Patient Deductibles Jump 150 Percent in One Year

As a larger percentage of uncompensated care is the result of the inability of insured patients to pay their co-insurance and deductibles, healthcare providers can expect that trend to continue based on new research from TransUnion Healthcare.

The majority (83 percent) of uncompensated care, some $41 billion in 2011, comes from self pays and balance-after-insurance. TransUnion Healthcare found that the latter category has exploded and projected that it is likely to grow.

The impact of healthcare costs on insured consumers has not been a story with much traction in the media. “I don’t think the national conversation has gone deep enough,” said TransUnion Healthcare President Milton Silva-Craig in an interview last week.

Overall TransUnion’s research found that among the insured, patient responsibility–copays, co-insurance, and deductibles–increased 22 percent between the last quarter of 2011 and the final quarter of 2012. “I don’t think we had an appreciation for the velocity of that growth,” said Silva-Craig.

The research also found that the average deductible has exploded, from $400 in 2011 to more than $1,000 in 2012. “That’s a 150 percent increase in one year,” Silva-Craig said.

“If you as a provider are not getting your arms around this particular issue–where it’s going to impact the consumer’s wallet–and you don’t have the tools to engage them more transparently, guess what? Your uncompensated care problem is not going away, it’s only going to get pronounced and acute,” he said.

Other findings from the TranUnion survey show:

• Patient out-of-pocket costs increased from $1,678 in 2011 to $2,042 in 2012.
• Consumer credit lines remained essentially flat, averaging $34,430 in 2011 and dropping slightly to $34,301 in 2012.
• A ratio comparing available revolving credit to the  healthcare costs highlights was 20.5 to 1. “For every $100 in healthcare costs, consumers had $2,050 in revolving credit to make those payments,” according to a press release on the research. ”At the conclusion of 2012, this ratio dropped to 16.8 to 1, or $1,680 in available credit for every $100 in healthcare costs..
• Average revolving balances for consumers dropped from $13,079 in  2011 to $12,373 in  2012. “These balances also dropped for subprime consumers, the segment of the population with the riskiest credit, moving from $9,992 to $8,747 between the conclusions of 2011 and 2012,” according to the press release, which according to Silva-Craig means that consumers have been able to manage increased out-of-pocket medical expenses within their available credit. “But as those costs continue to rise, there is a concern that consumers—particularly those in the nonprime credit tiers, already strapped for cash—may find themselves in a tight position financially, as healthcare costs compete for a larger share of their disposable income,” Silva-Craig said.
• TransUnion’s analysis found that certain segments of the patient population are facing more difficult challenges than others, according to the press release. Consumers in the prime plus credit category, which includes the most accounts of any credit segment, have actually experienced an increase in their available revolving credit from $21,717 to $22,587 between 2011 and 2012. In contrast, consumers falling in the subprime category have seen their available revolving credit decline from an already low $1,414 to $1,406 between 2011 and 2012.