The sometimes high cost of a low-cost health plan

July 20--Richard Sankovich is not happy about the $6,035 invoice he recently got from West Penn Hospital for what turned out to be a pulled stomach muscle, but his experience likely says more about the risks of buying a low-cost health plan than it does about high hospital costs.

In Mr. Sankovich's case, that low-cost "bronze" insurance plan he bought from Virginia-based Aetna/Innovation Health through the Affordable Care Act marketplace has cost him plenty.

The so-called "metal" platinum, gold, silver and bronze plans offered through the federal marketplace offer a range of premiums and coverage, and provide a means for previously uninsured Americans to obtain health coverage.

For the most expensive platinum plans, insurers cover 90 percent of the care costs while the consumer pays 10 percent. Those opting for the lowest-cost bronze plan will be responsible for about 40 percent of the cost. With the most popular silver plans, insurers pay 70 percent and the patient pays 30 percent.

But within those general percentages there may be plan provisions that can make a seemingly low-cost option much more expensive. Like most bronze plans, Mr. Sankovich's comes with a hefty $6,500 deductible that he must pay before his insurance coverage takes over.

The plan also holds him 100 percent responsible for emergency room care, which, combined with the deductible, means he's now going to pay more than a year's worth of his $473 monthly premium payments for the two-and-a-half hours he spent at West Penn.

What happened to Mr. Sankovich "is not uncommon at all," said Denis Lukes, chief financial officer for the Healthcare Council of Western Pennsylvania in Warrendale.

While the federal Affordable Care Act means more people have insurance, he explained, "What is missing in the process is that you have coverage that only kicks in at a certain level."

A Virginia resident Mr. Sankovich, 63, was visiting his daughter in Shadyside in March when he woke up in the middle of the night with a sharp pain near the bottom of his left rib.

His family hustled him to West Penn Hospital's emergency department where he received IV fluids, underwent two scans, got an X-ray, EKG and blood work.

Ultimately, the diagnosis was a pulled muscle for which they gave him ibuprofen.

Mr. Sankovich was taken aback when the West Penn invoice arrived a few weeks ago.

"I will have to pay this and will be doing so over a 12-month period since I am on a fixed income," said Mr. Sankovich, a retired technical service manager for Rubber Maid commercial products who now works part-time as a park ranger.

"But the consumers need to be educated that for each procedure offered in a hospital, it's time to ask, 'Why do I need that?' and 'How much is this going to cost?'"

Dan Laurent, spokesman for West Penn parent Allegheny Health Network, said he could not discuss a specific patient's case but maintained that the hospital's charges fall "in the middling range" for the local market and that rates are negotiated with insurers.

He added that federal law prohibits the hospital from providing estimates for emergency care, which the health system is required to provide such care regardless of a patient's ability to pay. That law is meant to prevent patients from avoiding treatment because of the cost.

But the ACA's low-cost bronze plans may be having the same effect.

Stephen Foreman, associate professor of health care administration at Robert Morris University, said his nurse practitioner students who work at local hospitals tell him they are starting to see lots of patients who come for an initial assessment -- which most plans cover -- "but then don't show up again for the follow up" because of the cost.

"It really is not affordable care all. When people get sick with an exchange plan, they pay deductibles and co-pays they can't afford. If they could, they'd get better insurance."

Mr. Foreman suggests the ACA plan regulations should be modified so that "the amount hospitals charge for an emergency room visit should be no more than the lowest cost they accept from any insurer."

Mr. Sankovich said he switched insurance plans after his Blue Cross/Blue Shield of Virginia insurance, which had carried a $401.75 monthly premium with a $750 deductible that included dental coverage, went to $1,187 per month with the same deductible, but without dental insurance.

By comparison, Aetna's $478 monthly premium looked like a better bet, even with the higher deductible.

As he has found out, however, being responsible for all emergency care up to $6,500 means one pulled muscle or a fall from a ladder can quickly wipe out any savings from the lower premium.

"What good is that for the amount you're spending?" he asked. "You're spending more for that than you do for housing."

Mr. Lukes said even when bronze plans offer emergency room coverage, it is very limited. It might come with a $500 to $600 co-payment, he said, "and it's going to have a deductible as well."

"I really would advocate not choosing a bronze plan if at all possible."

For his part, Mr. Sankovich expects he will go plan shopping again this year during the annual open enrollment period, but he still wonders:

"What can I afford to buy if I pay this amount per month? I don't really have much choice."

Steve Twedt: stwedt@post-gazette.com or 412-263-1963.

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