Illness should not inflict financial ruin

A recent news report told the story of Shirley Perry, a nurse who worked at a large hospital before she got sick and lost her job—which also meant she lost her health insurance.1 When she returned to her hospital for healthcare, she ran up large medical debts that her previous employer sought to recover by suing her—for some $250 000 (£192 200; €227 200).1 The hospital also took out a lien on her home, which it auctioned off after her death at age 51.1

So it goes for the uninsured in America. Americans who are uninsured go without needed healthcare,2 and also face premature death.34 However, as Perry’s story illustrates, lack of coverage can also lead to financial ruin—a point emphasized by a valuable new study by Gotanda and colleagues in The BMJ (doi:10.1136/bmj.m40).5

Some 30 million people are uninsured in the United States today, although the problem was worse before the Affordable Care Act (ACA). That landmark health law reduced the number of uninsured by 20 million, mostly by expanding eligibility for Medicaid, a public insurance program for low income individuals. However, the Supreme Court made the Medicaid expansion optional for states, diminishing the laws’ impact in those states that failed to expand, while (unintentionally) creating a natural experiment that Gotanda and colleagues used to conduct a rigorous analysis of Medicaid’s effects on healthcare spending among low income adults.

The Medicaid expansion substantially reduced financial strain faced by these individuals. Relative to those in non-expansion states, those in expansion states saw a 29.0% ($442) reduction in out-of-pocket (OOP) health spending. The expansion also led to a 4.7 percentage point reduction in the proportion who faced a “catastrophic financial burden” (defined as medical expenses ≥40% of post-subsistence income).

Considered with previous work,46 this study augments our understanding of the benefits of coverage expansion. It also underscores the threat to patients’ health and welfare from a rollback of the ACA, which the Trump administration has sought—and might yet achieve.

However, although defense of past coverage gains is important—and while expanding Medicaid in all 50 states could benefit millions—such measures would still not suffice. According to Gotanda and colleagues’ study, one in seven low income adults living in expansion states still experience catastrophic financial burdens from healthcare.

Several factors are to blame. First, many people are churned out of Medicaid because of fluctuating income and the program’s strict eligibility thresholds, as well as its frequently burdensome enrollment procedures—leading to harmful lapses in coverage.7 At the same time, some working class individuals make too much to qualify for Medicaid, yet find the private insurance offered on the ACA marketplaces unaffordable. Others are undocumented immigrants, who are mostly excluded from Medicaid. Even legal immigrants entitled to benefits, however, may fear enrolling in the xenophobic aura of the Trump era.8

For more, however, the problem is not lack of insurance, but defective insurance. In 2018, 44 million working age adults with health insurance were underinsured,9 in large part because of high copays and deductibles, often thousands of dollars a year and rising.10 Additionally, when patients obtain care out of network (that is, from a hospital or doctor who has not contracted with their particular insurance plan), they may find that they are not covered for any medical expenses. This is sometimes discovered after the fact, for example, when a patient goes to an in-network hospital but (possibly under anesthesia) is treated by an out-of-network physician, leading to so-called surprise medical bills.

The US is unique among its peer nations in this respect. Before the ACA, the burden of out-of-pocket medical spending was nearly threefold higher in the US than in Canada.11 Post-ACA, a third of US adults still have problems obtaining medical care because of cost—twice the proportion in Canada, and nearly fivefold higher than in the United Kingdom.12 The problem is that although the ACA substantially expanded coverage, it failed to transform the structure of the system itself.

It is little surprise, then, that healthcare reform has returned to the national discussion. Today, national health insurance is a central dividing issue in the Democratic presidential primary election, which will produce President Trump’s challenger, and potentially his successor. Meanwhile, in January, the nation’s largest medical specialty society took the historic step of endorsing national health insurance (Medicare for All) as one road to universal coverage.13 There is, then, some burgeoning hope that the US may yet join other nations in realizing a right to healthcare. The fate of millions of patients such as Shirley Perry hangs in the balance.