In one word, how would you describe the state of healthcare in America? Complex? Expensive? Inaccessible? Those are just a few common descriptors — even more so after a brutal pandemic that put the
Two years have passed since the onset of COVID-19 in the United States, and in that time, healthcare workers and patients have been forced past their breaking points, physically, mentally and financially. As it stands, Americans are in $140 billion worth of medical debt, and the Bureau of Labor Statistics estimates that nearly half a million healthcare workers have quit their jobs since February 2020. Meanwhile, the Centers for Disease Control and Prevention reported that U.S. lifeexpectancy dropped by 1.5 years in 2020, the biggest one-year decline since World War II.
“Everyone, whether providers or patients, are underresourced,” says India Gomez, a clinical psychologist with an independent practice in the San Francisco Bay Area. “The healthcare system is so bogged down, people are struggling to get medical supplies and can’t even get responses from their providers.”
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With lives on the line, healthcare companies, healthcare providers and patients alike are now questioning the existing system, and searching for paths to a more positive future. But optimism can be a challenge.
Under pressure
As Americans were grappling with the physical health risks and devastating loss created by the pandemic, another crisis was brewing beneath the surface as isolation, grief and stress challenged mental wellness.
Since, mental health care providers have seen the deterioration of mental health in the U.S. firsthand. According to the Kaiser Family Foundation, in 2019, only one in 10 adults reported symptoms of anxiety or depressive disorder. That number jumped to four in 10 adults in 2021. But over one-third of Americans live in areas with a shortage of mental health care providers.
“It is not sustainable for healthcare providers to continue to compensate for a very broken system,” says Gomez. “To sustain the level of intensity of care for such a prolonged period, it has actually caused me to scale back my work in the interest of my own health.”
As the pandemic ignited the mental health crisis, Gomez took on an influx of clients in 2020 and struggled to meet demand while juggling administrative challenges, which often include late or missing payments from insurance companies.
“I really care about my clients, so I can’t just drop whatever insurance company is not paying me properly,” Gomez says. “But I shouldn’t have to fight the system in order for my clients to access care. It just feels like corporate interests need to get out of the way.”
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Gomez’s frustrations are not unique. Research from the Congressional Budget Office found that insurance companies paid their in-network mental health care providers 13% to 14% less than Medicare did for the same services, after examining 39 million claims from Aetna, Humana and UnitedHealthcare members. Insurance companies may even limit the number of sessions providers can have with a patient.
Interestingly, the Mental Health Parity and Addiction Equity Act of 2008 is supposed to ensure health insurance companies provide mental health benefits that are comparable to medical benefits. But after 14 years, the Department of Labor, Health and Human Services and the Treasury put this law to the test and surveyed the first wave of health plan sponsors — and no one passed.
This won’t surprise most mental health care patients. Renée Fabian, lead health editor at drug pricing and telemedicine platform GoodRx, has been receiving mental health care since she was 19 years old. After finishing grad school, a change in insurance left Fabian with a trio of less-than-ideal options: stop seeing her trusted therapist and find a provider in her new network; stick with her current therapist and pay out of pocket; or try to get her insurance company to allow a single case agreement, which would set up a degree of coverage for an out-of-network provider.
“Getting that single case agreement took a lot of calls to the insurance company from both my therapist and me,” says Fabian. “I have this very vivid memory of standing outside my office building, phone in my hand, thinking, ‘my insurance company would much rather I die than pay for this treatment because it would be cheaper for them.’”
It took a month for Fabian to get the single case agreement, in which her therapist was not reimbursed. At times, Fabian recalls pulling 60 to 80 hours a week at work just to pay out-of-network costs.
“If I worked less, I couldn’t afford treatment,” Fabian says. “It felt a bit like a trap: I was working to get treatment so that I could keep working.”
With these challenges in mind, it’s not surprising that nearly 30 million adults and children living with mental health conditions do not receive any treatment, according to the National Alliance on Mental Illness. Unfortunately, lack of coverage and high healthcare costs do not end with mental health services — it can impact the ability to not only care for yourself and your family, but the ability to have a family in the first place.
Seeking support
Tiffany McMacken, president and owner of healthcare consulting company The Willow Group, started her family building journey at 37 years old, knowing she would receive zero financial coverage from her insurance or any assistance from her employer as she started fertility treatments.
“Being a mother was non-negotiable,” McMacken says. “I took out a loan from my 401(k), and then when I switched employers, I lived out of a suitcase for nine months in an Airbnb that my relocation package paid for, and saved every single cent I made.”
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McMacken estimates that between the costs of egg-freezing, getting an egg donor and in vitro fertilization, she spent north of $110,000 to have her son, who was born in 2017. This does not include the costs of labor and delivery, which were steep: McMacken’s son was born eight weeks early and spent 25 days in the NICU. (Thankfully, these costs were covered by insurance, dropping her out-of-pocket fees to about $2,000.)
“Part of me is relieved that my child is a boy,” says McMacken. “If he were a girl, I would be saving my money right now for her so she could freeze her eggs at 18 years old and then enjoy her life, go to college and build her career without some of these worries.”
The Centers for Disease Control and Prevention estimates that 6.1 million women in the U.S. struggle to get pregnant or stay pregnant. And yet, Dr. Jane Frederick, a reproductive endocrinologist, infertility specialist and medical director at HRC Fertility Clinic in Newport Beach, California, estimates that only 30% of her patients have insurance covering fertility treatments.
“Some insurance companies will not cover any treatment, while others say that they cover treatment but only cover the initial exam,” says Dr. Frederick. “It seems that insurance companies struggle to see infertility as a disease — it’s not something people choose to undergo. A patient just wants help having a family.”
Queer couples face even more barriers. Simply finding an inclusive fertility clinic can prove challenging, and the partner who is the non-genetic parent will need to complete legal documentation to have any rights over the child — it’s even recommended that queer couples secure a reproductive lawyer. Adoption remains an option, but one that, on average, costs $70,000, according to American Adoptions, an adoption agency and resource.
Only 15 states require private healthcare insurers to cover fertility treatments. But between 2015 and 2020, companies with over 500 employees saw an overall 4% increase in drug therapy, IVF and egg-freezing benefits, according to Mercer’s National Survey of EmployerSponsored Health Plans. Mercer now estimates that a third of employers with less than 500 employees offer fertility benefits, while 61% of employers with over 500 employees offer it. And the Dave Thomas Foundation for Adoption saw a nearly 8% increase in employer-provided financial assistance for adoption in 2021, with the contributed amount now averaging about $11,000. That hardly amounts to universal coverage, but it does mean fertility treatments are trending in the world of benefits, gaining traction and action from employers across industries.
Creating change
More than 155 million Americans rely on employer-sponsored coverage for their healthcare — approximately half of the U.S. population. Brandon Weber, co-founder and CEO of benefits brokerage Nava, is all too familiar with the challenges families face, even when they have coverage. Now, as a business leader in healthcare, he’s working to chip away at some historic issues.
“I come from a blue-collar family, and we were always one or two degrees of separation away from medical bankruptcy,” says Weber. “Then, as a CEO providing healthcare for employees, I witnessed a marketplace where costs would go up year after year while the user experience worsened.”
From 2013 to 2017, Weber served as CEO of leasing and asset management company Hightower, and found himself fighting to provide affordable, quality healthcare to his employees. He started exploring the relationship between employers and benefits brokers, who receive a fee from insurers each time they secure a new business as a client. There, Weber saw room for improvement, and pivoted his own career to focus on the opportunity.
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“Brokers are taking anywhere between 4% to 20% commission, which could amount to $50 or $60 billion a year for this industry,” says Weber. “That’s why brokers reinforce this status quo of healthcare costs going up. If it goes up by 10%, they get a 10% raise.”
Until the Consolidated Appropriations Act, which went into effect in December of 2021, brokers were not required to disclose their salary, commissions, kickbacks or perks received from insurance companies. And while Weber is hopeful the CAA will bring much-needed transparency to the broker industry, he wants Nava to be a leading part of the change.
“We are decoupling compensation from the commission, charging a flat fee to the employer — we don’t get a raise if your healthcare costs go up,” Weber says of his brokerage’s
model. “Instead, we will return 100% of our fees to the client if they are not satisfied with our work, and we are 100% transparent about any fees we collect.”
Alternative operating models like Nava’s may help provide some relief for employers as they struggle to provide affordable healthcare, but it will take more innovation to solve the medical debt crisis in the U.S.
Christine Cooper is the CEO of Aequum, an employer-provided benefit that protects health plan participants against unreasonable billings from healthcare providers and unfair medical debt collection practices. Essentially, when a patient receives a bill from a hospital for services rendered, that bill could contain charges as high as 1,200% above what those services would cost under Medicare, explains Cooper.
“Like any other business, hospitals can set their own starting point of negotiation for their prices — hospital facilities are negotiating with big insurance companies and individual healthcare plans,” she says. “These are incredibly inflated prices because they do not want to start too low.”
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Cooper points out that when a patient receives a bill, they may not understand that these charges can be inflated. However, starting in 2022, two laws may make these bills less common by introducing transparency into the healthcare market: the No Surprises Act and the hospital price transparency rule.
The No Surprises Act protects those covered by group and individual health plans from getting surprise medical bills when receiving care from out-of-network providers at in-network facilities, emergency services and services from air ambulance providers. This is especially important for those who have to undergo emergency care and can’t pick an in-network provider ahead of time; they should not be expected to pay an egregious bill, explains Cooper.
Additionally, hospital price transparency will require each hospital operating in the U.S. to provide pricing information for items and services in a comprehensive, machine-readable file, as well as in a consumer-friendly display.
“When you see your auto mechanic, they give you an estimate and you know what you’re paying for,” says Cooper. “The healthcare system should do the same thing. But plan participants need someone to advocate for them.”
Improvements ahead?
For Fabian, there are only two solutions: the U.S. healthcare system would have to switch to a value-based system where companies are incentivized to lower care costs and focus on prevention, or completely take private companies out of healthcare.
“People’s health shouldn’t be monetized,” Fabian says. “Why is there an incentive for people to stay unwell? My lack of health feels like a tradable commodity in this system.”
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While there is a bigger push for transparency in the healthcare ecosystem by employers and Congress, true change on a national level remains uncertain. Even laws like the No Surprises Act and the hospital price transparency rule may not see effective enforcement — after all, it took 14 years for government agencies to check if insurance companies were complying with the Mental Health Parity Act.
In the meantime, Gomez, Fabian and McMacken all encourage employers to provide benefits that account for the holes in the U.S. healthcare system, whether that means including fertility treatment assistance, health insurance plans with affordable out-of-network charges or insurers with proven fair reimbursement rates.
“Employers can improve access to care — and they should,” says Gomez. “We are in a medical and mental health crisis, and the more barriers there are to care, the more people will suffer. We need to see some really big changes or face dire consequences.”
