Average out-of-pocket spending for these respiratory hospitalizations was $1,961 for patients with cheaper high-deductible plans versus $1,653 for patients in traditional plans typically with lower deductibles.
But that’s on average. Folks with a $5,000 deductible plan could very easily wind up facing a bill of at least $5,000, Eisenberg added.
Young adults tended to face the greatest gap in out-of-pocket costs between low- and high-deductible plans, the researchers found. They theorized this could be because, since young people are healthier on average, their hospitalizations might reflect more serious illness requiring more expensive treatment.
Congress passed legislation waiving all out-of-pocket expenses for COVID-19 testing, and many private insurance companies have voluntarily extended such cost-sharing waivers to treatment as well.
But about 60% of employer-sponsored health plans are self-funded plans, where the employer provides direct reimbursement for health benefits and assumes all the financial risk of medical care for their employees. Such plans are not obliged to waive cost-sharing for COVID-19 treatment, even if the insurance company operating the plan has said it will.
“If you work for a large company that’s self-insured, it’s not the insurance company’s decision about what to cover and what not to cover. It’s your employer’s decision,” Eisenberg said.
The level of out-of-pocket billing in this study could very easily ruin a family that’s scraping by, said Matthew Rae, associate director of the Kaiser Family Foundation’s Program on the Health Care Marketplace.
“One of the things we know about medical debt is that relatively small amounts of debt can put people into a spiral,” Rae said.
Rae coauthored a similar study in March, which found respiratory patients put on a ventilator for four days or more ran up hospital bills of $88,000 on average. Pneumonia patients faced average out-of-pocket costs of between $1,300 and $1,464.
In some ways, the COVID-19 pandemic has revealed the pitfalls of using cost-sharing measures like deductibles and copays to reduce costs by making patients think twice before seeking medical care, Rae said.
“We have for the last 15 years or so had this theory that we wanted people to have more skin in the game, more exposure to the cost of health care,” Rae said. “That is coming up against the fact that sometimes we really want people to get the care they need to get, and they don’t have the financial assets to cover the cost. The theories that help us in normal times aren’t helping us during a pandemic.”