Health insurance plans are increasingly developing higher deductibles and narrower networks in response to federal policy and service requirements. The expansion in health insurance coverage due to policies such as the Affordable Care Act (ACA) has significantly increased the number of insured Americans. However, although the policies have expanded access to health care, they have also made it such that consumers have to pay more out-of-pocket. Access to health insurance is insufficient if patients cannot utilize their benefits or afford to purchase coverage due to high out-of-pocket costs, high deductibles, and limited networks. This paper identifies and evaluates the impacts of federal health care policies on consumer costs.
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impacts of federal health care policies on consumer costs.
Affordable Care Act has transformed health insurance by changing the size of the provider network. Although narrow networks existed even before the implementation of the Affordable Care Act, they have increasingly grown as a result of the policy. Consumer protection measures such as the prohibition of medical underwritings have it challenging for insurers to rely on conventional strategies to keep their costs low (Morrisey, Rivlin, Nathan, & Hall, 2017). Insurance coverage plans that have narrow networks can benefit consumers by lowering premiums. Additionally, negotiations between insurers and health care providers on network participation encourage more efficient delivery of care (Polsky, Cidav, & Swanson, 2016).
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However, on the downside, narrow networks also pose a significant risk to consumers. The more a network gets more limited, the more it jeopardizes consumers’ ability to obtain needed medical care on time. Additionally, narrower networks also lead to increased out-of-pocket costs by turning away sicker patients (Gillen et al., 2018). Thus, as health plan networks continue to grow narrow, they increasingly continue to limit access to in-network providers, especially for patients with more health needs.
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High deductibles are designed to curtail medical spending. In an effort to keep their costs low in response to federal policies and service requirements, insurance firms are increasingly developing high deductibles in the hope that they will influence consumers to make good decisions regarding when they need medical care and when they do not. Thus, the main advantage of high deductible health plans is that they reduce the cost of care (Perez, 2017).
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However, they pose a risk to consumers in that most Americans do not have the medical expertise to distinguish between high and low-value care. To aggravate the issue, high-deductible plans do not discriminate between purchasing decisions. The average consumer does not often know what is wasteful and what is not, and, as a result, people in high-deductible plans tend to reduce their use of all types of medical care (Rabin, Jetty, Petterson, & Froehlich, 2020). When patients cut back on care indiscriminately, it leads to reduced access to health care.
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In conclusion, federal care policies are impacting consumer costs in two ways. Firstly, by narrowing networks, which have the positive impact of lowering premiums. However, narrowing networks also minimizes access to healthcare by making it such that consumers have to rely on out-of-pocket to access high-cost medical services. Secondly, by leading to high deductibles, which have the benefit of influencing consumers to make better spending decisions. However, on the downside, high deductibles generally cause decreased access to health care. Aggregately, the negative impacts of high deductibles insurance policies and narrow networks outweigh the benefits as they place a higher financial burden on patients.