Health insurance plans are getting crummier, and these charts prove it

If you ask any economist the main purpose of health insurance, the answer you’ll probably get back is this: to protect against financial catastrophe.

Yes, the free annual check-ups or discounted gym memberships that health plans sometimes offer are nice. But the real thing you’re purchasing with your monthly premium is protection against financial ruin. You’re paying for someone else to be on the hook for the big medical bills that can and will pile up in the case of serious illness or accident.

Except, increasingly, insurance does not provide that type of protection. That’s the main takeaway from a new Commonwealth Fund report on the “underinsured,” or people who have health insurance that leaves them exposed to really big costs — and who appear to skip care due to the price.

The Commonwealth Fund counts adults as underinsured if they meet one of two conditions: their out-of-pocket costs totaled 10 percent or more of their income or if their deductible was 5 percent or more of total income. And they found that 23 percent of Americans with insurance fit into this category — up from 12 percent in 2003.

Underinsurance matters because it appears to deter people from seeking care. Underinsured people are far more likely to not go to the doctor when they have a medical problem; a quarter of the underinsured report doing this, compared with 12 percent of those with more robust coverage. They skip prescriptions, follow-up tests, and specialist visits at a rate that’s inching closer to the uninsured — people with no coverage at all.

Among lower-income adults, who would be hit significantly harder by a large medical bill than higher-earning insured adults, underinsurance is especially prevalent. The Commonwealth Fund data shows that people with lower incomes (less than 200 percent of the poverty line, or about $22,000 a year for an individual) are underinsured at twice the rate of people with higher incomes (those earning more than 200 percent of the poverty line).

When you dig into the data, you see that this is really a story about deductibles going up — way up. Insurance plans without deductibles are disappearing. And plans with big deductibles that used to be a rarity — those upward of $3,000 — are now becoming increasingly common.

Higher deductibles mean that consumers can still be on the hook for a lot of medical costs even after they pay their monthly premiums. This is especially true when you look at Obamacare’s insurance marketplaces, where deductibles greater than $5,000 are relatively routine, especially among the cheapest premium plans that consumers have gravitated toward.

The higher deductibles are part of a larger trend happening in the health insurance market right now: employers increasingly shifting the burden of paying for health care to workers.

Separate research shows that between 2011 and 2012, employees’ contributions to their own health-care costs grew by 2.1 percent — while employers’ contributions fell 0.5 percent.

That’s remarkable: employers actually spent less on health care between 2011 and 2012. But at the same time, they asked workers to spend more.

The theory of higher deductibles is that they’ll make consumers more cost-conscious. This recent bout of slow health-cost growth suggests this theory is right (as does a big, long body of research). But consumers don’t seem to be reaping the dividends of their cost-conscious decision-making. Those benefits go to the employer rather than the worker. Meanwhile, the Commonwealth Fund data suggests that consumers might be becoming cost-conscious in the wrong way: not cutting out elective treatments or unnecessary care, but skimping on prescription drugs or doctor visits that could prevent higher health-care costs in the long run.