The New York Times has a good article on the limited balance sheets of many Americans and our inability to absorb a shock. Health insurance has made the systemic shock absorbers better but still insufficient for a lot of people.
the new poll, conducted by The New York Times and the Kaiser Family Foundation, roughly 20 percent of people under age 65 with health insurance nonetheless reported having problems paying their medical bills over the last year. By comparison, 53 percent of people without insurance said the same….
Medical bill problems rarely occur in a vacuum, the survey found. Most of the people surveyed said their finances were tight even before there was an illness in their family….
. Twenty-nine percent of the people with medical bill problems said a family member had been forced to stop working or cut back on hours….“Is that a job problem or a medical bill problem?” said David Himmelstein, a professor of public health at the City University of New York’s Hunter College School of Public Health who has studied medical bankruptcies. “It’s both of those things.”
Medical insurance pays medical bills. It does not cover parking at the hospital, it does not cover unpaid time off to go to an appointment, and increasingly covers a smaller total percentage of the cost of treatment. The ideal solution that can’t be implemented in any reasonable time frame is to have massive wage gains throughout the entire working population while hard to substitute base costs (the ‘nut’) stay constant or decrease in real and nominal terms. Furthermore, increasing the safety net for non-working adults and children would be needed as well as an expansion of cheap credit to act as short term bridges. But we are not building Sweden with better weather.
Other potential solutions may be used as ad hoc bridges.
Kaiser Health News has an interesting article about lump sum insurance that is becoming more common:
Forty-five percent of employers with 500 or more workers offered the plans last year, up from 34 percent in 2009, according to benefits consultant Mercer. Employees are generally responsible for the cost of coverage, although in some cases bosses contribute to the premiums….
Forty-six percent of workers covered by insurance on the job faced a deductible of at least $1,000 in 2015, up from 22 percent in 2009…
plans provide an average $15,000 payout to workers diagnosed with one of the conditions covered under the policy. Plans sold on the individual market pay $31,000 on average, Gen Re said, but applicants generally have to go through medical underwriting to qualify. Employer plans usually don’t require that….
The problem is that this insurance is medically underwritten for the individual market, and the qualifications needed to trigger a pay-out are extremely tight and hard to meet.