A new report released by Attorney General Andrea Joy Campbell examines the capacity of Massachusetts households with commercial health insurance to pay for health care and, relatedly, the accumulation of debt when households cannot pay their medical bills. This is the latest Health Care Cost Trends report from the Attorney General’s Office (AGO) in its ongoing work to promote health care access and affordability in Massachusetts.
The report recognizes that health care affordability must be examined in context; while health care prices are an important component, consumer affordability is a product of an individual or family household’s ability to pay for health expenses, given their income and any health insurance benefits, without sacrificing other essential needs, incurring debt, or forgoing needed care.
“The vast majority of Massachusetts residents have some form of health care coverage, but regardless of coverage status, out-of-pocket costs remain unaffordable,” said AG Campbell. “I am proud to release this report, which offers policy recommendations to support affordable access to care and protect consumers facing unaffordable medical bills.”
The report includes the following key findings:
- Lower-income households with employer-sponsored insurance, in particular, may face affordability challenges. For example, Massachusetts households with employer-sponsored insurance living in the lowest-income zip codes spent, on average, nearly $550 more on cost sharing expenditures in 2022 than households in the same zip codes enrolled through the individual health insurance market.
- A significant portion of household budgets for lower- and middle-income Massachusetts residents is comprised of household premium contributions and out-of-pocket spending on cost sharing, such as deductible responsibility. In 2022, Massachusetts households in the lowest-income zip codes enrolled in fully-insured plans, on average, spent the highest percentage of household income (13%) on premium contributions and cost sharing relative to other income quintiles. They spent nearly five times more than households in the highest-income zip codes (2.7%). These same households spent, on average, an additional 39% of their household income on food and housing.
- Vulnerable communities are disproportionately impacted by hospital medical debt, with female, Black, and lower-income patients having a higher likelihood of incurring such debt.
- While hospitals have financial assistance policies that can provide discounts for lower-income patients, these policies vary greatly, and discounts often do not apply to amounts owed for deductibles and co-insurance.
- Lower-cost hospitals serving lower-income populations lose a higher share of commercial revenue to unpaid bills.
- Statewide analyses involving spending on premium contribution and cost sharing relative to average income can often understate affordability burdens. This suggests that affordability assessments at the community level may be a more effective way to identify and target solutions.
- Indexing and monitoring, at the community level, how much Massachusetts households are paying for health care in relation to their capacity to pay and applying these measures against a target health care affordability benchmark that helps identify overburdened communities;
- Increasing protections for consumers around providers' financial assistance policies and practices, including uniform thresholds for discount eligibility, eligibility screening requirements, expansion of requirements to providers outside of hospitals, and discounts that apply to cost sharing, such as deductibles.
- Increasing protections for consumers around collection of medical debt, such as requiring providers to proactively offer affordable payment plans and prohibiting providers from sending bills to collections or taking any “extraordinary collection actions” while bills are subject to good faith disputes;
- Prohibiting medical debt from being reported to credit reporting bureaus and urging hospitals to adhere to the AGO’s recommended medical debt collection practices;
- Addressing rising premium and deductible responsibility, particularly for lower-income households, such as through maintenance of subsidies for consumers buying insurance on the Connector and through employer implementation of programs that reduce spending on health care for lower-paid employees; and
- Increasing support for hospitals that serve lower-income communities and that are disproportionally shouldering bad debt, including implementing strategies to reduce unwarranted provider price variation.
This year’s report was prepared by Assistant Attorneys General Lisa Gaulin and Chloe Cable, Health Care Analyst Maeva Veillard, Lovell Fellow Ruchi Ramamurthy, Paralegal Gaëlle Bouaziz, and Chief Sandra Wolitzky, all of the AGO’s Health Care Division.
Original source can be found here.