What We Really Need for a Healthy, Prosperous New Year
- As high deductibles start over, fewer seek care, but we can fix that
As the New Year approaches bringing all those warm, hopeful wishes for health and prosperity, sadly our health-care system is set up to sabotage both. Across the nation, as hard-working citizens try to pay off their holiday spending while grappling with record high inflation, they now have one more financial worry. The end of the year means the clock on their deductible starts over. Bah-humbug. The drain on their bank accounts gets worse every year.
Although U.S. consumers will spend between 6% and 8% more this season compared to last year on gifts, holiday décor and food, according to the National Retail Federation’s holiday forecast, that’s confetti compared to the real holiday Grinch taking an ever-larger bite out of household budgets - the cost of health care and coverage.
This year 43% of Americans, nearly half, delayed or avoided getting needed medical care because they were afraid of the often unknown costs. Delayed care leads to worse outcomes. Meanwhile, health insurance premiums reached a record high this year as average prices rose to $7,911 for an individual, and $22,463 for a family. That’s on top of sky-high deductibles.
The majority (53%) of working Americans who get insurance through their employers have high-deductible health plans (HDHPs). For them, the New Year means they must start over and spend thousands of dollars before their health insurance kicks in. Falalala.
These costs are a lot for healthy families. But heaven help those like the Brysons, of Sandy, Utah, a working insured family who has a HDHP and a child with a serious health condition.
Mari Bryson’s eight-month-old son was born with a heart defect. Little Carter has already undergone two heart surgeries. He will need another one by age four, and eventually a heart transplant. Ms. Bryson and her husband, who have two other young children, met their $9,000 deductible this year. That was a stretch, since Ms. Bryson, a speech pathologist, had to quit working because her son is not healthy enough to go to daycare. The family expects to shell out another $9,000 and more in 2023, and for years to come unless the system changes.
And it could.
To increase access to care and to stop financially devastating health-care bills, which are the leading cause of personal bankruptcy, we need to bring down the costs of both care and coverage. The best way to do that is through health-care price transparency. The laws to achieve this are in place. Now we just need hospitals and insurers to obey them.
Two years ago, the hospital price transparency rule went into effect requiring all U.S. hospitals to post their prices online by payor and plan, including their discounted cash prices, so patients could shop for the best price. Last July, the Transparency in Coverage rule went into effect requiring insurers to share the same information. Together these two rules were designed to usher in price competition by exposing how much overcharging is going on.
For instance, such transparency would reveal that the same service at the same hospital can vary by 10 times or more. At one hospital in California, having a baby by C-Section could cost $6,000 or $60,000 depending on the health plan. Once consumers can see and compare prices, price variations like these would disappear. Competition would drive down the price of care and coverage. Families like the Brysons would see their insurance premiums and deductibles go down and could rest assured that they could continue to get their son the lifesaving care he needs. And other Americans could seek care without fear of financial ruin.
This could happen now except that most hospitals - 84 % according to a recent report - aren’t following the federal rule. Government enforcement is anemic. So far, the Dept. of Health and Human Services has only fined two of the 5,200 or so hospitals not in compliance. Health advocacy groups and government oversight committees are turning up the heat, demanding more compliance, but resistance is strong. Hospitals and insurers profit handsomely by keeping patients and prices in the dark, so aren’t giving up prices easily.
Meanwhile, employers struggle to manage the ever-rising price of health insurance, a cost expected to go up by as much as 20% next year. Their options are to pay more in premiums (using revenues that could have gone to employee wages or more jobs), reduce benefits, or increase deductibles. Either way, employers and workers lose. The winners are insurers and hospitals, whose executives just keep getting paid more, who will just continue to prosper in the New Year at our expense, and thanks to our hard-earned money.
Unless we speak up.
We need every American worker, employer, and taxpayer to stand up for their right to know prices and push to make sure hospitals obey the law. Because when they do, once health-care prices are finally in the sunshine, prices will plummet, access will improve as patients will be empowered to make health-care choices with financial certainty, and premiums will fall taking their high-deductibles with them. Then, just maybe, we will enjoy a healthy, prosperous New Year after all.
Marni Carey is President of Power to the Patients, a national advocacy group.
