Healthcare

Deductible makes “affordable” health care unaffordable😢

Surprise, surprise!

Politicians conditioned Americans to focus on premiums and mislead them with the infamous “affordable” health care rhetoric. Too many Americans were convinced they could have it all if only the government stuck it to insurance companies and created competition.

Commentators who raised the red flag and tried to bring reality to the discussion were ridiculed by Obamacare supporters and the liberal left generally (including me). 

There is nothing magic going on here. The fact is, that if you want low premiums and more generous benefits (not to mention open enrollment) as promised by Obamacare, something else must give. That something is shifting more risk to the users of health care.

Health officials and insurance counselors cite several mitigating factors. All plans must cover preventive services like mammograms and colonoscopies without a deductible or co-payment. Some plans may help pay for some items, like generic drugs or visits to a primary care doctor, before patients have met the deductible. Under the Affordable Care Act, health plans must have an overall limit on out-of-pocket costs, to protect people with serious illness against financial ruin.  NYT 11-14-15

Those mitigating factors are some of the things that drive up premiums making other changes necessary in order to meet the political pressure to keep premiums “affordable.”

All this follows a pattern from the political left. As well intentioned as they may be, they continually fail to understand the reality of the real world. Everything has consequences, nothing is free, for every action there is a reaction and human nature tends to want to ignore it all and instead view things from the perspective of ones own interests only. 

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1 reply »

  1. And, anyone (and I mean anyone) ends up surprised to find that everyday Americans, those who think a $30 copay is a lot for a physician visit, will be surprised to find following coverage (contributions and out of pocket cost sharing) to be “unaffordable”?

    Here is the PROMISE of health reform. This is what passes for: “affordable”, “minimum essential coverage” of “minimum value”. This is what your employer (generally speaking) must offer in 2015 to meet the “employer shared responsibility” requirements:

    Assumes a worker earning “average” wage in America (using 2014 Social Security Average Wage Index of $46,481.52):
    (1) Contributions
    Single: 9.5% of household income: $368/month, $4,415/year
    Other than single: 100% of the cost of coverage, here estimated to be: $800/mo, $9,600/yr

    (2) Out of pocket cost sharing:
    Preventive services (Recommended A&B USPSTF): No deductible, 100% coinsurance (no out of pocket)
    All other services: $6,100 individual deductible (embedded, meaning each family member),
    Coinsurance: 80%/20% of expenses subject to deductible up to $6,600 (single), $13,200 (non-single)*.

    So, the maximum exposure for an individual at the 2014 average wage index of $46,481.52, is just over $10,000 a year, or about 17% of household income (for single coverage), $17,600 a year, or about 37% of household income (for non-single coverage). And, of course, averages are deceiving, so, for those at the median wage in America, $41,756 (3rd quarter 2015, median weekly wage, BLS), the percentages are somewhat higher.

    And, of course, the Obama Administration seems so out of touch on this issue (and they have ALWAYS BEEN OUT OF TOUCH on this issue) when they conclude that “access” is the issue, that everyone wants coverage modeled after the Federal Employees Health Benefit Plan (which is heavily subsidized by taxpayers), that the goal is to bring down the “entry cost” (here estimated to be, national rates, $375 (single) / $800 (non-single) for a plan with a $6,100 deductible). Not too surprising that they concluded this was the goal, the priority, because they were buying votes.

    If you ask the average, everyday American what the challenge was, it was simply that they had become enamored (intoxicated) with/by the $20 copays offered by HMOs in the 1990’s (one of the responses to the Clinton health reform initiative), and Americans were not ready for the resumption of double digit health care inflation after 2000 nor were they at all interested in the closed panel networks and medical management practices necessary to achieve “affordable” coverage.

    Anyone wonder why the PROMISE of health reform is so empty! Anyone wonder why the beneficiaries of the Patient Protection and Affordable Care Act of 2010 are so unappreciative for all the Obama Administration has done for them.

    They targeted the wrong cost item, the wrong group, and ignored the true challenge! Surprise, surprise, surprise!

    * Note, arbitrarily, the agencies decided to change how the expense maximum is applied, ignoring the clear text of the statute, and they decided that no individual family member need satisfy more than the $6,600 out of pocket expense maximum starting in 2016.

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