Commonwealth Fund: Insurance coverage often not enough to stave off high healthcare costs

Even amid high levels of insurance coverage, more and more Americans are finding it difficult to afford healthcare, a new survey found. 

The survey, released Thursday by the Commonwealth Fund, showed insurance coverage doesn’t always provide enough financial protection against rising costs. It also found that certain groups such as Hispanics and lower-income individuals were chronically uninsured. 

“The Affordable Care Act made great strides for better access to health insurance,” said David Blumenthal, M.D., president of the Commonwealth Fund, in a reporter briefing Wednesday. “However, more work is needed to fill the remaining coverage gaps.”

The survey, fielded from March 28 through July 4, found 43% of working-age adults surveyed were inadequately insured. This figure includes 9% who were uninsured, another 11% which had a gap in coverage over the past year and 23% that were underinsured where their benefits didn’t give them access to affordable care. 

“More than one-quarter (29%) of continuously insured people with employer coverage and 44% of those with coverage purchased in the individual market or marketplaces are underinsured because of high out-of-pocket costs and deductibles, relative to their income,” according to a release on the survey. 

Those surveyed who had poor insurance were unable to handle unexpected healthcare costs. 

“Half (49%) of people surveyed said they would be unable to pay for an unexpected $1,000 medical bill within 30 days, including 68% of adults with low income, 69% of Black adults and 63% of Latinx/Hispanic adults,” the release added. 

Researchers identified underinsurance as individuals that had out-of-pocket costs over the past year, excluding premiums, that equal 10% or more of their household income. 

“Because out-of-pocket costs occur only if a person uses their insurance to obtain healthcare, we also consider the deductible when determining whether someone is underinsured,” according to the survey brief. 

The Commonwealth Fund’s survey is based on a sample of 8,022 adults 19 and older. 

The results come amid major gains in insurance coverage in the past several years thanks in part to record sign-ups on the Affordable Care Act’s (ACA's) exchanges due to enhanced tax credits and gains in Medicaid due to the pandemic. 

However, experts caution that coverage alone isn’t enough to ensure people are protected from high healthcare costs. 

In addition, coverage gains over the past several years could be threatened if the enhanced credits (which expire in 2025) are not made permanent and when pandemic emergencies eventually wind down, said Sara Collins, lead author of the survey.

She added Congress could also help enhanced ACA exchange costs further by setting the benchmark plan from silver to gold tier. The benchmark plan is the one used to calculate income-based tax credits that lower the cost of insurance. By increasing the benchmark plan to the higher gold tier, the credits would expand to cover more of the costs. 

“It’s a significant improvement in terms of cost protection,” Collins said.