Health insurance cost-shifting is driving patients' financial burden higher

The federal government recently announced that Americans spent $4.3 trillion on healthcare in 2021, nearly 20 percent of the gross domestic product. This enormous topline healthcare cost actually understates the full extent of ordinary Americans' healthcare burden. Due to health insurance cost shifting, patients are paying a larger slice of a larger healthcare cost pie out of pocket.

Through tricks like increasing deductibles, denying claims and effectively doubling copays through so-called copay accumulator programs, health insurers are sticking patients with a bigger share of health costs than ever. As a result, many insured Americans now have health coverage in name only. Congress should protect patients from health insurers looking to shovel costs onto them.

According to the Kaiser Family Foundation, the share of patients with high-deductible health plans has grown by more than 100 percent over the last decade to reach one-third of Americans with employer-sponsored coverage. These patients are forced to pay their first several thousand dollars of healthcare bills out of pocket — on top of the thousands of dollars they spend on premiums.

Sky-high deductibles make patients functionally uninsured. They may have an insurance card, but they still face the threat of debt and bankruptcy from their care. Such patients include the Fierro family from Yuma, Ariz., who racked up more than $7,000 in charges related to hospital visits despite having employer-sponsored coverage from Blue Cross Blue Shield of Texas.

Insurers are also shifting costs to patients by denying claims altogether. Health insurance marketplace plans deny one-fifth of all claims.

Patients with rare and chronic diseases are disproportionately hurt because insurers often deem their attempts to find successful treatment as medically unnecessary or not part of the standard of care. Insurers also increasingly require patients to receive prior authorization before they access care, making it easier for them to deny treatment coverage.

Another way insurers shift costs to patients is through the growing use of so-called copay accumulator programs that prohibit copay assistance (a.k.a. copay coupons) from counting toward patients' deductibles and maximum out-of-pocket limits. For many patients, copay accumulators make prescription medication unaffordable midyear when copay assistance from pharmaceutical manufacturers runs out.

Consider the story of Kristen Catton, a part-time nurse case manager from Columbus, Ohio. Catton has multiple sclerosis, which she's long managed with medications — paid for by copay assistance — that allow her to function in her daily life. In May 2018, she discovered that her insurer adopted a copay accumulator that required her to pay $3,600 per month for her prescription drugs until she met her $8,800 deductible. As a result, she's had to consider rationing her medication. Patients covered by insurance that uses copay accumulators are 13 times more likely to stop taking their therapies.

Unheard of several years ago, copay accumulators are now part of most health plans in 30 states and all plans in eight states. They allow insurers to double the amount of money they receive in deductibles, earning funds first through drugmaker copay assistance, and then from patients directly. Such cost-shifting has helped health insurers make record profits in recent years.

Twelve states have passed legislation banning copay accumulators to protect patients. Congress should pass similar legislation at the national level while also passing commonsense protections to safeguard Americans from runaway deductibles, claims denials, and other forms of insurance cost-shifting. Employer health plans should follow the lead of Health Plan Heroes, offering health coverage that bucks this cost-shifting trend and does right by employees by increasing benefits and decreasing out-of-pocket costs.

Astronomical American healthcare costs are well-known and well-documented and a painful reality for patients. Yet growing insurance cost-shifting is arguably an even bigger burden to patients' pocketbooks. Congress shouldn't lose sight of this distinction in its efforts to tame the American healthcare beast.

Terry Wilcox is the executive director of Patients Rising and the host of Patients Rising Podcast. She wrote this for InsideSources.com.