"Being Underinsured Can Be as Bad as Being Uninsured" by Carol Pryor

National data show that being underinsured is nearly as bad as being uninsured. More than a quarter of insured Americans have medical bill problems or medical debt. Hardly deadbeats, a third of them used up all of their savings to pay their medical bills and many did not get needed care because of the cost. If the purpose of health insurance is to allow people to get the care they need without suffering overwhelming financial loss, the data indicate high rates of product failure.

The Access Project recently interviewed insured people with medical debt in seven states, including Massachusetts, to understand their experiences in detail. Our findings have some important implications for current discussions about what insurance qualifies as Minimum Creditable Coverage under the Massachusetts health insurance mandate and what level of premiums can really be considered affordable.

First, even when premiums were relatively low, our interviewees lived in fear of becoming ill because of high out-of-pocket costs. Many went without needed care. Others sacrificed their financial security to get the care they needed. These findings are consistent with national data that show that health plans with high levels of cost-sharing are often not affordable when people get sick.

Second, our report found that confusing insurance policies and error-prone claims handling processes left many patients with coverage denials and unanticipated bills, sometimes for services that should have been covered.

These findings mean that we cannot judge the success of Massachusetts health reform only by the number of uninsured people who purchase insurance. What are their experiences after they have insurance? Can they get the care they need? Is their financial stability undermined in the process? Are their claims processed quickly and accurately? Are they treated fairly?

Our health reform law requires Massachusetts residents to purchase private health insurance. The Connector and Department of Insurance have an important role in ensuring that, in exchange, they receive value. This means setting clear rules about the coverage and services insurers provide, and then monitoring people’s experiences to make sure their insurance provides them with real protection when they get sick and need to use it.

Our report, The Illusion of Coverage, tries to give a voice to the people who will deal with the consequences of health insurance reform, here and in other states. We think they are worth listening to.

Carol Pryor
Senior Policy Analyst
The Access Project

The Access Project is a national healthcare research and advocacy organization.