High-deductible health insurance plans putting a tighter squeeze on  Habersham Medical Center’s finances

DEMOREST, Ga. -- Higher health insurance deductibles were not on most of our Christmas lists, but many Americans have been informed that 2014 will bring changes to their company health insurance plans.  And many have been shocked by the dramatic increase in their deductibles. Some deductibles have doubled and even tripled and are now as high as $5,000 annually.

Habersham Medical Center is anticipating a loss of more than $2.7 million in 2014 as a result of bad debt and charity care; a number that has increased by more than 66 percent in the last five yearswhile total patient revenue only increased 11 percent. 

Since the downturn in the economy, the medical center has been sounding the alarm about its deteriorating finances. “The financial bleeding can be contributed mainly to the increase in under-insured patients,” says Jerry Wise, president of Habersham Medical Center since April 2013.  “Now, hospitals across the country are bracing for an even higher number of unpaid hospital bills next year as a result of the higher deductibles.”

Many healthcare executives are also concerned that most uninsured Americans enrolling in the new federal health insurance exchange under the Affordable Care Act or Obama Care are going to buy the least expensive plans with high-deductibles.   Also, to save money and to cut rising health care costs, some companies are eliminating employer-sponsored health insurance; sending their employees into the health exchange with much less coverage than they had before.

The major concern for hospitals is the fact that patients with high-deductibles, whether from employer-sponsored insurance coverage or from the federal plans, will be faced with astonishing medical bills if they require hospital care.  High out-of-pocket costs are unaffordable and will leave hospitals with mounting unpaid bills and more charity care and bad debt.
Wise adds, “We all want to do the right thing and pay for the services we receive, but all of our wallets are being squeezed to a point where you have to make tough decisions.  For many of our patients, it’s a decision to pay the mortgage and feed the family or pay the hospital bill.”

Another growing concern for hospitals is the number of people who will put off needed treatment because of the high-deductibles or out-of-pocket costs.  “Unfortunately, we will see more patients in the emergency room with very severe illnesses,” says Lynn Echols, director of the Habersham Medical Center emergency room.  “For some, these illnesses could have been treated much earlier had they received care at the on-set of the illness or when they began experiencing warning signs.  This may be catastrophic on everyone’s finances.  Patients could be responsible for thousands of dollars, maybe $5,000 or more, before their insurance pays anything; far exceeding what most of us can pay. It’s a sad situation all the way around.”
Obama Care was originally touted as a way to help hospitals control costs relating to uncompensated care by requiring Americans to have health insurance and by expanding Medicaid eligibility. However, the surge in high-deductible plans could have the opposite effect should patientsbe financially unable to cover their share of the cost.

 “These are challenging times for health care providers,” adds Wise.  “Enrollment in the health exchange is currently far below expectations and has been marred with the federal website glitches and other complexities.”

Wise concludes, “As a result, Habersham Medical Center has worked hard to cut expenses and to increase collections in order to slow the rise in bad debt. We will continue to work hard while we wait and see how the consequences of a bad economy and rising healthcare costs will all play out.”