Some years ago I developed appendicitis—my vague abdominal pain turned into rebound tenderness during the course of an afternoon seeing patients. I walked myself from the outpatient area of the hospital to the emergency department, told the attending physician I had appendicitis, climbed onto a gurney, and had an appendectomy before the night was over. As a government employee belonging to a health maintenance organization, my total out-of-pocket costs were zero. I believe that was appropriate given that there was nothing I could have done to prevent appendicitis and I certainly was not in a position to shop for the best price on an appendectomy.
The study by Adrion et al1 shows how fortunate I was. In a review of hospital claims from 3 major commercial insurance plans, they found that mean out-of-pocket costs for appendicitis were $1509 in 2013. Overall, cost-sharing for hospitalization had increased 37% between 2009 and 2013, exceeding the rate of medical inflation. Although the Affordable Care Act places limits on out-of-pocket costs for policies purchased through the health exchange marketplace, that limit is almost $7000 a year, an amount that would be daunting to any person with a low or moderate income.
This situation raises a question: What is the point of out-of-pocket costs? If the purpose is to use them to steer people to higher-value care, I am all in. It seems to me that if certain procedures do not have to be performed or can be substituted with something less expensive, it is right to ask the insuree to pay a portion of the procedure. I feel the same way about expensive drugs. However, that is clearly not the issue when we are speaking of emergency hospitalizations.
Instead, it seems that out-of-pocket costs are being used so that the premiums of health insurance plans are lower. Although lower premiums make health insurance more accessible, requiring people who need hospitalization to pay substantial amounts for their care seems counter to the idea of insurance, which is to spread the risk across the whole population.
Even our language suggests that we have forgotten that the core purpose of health insurance is to protect people when an unexpected problem develops. When we speak of co-insurance, we mean the portion of the bill that the person has to pay: there is no “co-insurer.”
To require consumers to pay large amounts of out-of-pocket expenses for health care may lead to delay or foregoing of needed care or to financial ruin, the latter of which insurance is supposed to protect you against. There are no easy answers for how to deal with the rising cost of medical care, but increasing out-of-pocket spending for unavoidable, necessary care is counter to the goals of a health insurance system.
Conflict of Interest Disclosures: None reported.
Katz MH. Health Insurance for Emergency Hospitalization—Isn’t the Point to Pay the Bill?. JAMA Intern Med. 2016;176(9):1332-1333. doi:10.1001/jamainternmed.2016.3672