A Kaiser Family Foundation/New York Times survey showing that one-in-five working-age Americans ran into serious financial difficulties trying to pay medical bills despite being insured is yet more evidence that California needs health insurance rate regulation.
In the survey, 62% of those who had medical bill problems say the bills were incurred by someone who was insured, with 75% saying that the amount they had to pay for their insurance copays, deductibles, or coinsurance was more than they could afford. They reported skipping or putting off other health care in the past year because of the cost, such as postponing dental care, skipping doctor-recommended tests or treatments or not filling a prescription. For out-of-network charges, 69% said they were unaware that the provider was not in their plan's network when they received the care.
Consumer Watchdog said that PPO health insurance policies with very narrow provider networks and extremely limited out of network coverage are a new form of "junk insurance." The nonprofit, nonpartisan group said patients looking for choice in these PPO polices increasingly cannot find competent "in network" doctors then face huge medical bills due to extraordinarily limited coverage for out of network services.
"New PPO policies with very limited providers in-network and extraordinarily low benefits out of network are creating new express lanes to bankruptcy for families," said Jamie Court, president of Consumer Watchdog, who has sought reforms to stop premium increases and benefit changes with state approval. "Until insurance companies are forced to justify that their premiums, co-pays and policy benefits are reasonable, too many families will be forced to choose between paying medical bills and other necessities of life, like paying their mortgage. These findings should shake up the statehouse and revive the regulation debate."
In 2014, Consumer Watchdog sponsored Proposition 45, which would have allowed the state's elected insurance commissioner to make health insurance companies justify their rate hikes under penalty of perjury, and to reject excessive rate increases. Insurance companies spent $56 million to defeat the measure that would have regulated the rates the way auto, home and business rates are inCalifornia, and received 41% of the vote, despite a record-low voter turnout.
Auto, home and small business insurance rates are regulated in California under Proposition 103, which was also sponsored by Consumer Watchdog, which has saved ratepayers over $100 billion since it took effect, according to the Consumer Federation of America.
Other findings in the Kaiser/New York Times survey include:
- Among the insured with problem medical bills, a quarter (26%) say they received unexpected claim denials; and about a third (32%) say they received care from an out-of-network provider that their insurance wouldn't cover.
- Among those with private insurance, those in higher deductible plans are more likely to report medical bill problems than those in plans with lower deductibles (26% versus 15%).
- Most (61%) of those with medical bill problems say they've had difficulty paying other bills as a result of their medical debt, and more than a third (35%) say they were unable to pay for basic necessities like food, heat, or housing. Almost six in ten of those with problems paying medical bills (58%) say they've been contacted by a collection agency in the past year.
Read the Kaiser Family Foundation/New York Times survey here.
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