While having medical insurance is important; however, being underinsured is actually a larger problem. In 2014, 31 million Americans are underinsured, with the majority resulting from employer-based health plans. According to The Commonwealth Fund, the number of underinsured has remained unchanged, since 2014. Likely, this trend will continue.
What is Underinsured?
Underinsured people have health insurance, but cannot afford the out-of-pockets costs, such as deductible, co-payments, co-insurance, etc. It is financially detrimental to continue with health services under their health plan’s benefit structure.
Technically, underinsured is measured by meeting one of the following criteria:
- Out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 10 percent or more of household income
- Out-of-pocket costs, excluding premiums, are equal to 5 percent or more of household income if income is under 200 percent of the federal poverty level ($22,980 for an individual and $47,100 for a family of four)
- Deductible is 5 percent or more of household income
The astonishing part is 13% of privately insured adults have deductibles equal to 5%+ of their income (The Commonwealth, 2015). If your income is $50,000, most likely your deductible is at least $2,500, which must be paid in full prior to using most healthcare services. Deductibles are designed to keep you from only using health services that are needed, but more often high deductible plans deter patients from obtaining critical or needed care.
Why do you pay a premium for health insurance that is too expensive to use? Based on 2014, half of Americans earning on average $50,000 to $95,000 stated it was difficult to afford their deductibles. Of this same group, 21% skipped prescriptions or delayed care due to healthcare expenses, even though they had health insurance.
Can you afford your healthcare costs? Find out in our next posting how to determine if you are underinsured?