Can you afford to pay your deductible upfront? Will you be asked to?
When Barbara Retkowski went to a Cape Coral, Florida, health clinic in August to treat a blood condition, she figured the center would bill her insurance company. Instead, it demanded payment
|Earlier in the year, another clinic insisted she pay her entire remaining insurance deductible for the year -- more than $1,000 -- before the doctor would even see her.|
“I was surprised and frustrated,” Retkowski, a 59-year-old retiree, said in an interview. “I had to pull money out of my savings.”
The practice of upfront payment for non-emergency care has been spreading in the U.S. as deductibles rise. Now, the advent of the Patient Protection and Affordable Care Act is likely to accelerate that trend.
Many of the plans offered through the law’s insurance exchanges have low initial premiums to attract customers, while carrying significant deductibles and other out-of-pocket cost sharing. The second-lowest tier of Obamacare plans inCalifornia, for example, carries a $2,000 annual deductible.
Hospitals say they need to charge patients prior to treatment because Americans are increasingly on the hook for more of their own medical costs. And once care is provided, it’s often difficult for hospitals to collect.
“It used to be taboo to look like you were looking for money at a time when you were supposed to be focused on patient care,” David Williams, president of Boston-based consulting firm Health Business Group, said. “It’s not taboo anymore.”
Employers are following suit as they push workers to share more financial responsibility for health care. The percentage of insured workers with a deductible of $1,000 or more for single coverage jumped to 34 percent in 2012 from 12 percent in 2007, according to a study by the Kaiser Family Foundation and the Health Research and Educational Trust.
Overall, the number of people with high deductible plans rose to 15.5 million in 2013 from 1 million in 2005, according to America’s Health Insurance Plans, the industry’s lobbying group in Washington. The Internal Revenue Service largely defines high deductible health plans as those with an annual deductible of $1,250 or more for individual coverage.
“We expect the trend toward high deductibles to continue,” said Ceci Connolly, managing director of PriceWaterhouseCoopers’ Health Research Institute in Washington. “There’s nothing in the law that curbs high deductibles and we very much expect more and more employers to move to high-deductible plans.”
Doctors and hospitals at New York University Langone Medical Center collect co-insurance and deductibles upfront for inpatient and outpatient services, said Andrew Rubin, vice president for medical center clinical affairs and affiliates. The amount may be based on estimated cost of services. The practice helps clarify bills for patients and saves on administrative costs when it comes to collections, he said.
“We get our money faster,” Rubin said in an interview. “As patients pay higher deductibles, we’re talking about potentially thousands of dollars. People get excited to buy a TV, but health care is a service they don’t like to pay for.”
Lee Memorial Health System in Fort Myers, Florida, collects co-payments and deductibles prior to elective services, Mary Briggs, a spokeswoman, said in an e-mail. If a doctor decides a procedure is urgent, they’ll work out payment plans, she said.
And unless it’s an emergency situation, Presbyterian Healthcare Services, a nonprofit hospital system based in Albuquerque, New Mexico, requires patients with insurance to pay their deductible, copay and co-insurance at the time of service, and the uninsured pay in full. The hospital has financial assistance available and says on its website that it can reschedule appointments if patients aren’t able to pay.
“We’re seeing a shift to patients with more high deductible plans, and it’s causing an increase in bad debt expense,” Dale Maxwell, senior vice president and chief financial officer, said by telephone. “The revenue pressures we are facing here are significant.”
Hospitals provided $41 billion in care for which no payment was received in 2011, up from $3.9 billion in 1980, according to a January report by the American Hospital Association. About 25 percent of uncompensated care stems from insured patients, Caroline Steinberg, vice president of trends analysis at the association, said in an interview.
Consumer advocacy groups say the upfront payments limit access to medical care.
“It puts the employee or patient at risk of not getting the service because the deductible may be a barrier to care,” said Mark Rukavina, executive director of the Access Project, a Boston-based nonprofit that focuses on health-care access.
Hospitals counter that discussing payment upfront helps connect patients earlier to financial assistance programs while ensuring providers get paid.
“It helps because you get it at the time of service rather than trying to get it afterwards,” Rich Sheehan, a spokesman for Boulder Community Hospital in Colorado, said by telephone. “Doctors’ offices have been doing it for years.”