Rising premiums, high deductibles, and gaps in coverage before the ACA


acp new logoA guest column by the American College of Physicians, exclusive to KevinMD.com.

By the time you read this, Congress will be in session and hopefully not engaged in another watermelon spitting contest on health care (I’d use a urological metaphor, but there may be children in the room). If our Representatives and Senators choose to tackle this again, may it be in a thoughtful manner that considers the best ideas from all parts of the ideological spectrum.

One of my biggest frustrations when listening to the debate over the Affordable Care Act (ACA) is the repetition of the myth that the ACA created many of the problems that our patients now face with their insurance. My memories of life before the ACA are not the romanticized ones that some of the critics seem to have, a world without rising premiums, high deductibles, and gaps in coverage. In some parts of the country, things are worse post-ACA, but they are better in others for a variety of reasons that are beyond the scope of this column.

But to suggest that all was well, and “then came the ACA” is fantasy, if not intentionally misleading.

One possible exception was my first practice job almost 30 years ago, where everyone had insurance, copayments were low, there were no deductibles, pharmacy was covered, and preventive care was encouraged. I worked at a staff-model HMO, the Rhode Island Group Health Association (RIGHA), which was also the insurer for those patients.

Yet, even that system didn’t always meet everyone’s expectations, such as when a patient wanted to see the famous Doctor So-and-So who was not an HMO physician and therefore considered “out of network.”

Unfortunately, RIGHA went out of business within a year of my hiring. I think the timing was coincidental and more a result of the competitive insurance environment in Rhode Island at the time as well as flaws in the business model. However, similar practices live on — Kaiser Permanente comes to mind — and in many ways, the “new” delivery models, such as the patient-centered medical home, replicate the type of care I delivered in 1989 at RIGHA.

In 1990, I left the HMO and went into private fee-for-service practice, where I remain today. There, I encountered a hodgepodge of payment mechanisms.

Some patients had plans similar to the one my HMO patients had, with low copayments and few additional out-of-pocket expenses beyond their payroll deduction for their employer-based insurance, and that was typically a low deduction.

Others had plans that covered part of my bill, with the patient responsible for the rest. For some of these patients, payment was collected at the time of the visit and the patient would get reimbursed by their insurer. For others, we would bill the insurance and then bill the patient for whatever insurance did not cover.

This arrangement sometimes resulted in awkward situations, such as when the insurer sent the payment to the patient, who then deposited the money instead of signing it over to the office. Perhaps they thought it was a bonus of some kind.

Many of these plans did not cover preventive services. Medicare, for that matter, was also deficient in this area. As a result, patients would ask if I could code a service as something other than preventive for it to be covered by their insurance, in contrast to today’s requests that I code services as “preventive” so that they are covered.

Many of the traditional indemnity plans had deductibles and covered 80% or so of the insurance-approved payment (as opposed to the actual fee) for a service, leaving significant gaps in coverage.

Another segment of my practice was uninsured.

Some of my patients had insurance from out-of-state companies. Their employers probably found it less expensive. I believe that was because when you sell health insurance in a region whose regulators and attorney general have no jurisdiction over you, you don’t have to pay promptly, or at all.

In today’s conversation, much is made of consumers’ having choices in health plans and competition among insurers. Back then, many employers offered their employees different types of plans (HMO, PPO, etc.) from multiple insurers. So-called “market forces” took care of that, when in order to control expenses, employers would give one health insurer exclusivity in return for a better quote. Rising health care costs were reflected in premiums, and in order to mitigate these increases and be able to continue offering medical coverage to their employees, deductibles rose (or were introduced), copayments went up, networks narrowed, and more was taken out of paychecks to pay for it.

In case you’ve lost track, I’m still in the 1990s, not the present.

The rise in deductibles and copayments continued through the 2000s.

So, when the ACA was signed into law in 2010, a significant number of Americans were already dealing with high deductibles, coverage limitations, restricted networks, and rising premiums. While it is clear that the ACA did not address these issues adequately, it did not introduce these problems, either.

While we’re being nostalgic, let’s not forget that millions of Americans were not faced with these challenges, but that was because they had no insurance at all. I’ve heard some people say that no insurance is better than bad insurance. As far as I can tell, very few of them have ever been uninsured.

Yul Ejnes is an internal medicine physician and a past chair, board of regents, American College of Physicians. His statements do not necessarily reflect official policies of ACP.

Image credit: Shutterstock.com


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