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Even before the pandemic, many insured people were struggling to pay out-of-pocket medical bills. Then, while some insurers waived deductibles and copays for those who needed treatment for COVID-19, many out-of-pocket costs were still not covered.
According to University of Michigan research, 71.2 percent of 1,377 Americans with private insurance had an average of $788 in out-of-pocket expenditures for professional and ancillary services that were not covered by waivers. For 4.6 percent of the patients whose hospital stay copays weren't covered by waivers, mean out-of-pocket spending was $3,840.
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Now even those waivers are ending – and 46 percent of the 150 insurers listed on the America's Health Insurance Plans' website never waived deductible copays at all.
"While many health insurers provided waivers for copays and deductibles during the pandemic, those waivers are now expiring and it's only a matter of time that people will have to pay out of their own pockets," says Tamara St. Claire, CEO of Vive Benefits in San Jose.
Moreover, most waivers didn't include self-funded plans, of which 61 percent of Americans are enrolled, according to the Kaiser Family Foundation.
As the pandemic stubbornly lingers, more than a third of insured adults are having problems paying medical bills, roughly the same percentage as those struggling before the pandemic hit, according to a survey of 5,450 adults by The Commonwealth Fund.
Those paying some or all of their medical bills either used up all or most of their savings or took on credit card debt – or both. Many delayed their education or career plans – and more than a few were even unable to pay for basic necessities like food or rent.
"This was a perfect storm even prior to COVID, but now with the added pressure of the pandemic and the expirations of waivers coming to an end, it's worse – it's now a medical expense crisis," St. Claire says.
Vive offers a no-fee, no-interest financial solution that pairs with and improves HSA-linked CDHPs, she says. Employees enrolled in a Vive HDHP are given a no-interest credit facility that covers deductible costs beyond the balance of their HSA. Because Vive also administers HSAs, everything is managed when members use their Vive card to pay for all their qualified medical expenses.
Vive pays for expenses using an employee's existing HSA savings and the Vive zero-interest credit program, St. Claire says. If the employee's HSA savings are greater than the amount of the expense, only the HSA savings are used.
If an expense exceeds what is available in the employee's HSA, then Vive uses the available HSA funds and then covers the balance by pulling from the employee's zero-interest line of credit, she says. The zero-interest line of credit then automatically gets paid down each pay period as new HSA contributions arrive. And all repayments are tax-free and there's no change in the employee's paycheck. Monthly costs don't change, St. Claire says. The individual's monthly contribution will help build savings for future medical expenses and, if the individual utilized Vive credit, that contribution automatically becomes the repayment amount until the loan is paid.
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Katie Kuehner-Hebert
Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.
