Even the insured line up for charity

Even the Insured Often Can't Afford Their Medical Bills

By Helaine Olen
The Atlantic, June 18, 2017

The current debate over the future of the Affordable Care Act is obscuring a more pedestrian reality. Just because a person is insured, it doesn’t mean he or she can actually afford their doctor, hospital, pharmaceutical, and other medical bills. The point of insurance is to protect patients’ finances from the costs of everything from hospitalizations to prescription drugs, but out-of-pocket spending for people even with employer-provided health insurance has increased by more than 50 percent since 2010, according to human resources consultant Aon Hewitt.

Even a gold-plated insurance plan with a low deductible and generous reimbursements often has its holes. Many people have separate—and often hard-to-understand—in-network and out-of-network deductibles, or lack out-of-network coverage altogether. While many plans cap out-of-pocket spending, that cap can often be quite high—in 2017, it’s $14,300 for a family plan purchased on the ACA exchanges, for example. Depending on the plan, medical care received from a provider not participating in a particular insurer’s network might not count toward any deductible or cap at all.

The fact is that nearly any illness or injury can lead to unexpected bills, and few are able to absorb those shocks without difficulty. Yet, despite the commonness of such problems, there is little in the way of a system for helping people out through these times.

(The article discusses a multitude of funds with a mission to assist patients in paying their medical bills. The following comments are typical about many of these funds.)

The evidence is clear when you visit the websites of the funds. The Patient Advocate Foundation’s chronic pain fund? Its aid is limited to $1,500 and you need to apply when it’s taking applications. “Effective 01/18/2017, we are unable to process applications that are pending or accept new or renewal applications at this time. Should additional funding for Chronic Pain Fund applicants become available in the future, it will be necessary to re-apply if assistance is still needed.” The Patient Advocate Foundation’s multiple-sclerosis and renal-cell-carcinoma funds have been closed to new applicants since 2016.

And even when medical supplicants find programs, they are not guaranteed aid even if they meet all the eligibility requirements. “Then you call these services, not just for medical help, but any help. They tell you, ‘Oh, you have to hit us on this date,’ or ‘We get funding every month, but our funding is gone by the fifth of the month.’”

As for hospital-based charity, it can vary widely. Most studies find for-profit hospitals provide less charity care than nonprofit medical centers. But getting aid from a non-profit hospital isn’t exactly a gimme. A paper published by the Brookings Institution in 2015 pointed out that the non-profit hospitals with the most funds that could be devoted to charity care—that is, covering or forgiving medical bills of those who cannot pay full—are not located in the geographic areas where the need is greatest.

In an effort to cut down on uncollectable bills, a number of hospitals are now teaming up with financial services firms like Commerce Bank to offer time-limited interest free loans to patients something that, while helpful to some, most certainly is not charity.

Little wonder, then, that an increasing number of patients turn to crowdfunding even before they investigate more established charitable giving programs.

Yet for all the attention paid to crowdfunding, the limited evidence we have shows that for most people, the hype is better than the actual results.

(Ethan Austin, the co-founder of Give Forward) spoke to a group of students at New York University’s Stern School of Business about his (crowdfunding) site. He was blunt about one of the reasons he believed this segment of the online fundraising world had taken off so dramatically. “Our health-care system is shit and it’s trending shittier,” he told the group.

But there is more than simple embarrassment arguing against this system. It’s the equivalent of taping a few bandages over a gaping wound and hoping for the best. The cost of medical care is so high, and the personal finances of many Americans so tight,  it’s all but impossible for any organization—or all of them—to keep up, and that’s whether or not the charitable contributions they accept are part of the problem or the solution.



By Don McCanne, M.D.

You really don’t need a long article like this to understand that our current health care financing system falls far short of preventing financial hardship for many with health care needs, insured or not, and that our various charitable resources hardly make a dent in the need.

We need a health care financing system that ensures access for all while eliminating financial barriers to care. Patches to the current fragmented system will do neither. A well designed single payer system - an improved Medicare for all - would fix the system so it works well for all of us. That’s what the people want. So let’s do it.

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