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High Deductibles Hurt Patient Pay Collections

By Stephanie Reardon

From 2003 to 2014, insurance premiums increased in every state in the country approximately three times more quickly than median household incomes.

- A brief published by the Commonwealth Fund, a foundation  aimed at improving the healthcare system, has indicated a slowing of the rise in annual healthcare insurance premiums following the instatement of the Affordable Care Act (ACA). However, patients who are insured through their employer’s out of pocket insurance payments continued to increase.

From 2003 to 2014, insurance premiums increased in every state in the country approximately three times more quickly than median household incomes. With deductibles and copays on the rise, medical billing teams face growing challenges when it comes to patient pay collections.

“Although the Affordable Care Act offers a platform from which to build, securing a more affordable future will likely require action beyond those reforms, focusing on costs of care, particularly for the privately insured,” the brief states. “Analyses by MedPAC and others indicate that such initiatives should focus on prices paid by private insurers, as well as incentives to reorganize the delivery system to improve care experiences and outcomes.”

Employers often increase the amount that their employees must pay for copays and deductibles in order to reduce their own cost to provide healthcare. In 2003, beneficiaries with insurance through their employers paid approximately $606 annually for individual insurance coverage. By 2013, this same plan type cost approximately $1,170 annually.

High deductibles or copays are one of major challenges that a practice’s medical billing collection team faces, according to a previous publication on RevCycleIntelligence.com. Patients with a higher debt balance are less likely to pay their medical bills.

In 2013, the average of employer-sponsored family insurance premiums was $16,000 and ranged according to state. In Alabama, Arkansas, Idaho, Mississippi, and Hawaii, insurance premiums ranged from $13,477 to $14,382 and in New Jersey, Massachusetts, New York, Alaska and the District of Columbia they ranged from $17,262 to $20,715.

Although nationally employee-only insurance plans slow to a growth rate of 4.1 percent annually from 2010 to 2013; premium growth rates for insurance continued at a higher rate of 6 percent annually in Alaska, Colorado, Indiana, Maryland, New Hampshire, New Jersey, Ohio, South Dakota, West Virginia, and Wyoming.

According to previous reports, it ultimately will become the provider’s responsibility to make patient payment collection less problematic. In order to address the trend of higher-deductible insurance plans, practices should review and update their payment policies to make them easier to understand for patients and to allow the practice to meet revenue goals.

“The key question is how to slow health care cost growth in a way that benefits middle class and lower-wage working families—that is, keeping premium growth in check without eroding benefits,” the Commonwealth brief concludes. “This will likely require concerted efforts that span the private and public sectors. The challenge to policy leaders will be to pursue reforms that improve the quality of health care, rein in cost growth, and ensure that savings are shared with patients and families across the income spectrum.”

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