July 13, 2017
Aaron Carroll had an interesting Upshot piece comparing the merits of Medicaid and private insurance. It focuses on the fact that Medicaid is largely free for beneficiaries, while private insurance typically has substantial co-pays and deductibles. The piece points out that these fees can provide a substantial disincentive for getting health care, especially for lower income people.
While this might be a good way to save the system money if it discourages unnecessary care, which was a major reason the Affordable Care Act encouraged such fees, research shows that people also put off necessary care as a result of such fees. As a result, private insurance may end up leading to worse health outcomes than Medicaid for many low- and moderate-income people.
While this discussion is useful, there is another aspect to the fees that it ignores. Insurers often make mistakes which require patients to spend many extra hours pursuing claims. In many cases, they may not be compensated for care which should be covered if they don’t spend the necessary time. Even if they do get compensated, this is a needless waste of people’s time which is not factored into standard analysis on health care costs.
While it is always dangerous to generalize from very personal experiences, my guess is that my wife and I had to follow up in some manner on at least 20 percent of our claims. In some cases, this could be a single phone call, in other cases it could mean extensive back and forth between the provider and insurer, requiring multiple documents and authorizations. It is hard to believe that our experience is all that atypical or that we are especially bad at filling out forms. (My wife is also an economist who is pretty good at dealing with forms and numbers.)
Anyhow, this is an aspect of co-pays and deductibles that can be especially annoying to patients. Remember, people are most likely to be dealing with large numbers of claims when they are suffering from a health problem. This is not the best time to add another problem to their life.
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