Even Higher-Income Americans are Frustrated with High Health Insurance Costs; Many Drop Coverage and Switch to Concierge Care; Clinical Laboratories May Be Affected by Trend
From reduced medical laboratory test ordering to dealing with high-deductible health plans (HDHPs), clinical laboratories and anatomic pathology groups are impacted daily by rising healthcare costs. Until now, however, one demographic was not affected—affluent Americans. But that is no longer the case.
According to Bloomberg, thousands of people—some earning more than $125,000 a year—are now foregoing health insurance altogether and instead choosing concierge medicine because it costs less.
“We’re not poor people, but we can’t afford health insurance,” Mimi Owens, a resident of Harahan, La., told Bloomberg.
Priced Out of the Market
Bloomberg also reported on a Marion, N. C., family whose monthly insurance premium of $1,691 in 2017—triple their house mortgage payment—was increasing to $1,813 in 2018. The couple, who had no children and an income of $127,000 from a small IT business plus a physical therapy job, had a $5,000 deductible. However, their total annual insurance investment after premiums was about $30,000, and that was before any healthcare claims.
They decided, instead, to purchase care through a membership in a physician practice.
“Self-employed people are being priced out of the market,” Donna Harper, an insurance agent in Crystal Lake, Ill., told Fierce Healthcare. The self-employed business owner reportedly had to cancel her Blue Cross Blue Shield (BCBS) plan because the premiums totaled $11,000 annually with a $6,000 per year deductible.
“I haven’t been in the hospital for 40 years, so I’m going to roll the dice,” she stated.
Increasingly, this is the choice many people with higher incomes are making and it is impacting both the healthcare and health plan industries.
Huge Deductibles, Skyrocketing Premiums!
Regardless of whether people purchase their health coverage through the Affordable Care Act (ACA) Health Exchanges or their employers, deductibles can be as high as $5,000/year for individuals and $10,000/year for family coverage, or more.
And, in 2017, annual premiums for workers averaged $18,764, a Kaiser Employer Survey reported.
According to CNN Money, ACA premiums for silver plans in 2018 were 37% higher than the previous year, and the average increase for all health exchange plans since 2017 was 24% nationwide.
And, while financial assistance is available, people making more than 400% over the Federal Poverty Level will not qualify for premium subsidies from the ACA, according to HealthCare.gov.
Lots of “Essential” Services, But Narrow Networks
Critics of the ACA point out that one of the reasons Health Exchange plans are so expensive is because every plan is required to have “essential health benefits” that many enrollees to not need or want. For example, a childless couple in their 50s has to pay for an ACA plan that includes services such as maternity, newborn, and pediatric care.
Another cause for sky rocketing costs are the ACA’s limited number of health plans in many regions. In fact, according to Bloomberg, half of the counties in the US—which together cover 30% of all Americans—have just one insurance company available to the Health Exchange customers.
Uninsured Rate Edges Up in 2017
So, it may come as no surprise that after declining over recent years, the uninsured rate noted at 2017 year-end actually increased by 1.3%, which translates to 3.2-million Americans, a Gallup and Sharecare analysis found (see image below).
That report attributes the uptick in the uninsured population, the largest since ACA’s start, to:
- Health insurance companies pulling out of the ACA exchanges;
- Costs for remaining insurance plans too high for consumers to bear; and,
- Those Americans who earn too much for federal subsidies opting to go without health insurance.
Concierge Care Instead of Health Insurance
Many people do not have health insurance, but that does not mean they are without healthcare. For example, the N.C. couple named in the Bloomberg article decided to pay $198 a month (instead of the $1,813 annual premium) for private membership (AKA, concierge care) in a doctor’s office practice. The fee gives them unlimited office visits, discounts on prescription drugs, and lab tests.
The Detroit News, in its report on the launch of University of Michigan Medicine’s Victors Care in April, called membership-based practice programs a “revolutionary shift in medicine.” Victors Care plans, which start at $225 a month, reportedly give people unlimited office visits. (See Dark Daily, “Some Hospitals Launch Concierge Care Clinics to Raise Revenue, Generating both Controversy and Opportunity for Medical Laboratories,” April 23, 2018.)
And HealthLeaders Media noted that about 34% of medical practices surveyed indicated that within three years they may add a membership-based payment model.
Dr. James Mumper, MD (left), founder and chief medical officer of PartnerMD, a concierge care practice in Richmond, Va., treats Howard Cobb (right), who has been Mumper’s patient for 14 years. (Photo copyright: Richmond Magazine/Jay Paul.)
For the doctor’s part, concierge medicine has appeal. Physician want to spend more time with their patients and have fewer patients, noted the Richmond Times-Dispatch.
“So much of being a good primary care physician is listening and having time to listen,” stated Jim Mumper, MD, Chief Medical Officer, PartnerMD, a concierge medical practice he helped start in Richmond, Va. “This model allows the physicians to do the things that cause them to want to go to medical school and do all the training and all the sleepless nights—to feel at the end of the day that they’ve really helped a lot of people.”
Clearly, the healthcare and health insurance industries are under enormous pressure to address rising costs and evolve to better business models. Clinical laboratories are necessarily along for that ride, and in many ways, must be ready to react quickly to changes coming from both marketplaces.
—Donna Marie Pocius
Related Information:
Why Some Americans are Risking It and Skipping Health Insurance
Plans with More Restrictive Networks Comprise 73% of Exchange Market
Millions More Americans Were Uninsured in 2017
2017 Employer Health Benefits Survey
US Uninsured Rate at 12.2% in Fourth Quarter 2017
University of Michigan Fuels Debate on Retainer-Based Health Care
34% of Medical Practice Models Considering Membership Practice Models
