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Health Payer Coverage Access Cuts Patient Financial Strains

Health payer coverage access slashed patient medical bills by 57 percent, University of Michigan researchers found.

health payer coverage access

Source: Thinkstock

By Sara Heath

- Patient access to comprehensive health payer coverage has reduced patients’ financial strains, according to new research from the University of Michigan Institute for Healthcare Policy & Innovation.

As patients gain access to health payer coverage, it is natural that they should see increased access to quality treatment. With those benefits has also come improvements in patients’ financial status, with some patients seeing improved credit scores and fewer frequencies of negative financial incidents, according to these latest findings.

“Across the board, we saw a pretty sizable effect, not just on unpaid medical bills, but also unpaid credit card bills, and on public records for evictions, bankruptcies, wage garnishments and other actions,” said study author Sarah Miller, PhD, of U-M’s Ross School of Business. “Enrollees’ financial well-being seems to improve when they can get the medical care they need without having to put it on a credit card. And the largest effects are among the sickest enrollees.”

Using data from 322,000 enrollees in Michigan’s Medicaid program, the Healthy Michigan Plan, researchers led by Miller looked at how new enrollment in health insurance can have financial implications.

The researchers specifically looked at members who were newly enrolled in 2014, after Michigan expanded its Medicaid program. These members had no previous payer coverage, the researchers explained.

READ MORE: Low Health Literacy Costly for Payers, Health Plan Simplification Needed

Overall, enrollment in a health plan resulted in fewer medical debts. Patient medical bills fell by 57 percent, or $515, and medical debt went down by 28 percent, or $233.

Outside of patient medical costs, insurance enrollment reduced other incidents of financial issue, such as eviction, bankruptcy, and wage garnishments, by 16 percent. Rates of bankruptcy alone went down by 10 percent, and members were 16 percent less likely to overdraw their credit cards after plan enrollment.

Enrollee credit scores also improved, Miller and colleagues found. The number of enrollees categorized as “deep subprime” fell by 18 percent, and “subprime” by 3 percent.

Patient access to health payer coverage also allowed members to take on what is often referred to as “good debt,” such as car loans or mortgages. There were 21 percent more car loans taken out following Medicaid expansion among the study population.

Patients with chronic illness or who had a hospital stay or ED visit after they enrolled in the Healthy Michigan Plan saw the most pronounced benefits, the researchers said. Being that patients of lower socioeconomic status are disproportionately impacted by chronic illness, this is an essential finding, Miller and colleagues explained.

READ MORE: Health Payers See High Patient Satisfaction Despite Cost Concerns

This report builds on previous U-M research indicating that Medicaid expansion resulted in more individuals accessing health insurance and treatment, and fewer providers taking on uncompensated care. Separate U-M research has also indicated that patient access to payer coverage helps low-income patients become healthier.

Health and finance have long been inextricably tied. Patients who face serious financial issues are often unable to access healthcare because they do not have the funds to begin with and because of the serious financial burden healthcare presents.

Before Medicaid expansion in Michigan, 45 percent of patients said they had trouble paying their medical bills, and 25 percent said they skipped necessary care because of high financial responsibility, according to a separate survey conducted by the U-M IHPI.

The study population faced an extreme set of financial and healthcare issues. Average incomes ranged between $4,400 for an individual or $7,500 for a family of three. Seventy percent of subjects had at least one chronic illness, and most of them had at least one ED visit within the previous year.

Other researchers have looked at the impacts of the ACA’s Medicaid expansion. One such study published in 2017 found that Medicaid expansion closed some healthcare disparities among cancer patients, low-income patients, and racial minority patients.

READ MORE: Top Strategies for Collecting Patient Financial Responsibility

However, other research suggests more must be done to address racial disparities in health payer coverage access. A 2017 study noted that although non-Hispanic white and black patients had better access to insurance and community health clinics, Hispanic patients still struggled to access care.

Spikes in private insurance enrollment following the ACA may suggest that many Hispanic patients did not qualify for the Medicaid expansion, but purchased private insurance to comply with the individual mandate, the researchers said.

Hispanic patients may experience disproportionate uninsured rates because only US citizens or legal residents are eligible for Medicaid offered via expansion. There are approximately 6 million unauthorized Hispanic individuals living in the US who cannot access Medicaid expansion, the study authors pointed out.

Data also showed that Hispanic patients were not as aware of the Medicaid expansion options as white or black patients.

Going forward, policymakers may consider examining Medicaid enrollment following expansion, efforts to educate beneficiaries, and the impacts enrollment may have on a patient population.

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