Uninsured & Underinsured Patients Rub Against Hospitals' Bottom Lines

The next two years will be rocky for healthcare providers as the number of uninsured and underinsured patients is expected to soar until the full force of the Patient Protection and Affordable Care Act kicks into action.

In 2015 a greater percentage of the population will either be covered by health insurance or will have greater government protection through Medicaid expansion. In the meantime, prepare for a big increase in self-pays and patients with higher deductibles.

These next two years will be bridge years for healthcare reform and stressful to healthcare revenue cycle managers across the country. Here’s what’s ahead:

Self-Pays and Uninsured Patients

In 2011, the most recent year with complete data, the number of uninsured fell after four straight years of increases. In 2011, the percentage of people without health insurance fell by more than half a percentage point to 15.7 percent, some 48.6 million people. At the same time the percentage of people with health insurance increased half a percentage point to 84.3 percent or 260.2 million.

That dip, however, was no doubt the result of the first stage of healthcare reform which enabled parents to expand their employer-sponsored health insurance coverage to their young adult children. When 2012 data becomes available, expect to see the upward trend in uninsured resume and continue through 2015. The Congressional Budget Office has already released projections of a bump in the number of the uninsured.

The increase in self-pays will continue to burden providers who can expect a corresponding increase in patients unwilling to pay their medical bills.

Underinsured Patients

A greater risk to healthcare providers’ revenue streams will be the underinsured, especially those individuals electing to or being forced to accept health insurance coverage with higher deductibles. Statistics have demonstrated that one in five with high-deductible plans will have trouble paying their portion of healthcare costs.

The good news is that under healthcare reform, those out-of-pocket costs will be capped, but a recent study suggests that the cap will mean higher deductibles for more people.

Currently one-third of all health insurance plans sold in the U.S. exceed the deductible cap. When the law takes effect in 2014, expect health insurance companies to bring down the plans that are in violation by increasing the deductibles on everyone else.

For providers this could mean an explosion in higher-deductible plans and with it an increase in delinquent accounts receivable.

John Owen is the Director of Client Development at DECA Financial Services in Fishers, Indiana. Check out other great content in the DECA Blog–Bottom Line Results Matter–on insidePatientFinance.com.