The American Rescue Plan Act to the Rescue

Unfortunately, it’s the patient who is left out in the cold.

The American Rescue Plan Act (ARPA) extends eligibility for health insurance subsidies to people buying their own health coverage through the Patient Protection and Affordable Care Act (PPACA) federal Marketplace who have incomes over 400 percent of the federal poverty level. It also increases the amount of financial assistance for people at lower incomes who were already eligible for PPACA coverage. This change will only last two years, at a cost of around $62 billion. 

While extending benefits, it still does not solve the problems of high co-insurance amounts and lack of access. 

First, let’s take some real-life examples of how high deductible amounts impact insurance coverage under the PPACA. Bob is a mechanic working in Florida. Like millions of Americans, Bob takes blood thinners for recurring blood clots. One of Bob’s reasons for signing up for healthcare coverage was to cover the $492 per month he had been paying for Eliquis for the last eight years. 

When Bob signed up through the Marketplace, he thought he would have to pay a deductible, but that most of the cost of the drug would be covered by his policy. Bob was stunned when he went to the pharmacy only to be told that his prescription still costs $492, because the cost was being applied to his deductible of $6,000.

Bob had another painful surprise coming when he decided to go to the doctor for a persistent cough. He looked to see where his closest physician was who was part of his plan. He found the doctor’s office, 18 miles from where he lived. Considering traffic, that was around an hourlong drive. This is because, either intentionally or unintentionally, there are no participating primary care providers closer to Bob. It may make sense that it may be hard for a plan to cover all the bases with specialty care. But many PPACA plan beneficiaries can’t find primary care providers nearby. 

From a monetary position, if plans collect premiums and do not have to provide care, PPACA plans can become much more profitable. The plans benefit from forcing enrollees to pay for their own care. 

Patients enrolled in insurance plans are increasingly forgoing services because of the high deductible amounts. Insurance plans benefit by collecting premiums as patients forego services when they can’t afford deductibles. Providers are raking in cash when they get paid at full charges when patients have to pay high deductibles. It is the patient who is left out in the cold.

This is a terrible system. The worst of it is that patients are often foregoing lifesaving care they need because they can’t afford their deductibles and coinsurance amounts. Let’s change the system.

Programming Note: Listen to live reports from Timothy Powell every Tuesday on Talk Ten Tuesdays, 10 Eastern.