having difficulty paying for healthcare, by type of insurance and poverty level – Source: The Commonwealth Fund

The research also highlights that at least a third of insured adults are forced for economic reasons to delay or forego treatments and medications: specifically, 29% of those with group company insurance, 37% of those who purchased it individually, 39% of those assisted by Medicaid and 42% of Medicare beneficiaries. For the uninsured, things are certainly worse: 58% are forced to skip or postpone treatment.

Moreover, health expenses, to use an expression dear to microeconomics, are among the incompressible items. In other words, treatment often becomes inevitable, however costly. The most tangible consequence? The patient, although recovered, finds himself plagued by bills to pay and debts. This is true for 30% of corporate policy holders, but also for 33% of those purchasing insurance individually, 21% of those in the Medicaid program, and 33% of Medicare enrollees. Debt is most often caused by treatments to treat chronic diseases. Among those who delay or skip treatment, more than half of those interviewed acknowledge that the condition they suffer from has worsened. Finally, debts require savings on the same basic needs as food, heating and rent: 2/5 with medical debt admit to having cut these expenses, a quarter have instead taken on a second job or working more hours during the week. Going into debt for treatment may imply, at the same time, the need to draw entirely on one’s savings or a worsening of one’s bank rating.

At this point it is necessary to ask ourselves how it is possible that a healthcare system that absorbs an enormous amount of resources, both in terms of per capita expenditure ($12,550) and as a % of GDP (16.6%), is unable to guarantee a level of care suitable for those who are covered by health insurance. A system that is structurally inefficient and unfair and that Obama’s reform (Obamacare) has only partially corrected and improved (read here). One of the aspects on which the reform has not worked is the containment of the prices of insurance policies which have grown at a rate almost double that of the annual increase in the cost of living (Figure 2).

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Figure 2. Average annual price of company collective insurance policies to cover a family: in blue the component paid by companies, in light blue the component paid by workers. Years 1999-2023.

As can be seen, the increase in the overall cost is accompanied by the increase borne by workers which in 2023 reached the average annual figure of over 6,500 dollars. The load on workers is proportional to their health conditions, because it is determined:

a) from joint participation (copayment) to the cost of the services provided, which can reach 25%b) from the level of deductible (deductible) which can exceed $2,000 and even $5,000 per year (the insurance comes into play only after health expenses have exceeded a certain level: up to that level the worker pays directly).

Obviously, the higher the levels of co-payment and deductible, the cheaper the policies for the company are and the more expensive they are for the workers.. Those who lose the most are the employees of smaller companies who tend to save on the price of the policies (when these are granted…) and who end up contributing on average over $8,300 a year (Figure 3), which can also be much higher if a person must frequently resort to treatment, such as a diabetic or heart patient.

Figure 3. Average annual price of collective company insurance policies for the coverage of an individual and a family, by size of the company: in blue the component paid by the companies, in light blue the one paid by the workers. Year 2023.

The Report of Commonwealth Fund si conclude with a very wide range of suggestions that are undoubtedly challenging to implement, but also seasoned with a certain dose of realism. By way of example, and this must be recognized in honor of their pragmatism, they do not mention the objective of the transition tout court to one single payer, i.e. to a national healthcare system with universal public coverage. Faced with the opposition of the Biden presidency and the current balance in Congress, which sees a conservative majority in the House of Representatives, wave the banner of “Medicare for all” would be equivalent to hoping for the advent of peace in the world: very edifying, dramatically unlikely.

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The Report’s action plan to make the American healthcare system more sustainable is based on two pillars: consumer protection with expanded financial assistance, especially during periods of illness, and a brake on the growth of costs borne by providers of medical and hospital services, as well as by pharmaceutical companies, and by insurance companies.

The optimal solution is identified in “public option“, or in a direct intervention by the government with federal insurance capable of competing with private policies with a cap effect. On this possibility, however, President Obama himself ten years ago, and with a decidedly favorable political situation, was forced to backtrack so as not to compromise the approval of the entire healthcare reform.

Equally ambitious and probably more feasible is the idea of ​​reducing premiums, deductibles and copayments of low-wage company policies or the request for legislative intervention to allow individual states to regulate the market for employer-sponsored insurance . In the list of suggestions, the potentially bipartisan proposal to make the tax breaks expiring in 2025 for the purchase of individual policies permanent, reducing the deductibles and the quotas intended for direct disbursement paid by the worker. Furthermore, an improvement in care would derive from an elimination of the copayment for primary medicine, a formula which includes visits to the general practitioner, as well as from an intervention by the CMS, the federal center that administers Medicare and Medicaid, to guarantee that the major providers are committed to guaranteeing all the most requested healthcare services.

Claudia Cosma, doctor in specialist training, Hygiene and Preventive Medicine, University of Florence


R A Cohen, A E Cha. Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2022. Available on: Collins, S Roy, R Masitha. Paying for It: How Health Care Costs and Medical Debt Are Making Americans Sicker and Poorer. Available on: Sistemi sanitari internazionali

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