Healthcare access and affordability are shaping up to be a hot topic in the Hoosier State this year. It could not come at a more crucial time.
Healthcare spending per capita in Indiana grew 35% between 2013 and 2021, to a total of $8,494 in 2021. This led to 63% of Indiana residents experiencing at least one healthcare affordability burden in the last year and left more than 1 in 6 with medical debt in collections. There are several reasons for this current accessibility crisis.
Today, 8% of Indiana residents are uninsured. But while this reality has left more than half a million Hoosiers vulnerable to significant unexpected medical costs, even those covered by health insurance aren’t always protected from this outcome.
A new survey of Cigna, one of the country’s largest health insurers, shows how many claims are rejected without even being reviewed. During a two-month period in 2022, the insurer denied more than 300,000 payment claims, spending just 1.2 seconds on each case.
Such market realities have left Hoosiers with few options to affordably access the care they need. Fixing these problems will require close scrutiny of health care policy not only by elected officials in Indianapolis but also in Washington, DC. There are a few things they should keep in mind as they go through this process.
Community hospitals are one of the cornerstones of access to care and have also been negatively impacted by these trends. If more of these facilities close, Hoosiers, especially those in rural areas, will find not only cost, but also lack of availability, a barrier to accessing care.
As it stands, nearly 20 percent of the state’s rural hospitals have experienced a multi-year loss of service, and more than 1 in 10 are at risk of closing immediately.
This is due in part to an imbalance in the health care ecosystem that has given health insurers significant pricing power.
A wave of insurance industry consolidation has occurred in the wake of the Affordable Care Act, and today just two health insurance companies control nearly 75 percent of the Indiana market. Insurers have used this near-monopoly to raise premiums for employers and individuals, as well as reimburse hospitals at rates that increasingly fail to cover even the minimal costs of treating patients.
Ensuring hospitals receive a fair rate for services and lowering the cost of health insurance to make sure every Indiana resident can afford coverage should be top priorities for insurers. If the market can’t fix itself, lawmakers and regulators in Indianapolis and Washington may need to step in.
The 340B Drug Pricing Program is another important piece of the puzzle.
The 30-year program offers drug companies the ability to sell their products to Medicaid patients in exchange for providing discounted drugs to safety-net hospitals. A win for all parties involved, the program runs at virtually no cost to taxpayers and relatively low cost to drugmakers, who account for just 3.6% of the total drug market, and provides them with access to a guaranteed market. for their products in exchange.
The footprint may be small, but it makes a big difference as hospitals use program cost savings to provide free or heavily discounted charity care and medications to underinsured or uninsured patients.
With pharmacy prices soaring and more than 1 in 10 Indiana residents switching a drug due to cost, such programs are increasingly important.
Unfortunately, a legislative effort appears to be underway in Washington to modify or terminate the 340B. The Drug Pricing Transparency and Accountability Act, while well intentioned, would add new red tape to 340B that many smaller community hospitals may find impractical. The bill would also stop new enrollments in the program and could also force out hospitals that already participate.
Such changes could present new barriers to accessing care for some of Indiana’s most vulnerable citizens.
The American health care system is failing and patients are the ones who take the brunt of it. While there is no silver bullet to get America’s health care system back on track, implementing smart reforms and preserving successful programs would be a good start.
Dan Burton represented Indiana in the U.S. House from 1983 to 2013.
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