Rising medical costs burdening consumers more than ever
By Alex Nixon
Published: Thursday, July 11, 2013, 12:01 a.m.
Dorothy Rossi has coronary artery disease and was rushed from her McCandless home to UPMC Passavant three times in the past 18 months when her blood pressure spiked.
The 75-year-old widow has health insurance from the government's Medicare and Medicaid programs and a Medicare supplemental plan. Those plans covered most of the more than $36,000 that UPMC charged.
But Rossi, who lives on $652 a month from Social Security, still racked up bills totaling $1,050 — the out-of-pocket portion for treatments.
Rising out-of-pocket medical costs — the deductibles, co-payments and premium-sharing that increasingly are common components of health insurance — are squeezing household finances across the country for retirees and employees.
The government, concerned about skyrocketing spending on Medicare, increased patients' co-payments. Employers, socked with rising premiums for providing health coverage, are trying to rein in expenses by raising deductibles and other forms of cost-sharing.
“People are more exposed than ever before to the cost in health care because of changes in benefit design that shift more cost onto the individual,” said Sara Collins, an economist and vice president with Commonwealth Fund, a private foundation in New York that studies the health care system.
In 2003, about 18 million adult Americans spent at least 10 percent of their household income on out-of-pocket medical expenses, Collins said. By 2012, that figure had risen to about 32 million adults.
Deductibles — a set amount of money a person with insurance must pay before coverage kicks in — more than doubled in the past decade, according to the Kaiser Family Foundation, a California organization that researches health care issues. The average deductible for an individual in 2011 was $1,123, up from $518 in 2003, the foundation found.
Employers shifted more of the cost of health care onto employees in recent years, Collins said.
The average annual family premium in 2012 was $15,745, 30 percent higher than in 2007, and nearly double the cost in 2002, Kaiser research shows.
Cost-sharing in the government's Medicare program hasn't risen as quickly but the nation's elderly can face substantial bills, said Stuart Guterman, a vice president with Commonwealth Fund who studies Medicare.
Out-of-pocket medical costs accounted for 16.2 percent of the median Medicare beneficiary's household income in 2006, up from 11.9 percent in 1997, according to Kaiser.
“There's no way to avoid the rising cost of health care,” Guterman said.
Rossi is struggling to pay her debt from hospital visits. She thought she was keeping up with a monthly payment plan, but UPMC recently turned her account over to a debt-collection agency.
UPMC declined comment on Rossi's situation, citing federal patient-privacy law.
Rossi said she was charged co-pays of $325 for each of two admissions to UPMC Passavant, in February and December 2012, and $400 for a January stay.
Though she couldn't pay the bills all at once, Rossi negotiated a payment plan with UPMC and in June 2012 started sending checks of at least $15 a month.
Last month, she said, a notice arrived in the mail from Credit Management Co., a Green Tree debt-collection company, demanding payment for her first UPMC Passavant visit.
“I was very shocked to find that I was turned over to a collection agency,” she said.
Credit Management officials could not be reached for comment.
Rossi discovered that her monthly checks were applied only to the first of the three bills. She thought her payments were going toward her total debt, but the two bills from her December and January visits were sitting unpaid.
“I thought they were all lumped together,” she said. “They didn't even call to let me know.”
Though she would not comment on Rossi's situation, spokeswoman Wendy Zellner said UPMC attempts to contact patients who owe money a minimum of three or four times by mail and/or phone “before a patient's bill is sent to collections.”
Rossi said she is sending a second $15 check each month to UPMC and hopes to work out a payment plan with Credit Management.
Rossi said the experience, combined with the fear of being saddled with more bills, will discourage her from seeking treatment at the hospital.
“I can't afford to,” she said during a recent interview in her neatly kept home on a quiet drive off Perry Highway. “I'm going to try to keep healthy on my own.”
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.
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