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Low-Cost Health Plans Come with High Deductibles, Patient Spending

Although patients can access health plans at a nearly no-cost premium, those plans have high deductibles and spark high patient financial responsibility.

high deductible health plan

Source: Thinkstock

By Sara Heath

- Low-income patients can access a health plan with little to no out-of-pocket cost on the ACA health insurance markets, but these plans come with a catch, according to new data from the Kaiser Family Foundation. These subsidized health plans come with high deductibles and high patient financial responsibility for care.

Specifically, low-income individuals receiving government subsidies can purchase a bronze-level plan with no out-of-pocket premium costs.

In 2,532 counties, a 40-year-old patient with an annual income around $20,000 can purchase a bronze-level plan using subsidies for no premium cost. Subsidies cover individuals making $25,000 in 2,014 counties, 659 counties for those making $30,000, 417 counties for those making $35,000, and 120 counties for those making $40,000.

These findings are indicative of falling premium costs, the KFF researchers said. For example, unsubsidized premium costs for the lowest-cost bronze plan fell by 0.3 percent for the 2019 enrollment period. Unsubsidized premiums for the lowest-cost silver and gold plans fell by 1 and 2 percent, respectively, for the same enrollment period.

These cost changes likely stem from changes in government subsidies made during 2017. Specifically, the government lowered the amount of cost-sharing payments to insurers, leading insurers to increase prices for silver plans.

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Some patients may still have access to subsidies and cost-sharing reductions in silver plans, which is an option the KFF researchers recommended consumers explore. This is because the no-premium bronze plans come at a cost.

Bronze-level plans come with exceptionally high deductibles and patient financial responsibility. Paying a  higher premium with a lower deductible may end up being less costly in the long-run, especially if the patient has a chronic illness or is likely to have numerous healthcare needs.

“However, even if silver premiums are higher than bronze premiums it is still important for low-income enrollees to consider the significant cost-sharing assistance that is only available if they enroll in a silver plan,” the report noted. “In order to qualify for a plan with a cost-sharing reduction (CSR), low-income enrollees must sign up for a silver plan. CSR plans lower the amount an enrollee spends out-of-pocket by setting a lower out-of-pocket maximum, which also translates to lower deductibles, copayments, and coinsurance.”

A consumer living at 100 to 200 percent of the poverty level could enroll in a silver plan with an out-of-pocket maximum of $2,600 or less. The deductible for that plan would likely be lower than that, KFF said.

That same consumer could also enroll in a bronze-level plan for no premium. However, that patient could face out-of-pocket maximums and deductibles of nearly $8,000. That leaves the patient liable for paying considerable sums for their healthcare, even though they are not paying a high premium.

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Patients with chronic illness or who are otherwise at high-risk for facing high healthcare costs may consider purchasing a silver plan, which if the patient meets their deductible will be less costly.

These issues indicate a need for better patient education surrounding health plan purchasing, KFF suggested. Although it had been widely reported that average benchmark premiums were dropping, there are several nuances patients must understand when price shopping.

“What a given consumer actually pays depends on income, location, and differences in pricing between their plan and the benchmark silver plan,” the KFF researchers said. “For consumers to know how much they will pay, they must return to Healthcare.gov or their state’s exchange each year and carefully consider their options.”

However, patients may be lacking access to those types of educational resources. And even when health plan price transparency is available, patients might not know they can access or how to access them.

Limited patient resources during open enrollment could be the result of changes to patient navigator programs CMS made ahead of this current enrollment period. In September, CMS announced the patient navigator organizations receiving funding to help patients understand the plans available on the marketplaces.

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The agency awarded $10 million in funding to groups across the country, which is a far cry from the $36 million awarded in years previous. These cuts came as efforts to operate the patient navigator programs in a more efficient manner, according to CMS Administrator Seema Verma.

“We are committed to making sure that consumers have a positive experience,” said Verma. “The grants announced today mark a new direction for the Navigator program aimed at providing a more cost-effective approach that takes better advantage of volunteers and other community partners.”

“This new direction will increase accountability and ensure the grants are effective in helping consumers find health coverage that meets their needs,” Verma continued. “We will continue to monitor the impact of these changes with the primary goal of ensuring consumers have the resources to select a health plan that best fits their needs.”

Critics asserted that these funding cuts undermined the insurance exchanges and would considerably hinder patients’ abilities to choose the appropriate insurance plan for them.

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