ObamaCare sticker shock: Don’t forget the deductibles
posted at 1:21 pm on February 3, 2014 by Erika Johnsen
As ever, the fact that health insurers have been hiking up the prices of deductibles as one avenue through which they can help absorb the heightened costs of ObamaCare is not news to anyone who’s been paying attention — which is why a new study pointing to comparable premiums between ObamaCare-offered policies and employer-based policies doesn’t quite paint the whole picture of the law’s effects. Via the Fiscal Times:
According to a report released by PwC’s Health Research Institute, insurance premiums on the new health exchanges are cheaper than those paid by the majority of Americans who have employer-based coverage—partly because of high deductibles.
The report found that the average cost of premiums sold on the Obamacare exchanges is about $5,844 annually —or 4 percent less than the average cost of $6,119 for an employer-provided plan with comparable benefits. …
Still, PwC’s study doesn’t account for other costs to consumers—like deductibles, which are likely to be more expensive under the new plans. A study by HealthPocket Inc. in December found that the average individual deductible for Obamacare’s bronze plan was $5,081 a year—42 percent higher than the average deductible of $3,589 for an individually purchased plan.
“Picking one dimension as PwC and others do gives a distorted picture of what the consumer is likely to experience,” Joe Antos, health policy analyst at the conservative American Enterprise Institute said. He added that the PwC study also doesn’t mention other changes that affect consumers like insurers narrowing provider access.
Consumers in areas like, say, rural Georgia, where both skyrocketing premiums and heightened deductibles mean that health insurance is making less and less economic sense for a whole slew of people, via WaPo:
If Lee Mullins lived in Pittsburgh, he could buy mid-level health coverage for his family for $940 a month. If he lived in Beverly Hills, he would pay $1,405.
But Mullins, who builds custom swimming pools, lives in southwest Georgia. Here, a similar health plan for his family of four costs $2,654 a month. …
All the dynamics that drive up health costs have coalesced here in southwestern Georgia, pushing up premiums. Expensive chronic conditions such as obesity and cancer are common among the quarter million people in this region. One hospital system dominates the area, leaving little competition. Only one insurer is offering policies in the online marketplace, and many physicians are not participating, limiting consumer choice. …
Even some people who qualify for federal assistance, such as Stacie Brown, owner of a pottery shop, are balking. The cheapest “bronze” plan for Brown, her husband and son would cost the family $300 a month but not begin paying medical bills until they exceeded the $6,300 individual deductible.