Fundamental Failure: Obamacare Deductibles Too Steep for Primary Consumers

At a recent meeting of the Wayne County Commissioners in Wooster, Ohio, the director of a local clinic that provides medical care for low income individuals said that the high deductibles in the federal Exchanges have created new barriers to health care and that the expansion of Medicaid has shifted the burden of low income medical care from the community and private charity to the state and federal governments.

Jaime Parsons, executive director of the Viola Startzman Free Clinic in Wooster, came to the commissioners seeking a Community Development Block Grant in April. She said the clinic decided to become Medicaid certified for the first time this year because of Governor Kasich’s decision to expand Medicaid as a part of the Affordable Care Act. The clinic, which treated 2,259 patients in 2013 for a total of 9,826 patient visits, is now steering patients to Medicaid “instead of treating them for free and using community funding,” Parsons said. The Daily Record reported in February that the clinic is being “forced” to drop the word “free” from its name because it now accepts Medicaid patients.

Despite the expansion of Medicaid, 52% of the Viola Startzman Clinic’s clients remain effectively uninsured, despite efforts of Navigators to enroll people in the federal insurance Marketplace.

Parsons said many people are choosing to remain uninsured:

“And the reason for that is that they were above the threshold for Medicaid, but they went onto the Exchange. They sat down with our Navigator, looked through the plans that were available, and they may have found that the subsidy completely covered their premium, but now they have a $4000 or a $6000 deductible.”

That is unaffordable for someone only bringing in $900 a month, according to Parsons.

In fact, the Affordable Care Act has created more barriers for the clinic’s patients:

“If you choose not to get that second job you stay under the income and qualify for Medicaid. But the moment you work an extra shift, you pick up a little overtime, you do those things that help you move out of the poverty that you’re living in, then it disqualifies you from free care and then you suddenly have this huge deductible hanging over your head.”

Many individuals “are required to pay the $6000 out-of-pocket before they get anything covered,” Parsons explained. “And so we have a lot of patients coming back to us and saying, ‘We bought this insurance. I did what I was supposed to do. I’m trying to be a good citizen and meet the requirements, and here I am, I can’t find a doctor to accept me. I can’t come up with the $200-$300 to just see a physician and get diagnosed.’”

Commissioner Scott Wiggam asked Parsons for clarification:

“Let me understand this. The 48% are on Medicaid and/or are insured some other way, so they can afford it. You’ve got 52% that may be signed up for Obamacare but there’s no way they’re going to afford it … or they’re better off not working at all and being completely covered?”

“That’s what we’re trying to prevent,” said Parsons. But she added that there are a lot of obstacles for these individuals.

Commissioner Jim Carmichael said, “If you’re not very sick, you don’t have insurance, just like it used to be. And if you are very sick, you go to the hospital and they have to accept you, right? And you’ve got a $6000 payment, so you’re probably not going to pay it, just like it used to be.”

“What has changed except that we’re funneling more money into some abyss?” asked Wiggam.

In many cases, hospitals are absorbing the deductibles of patients who can’t afford to pay.

But hospitals’ budgets are also being stretched by the Affordable Care Act. During negotiations leading up to the passage of the new healthcare law, hospitals agreed to $155 billion in cuts to the Medicaid disproportionate-share hospital (DSH) program over 10 years in exchange for provisions that would expand Medicaid in an attempt to reduce hospitals’ uncompensated-care costs. The DSH program provides funding to hospitals that treat indigent patients. Hospitals asked the Obama administration to delay the cuts, in part because of the unexpected unpaid cost-sharing from patients who have enrolled in high-deductible plans.

Craig Bjerke, an OhioHealth system vice president and corporate controller recently told The Dispatch that he expects OhioHealth’s bad debt numbers to grow faster than revenue in the future:

“We are anticipating they will go up in the future because of these high-deductible plans.”

Last December the President signed the Bipartisan Budget Act of 2013, which included the so-called “doc fix” that delays the Medicaid DSH reductions required under the ACA until FY2016 and doubles the reduction amount in that year. While the delay gives hospitals some temporary breathing room, it also delays the promised cost savings from the cuts that were supposed to help fund Medicaid expansion.

A recent Moody’s Investors Service report warned that bad debt is expected to increase in Ohio hospitals, in part because of the proliferation of high-deductible health plans that shift a greater percentage of healthcare costs to patients.

Crain’s Cleveland said earlier this year that an inability to collect payments could “threaten hospitals’ ability to make up for $155 billion in cuts to their federal reimbursements they agreed to absorb in order to expand insurance coverage under Obamacare.”

Commissioner Wiggam said that the problem of the uninsured has not been solved by the ACA:

“You’re going to have a ton of individuals in America that are in this position. They signed up, they’re in the 8 million, but they really don’t have health insurance. If something catastrophic happened, it’s like it used to be.”

Parsons agreed.

“There’s probably more of a need for us today than there was four years ago because everywhere in the world is cutting the funding to help this population of people thinking, ‘Oh, the government’s got it under control! We solved everything. We filled the gap.’ And it’s not filled.”


Paula Bolyard describes herself as a Christian first, conservative second, and Republican third. She is a member of the Wayne County Executive Committee and is owner and moderator of the Ohio Homeschool Yahoo! Group. She is a contributor atPJ Media LifestylePJ Media, and RedState.

All opinions expressed belong solely to their authors and may not be construed as the opinions of other writers or of OCR staff.

All Articles by Paula Bolyard


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