Millions of Americans have health insurance that isn’t ‘good enough’

The open enrollment season for health insurance is gearing up at a time when more people in the United States have health insurance than ever before. Yet millions of Americans who enroll this fall still won’t be able to easily afford the health care they need or will be hit with medical bills they can’t pay.

Why? Because whether you have health insurance through an employer, the individual market, or even through Medicare, high health care costs and coverage exclusions are making insurance less protective each year.

To be sure, being insured is still much better than being uninsured, something that’s been known for decades. The Affordable Care Act built on nearly 60 years of progress in expanding insurance coverage. Starting with the inception of Medicare and Medicaid in 1965, successive, incremental reforms have brought the U.S. to the point where now only 8.3% of Americans are uninsured. Although that is higher than any other industrialized country, it proves that political will and steady reforms —the American way — can bring us to a better, healthier place.

Such a low rate of uninsured people is worth celebrating. Yet is it also important to ask about the millions who are insured: How good is their health insurance? Unfortunately, the answer for too many Americans is “Not good enough.”

While the ACA created a limit on how much some people have to pay when they get sick, health plans frequently fail to keep people out of medical debt, provide timely access to health care they need, or ensure that people can afford the medications they need to stay healthy.

In a recent survey conducted by the Commonwealth Fund, which we work for, 40% of working age adults who were insured for the full year said they had to skip or delay health care they needed because they could not pay for it. Thirty-seven percent struggled to pay medical bills over the past year or were paying off medical debt over time. Among all respondents, 23% were underinsured, meaning their health care costs and deductibles were especially high compared to their incomes, and they suffered nearly as much as those who were uninsured: 60% reported delays in care due to cost, and 60% of those who did get care reported problems paying their medical bills.

In short, too many Americans are covered by health insurance with such huge cost barriers and exclusions that it’s coverage in name only. And this is far from just a problem for people with private insurance: 20% of Medicare enrollees ages 65 and older are also underinsured.

The major culprit in all of this is the cost of care. The U.S. is projected to have spent $4.3 trillion on health care in 2021, more than any other country. Why are medical costs here higher than anywhere in the world? Because medical prices are higher here than anywhere in the world. The prices that commercial insurers and employers pay to providers are directly linked to how much people are asked to pay out of their own pockets in the form of deductibles, copays, and coinsurance because commercial insurers and employers pass part of the costs onto consumers. And as long as prices continue to rise unabated, insurers will continue to ask patients to pay more, while also continuing their relentless efforts to deny payment for the care they need.

The U.S. can do better. People paying premiums for health insurance should be guaranteed affordable care when they or their family members need it.

There are several ways to assure that health insurance lives up to its promise. First and foremost, something must be done about how much Americans pay for health care. Actually bringing costs down would be the ideal solution but, as a start, it may be more practical just to stop them from growing so quickly. Coverage must also be improved to protect people from high out-of-pocket spending.

Curtailing rising prices will require action from multiple parties. To start, the federal government should vigorously enforce a current law — one that’s largely ignored — that requires hospitals to publish the prices they actually collect from health insurers. Employers can’t be smart buyers unless they know these prices. Employers must also factor prices into their purchasing decisions. If there is no competition in their health care market, they have a role to play in supporting government efforts to break up local monopolies or regulate prices, like Maryland’s all-payer model for lowering provider prices and Rhode Island’s insurance market regulation for slowing the growth in health care spending. Comprehensive reform in how Americans pay for care — to emphasize value, rather than volume — is also key.

Of course, cost control will take time and people need help now. Policymakers have several options, especially in the ACA marketplaces. Congress could expand access to care and reduce medical debt by shrinking the deductibles in marketplace plans and lowering their out-of-pocket limits. If temporary premium subsidies in the Inflation Reduction Act were made permanent, many more Americans could afford to stay covered. Adding an out-of-pocket maximum to Medicare would also provide seniors relief.

The U.S. is in a much better place than when the push began toward providing all Americans meaningful health insurance. Without action from policymakers and industry stakeholders, rising costs will chip away at these gains and more and more Americans will be stuck with coverage in name only.

David Blumenthal is an internal medicine physician and president of The Commonwealth Fund. Sara Collins is an economist who leads The Commonwealth Fund’s health care coverage and access program. Editor’s note: The Commonwealth Fund has grant-funded STAT reporting on racism in health and medicine as well as ongoing coverage of reproductive health and climate change and health.