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.

Ouch.


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You mean it costs money? Like, out of my own pocket and not someone else’s?

oldroy on February 3, 2014 at 1:26 PM

I don’t care Obama is awesome.

Kataklysmic on February 3, 2014 at 1:28 PM

This is a great place for “Embrace the suck”.

HomeoftheBrave on February 3, 2014 at 1:28 PM

I wonder if the $6300 individual deduction is per person? I wonder why it’s so high in Georgia?

Cindy Munford on February 3, 2014 at 1:29 PM

There will be more uninsured in the years ahead than before the law took effect.

docflash on February 3, 2014 at 1:31 PM

….all by design.

Bee on February 3, 2014 at 1:32 PM

I wonder if the $6300 individual deduction is per person? I wonder why it’s so high in Georgia?

Cindy Munford on February 3, 2014 at 1:29 PM

Did Georgia vote for Romney?

Just sayin’.

;-)

NavyMustang on February 3, 2014 at 1:32 PM

Calgon, take me away!!!!!

cmsinaz on February 3, 2014 at 1:33 PM

I’ve been saying this for months and months. The vast majority of people will not pay $6000/year in health-related costs. In fact, $6000 is probably where a catastrophic policy should begin. Except that in the case of Obamacare, the price of $6000 usually also includes massive monthly premiums, unlike catastrophic claims.

So what is the point of buying health insurance? You’re better off paying out of pocket, and then, if something bad happens, purchasing insurance, which Obamacare allows you to do, preexisting conditions notwithstanding. The only negative to that equation is that unless you buy your policy off the Exchange, you won’t get premium assistance (assuming you would qualify in the first place), but that would only be until the next Exchange enrollment period anyway.

LOSER.

JoeShmoe99 on February 3, 2014 at 1:33 PM

You mean it costs money? Like, out of my own pocket and not someone else’s?

oldroy on February 3, 2014 at 1:26 PM

But if you make less than $250k a year, you won’t see a tax increase.

A filthy, greasy, shiftless, no-account liar told us so…

JohnGalt23 on February 3, 2014 at 1:33 PM

I wonder if the $6300 individual deduction is per person? I wonder why it’s so high in Georgia?

Cindy Munford on February 3, 2014 at 1:29 PM

No, it’s per plan, regardless of how many are on the plan. If you have a family of ten, I guess it’s not a bad deal. If it’s just two or three, it’s terrible.

JoeShmoe99 on February 3, 2014 at 1:34 PM

So?

Schadenfreude on February 3, 2014 at 1:35 PM

But these Obamacare posts are about whistling past the graveyard, by next Novemeber Democrats will be openly running on the ACA. Mark my words.

libfreeordie on December 20, 2013 at 10:14 AM

Credit to Schadenfreude.

Mark Boabaca on February 3, 2014 at 1:39 PM

What’s a de-ductible?

oldroy on February 3, 2014 at 1:43 PM

PwC is amongst the worst of the auditing/financial services firms anywhere. Not transparent at all, poor business partners and generally a terrible firm.

I immediately assume most if not everything they say is without regard for the whole truth but for a message they wish to send.

Zomcon JEM on February 3, 2014 at 1:44 PM

Regulating the prices at the county level was devilishly clever of these tyrants. What better way to punish flyover country and sub-urban/rural citizens than target them for higher premiums?

Murphy9 on February 3, 2014 at 1:46 PM

I wonder if the $6300 individual deduction is per person? I wonder why it’s so high in Georgia?

Cindy Munford on February 3, 2014 at 1:29 PM

Cindy – it is high in that area of Georgia because:

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 …

Whether deductible applies per family or by individual covered is a function of the individual policy.

The bulk of the Obamacare policies are on a per individual covered basis – Hot Air has posted links to articles where for some families of four the total deductible exposure PER YEAR is over $ 10,000.

Obamacare – proving anyone who voted for the SCOAMF was going to get EXACTLY what they deserved.

PolAgnostic on February 3, 2014 at 1:48 PM

Aren’t we supposed to call it the People’s Glorious Deductible?

rogerb on February 3, 2014 at 1:48 PM

No, it’s per plan, regardless of how many are on the plan. If you have a family of ten, I guess it’s not a bad deal. If it’s just two or three, it’s terrible.

JoeShmoe99 on February 3, 2014 at 1:34 PM

At this point aren’t we talking only about individual policies? I didn’t know there was such a thing as a family policy at this point in Obamacare.

oldroy on February 3, 2014 at 1:48 PM

The Real-World Middle Class Tax Rate: 75% (July 5, 2012)

If we include all taxes, the real-world tax rate is much higher than the “official” income tax rate.
For those Americans earning between $34,500 and $106,000, the real-world middle class tax burden in high-tax locales is 15% + 25% + 5% + 15% + 15% = 75%. Yes, 75%.

Murphy9 on February 3, 2014 at 1:52 PM

Also, the Bronze plans pay a miserable 60% of hospitalization- a HUGE expense of the employer standard of 80% (though some are now down to 70%).

michaelo on February 3, 2014 at 1:55 PM

I used to have an 80/20 policy up to 10K. Insurer paid 80 I paid 20 until $10,000. Or for the math challenged, $2,000 out of my pocket per year in deductibles. And they paid their 80 and I paid my 20 as we went through the year. Verby saw these numbers and thought Obamacare was offering better deals because out of pocket up front was 6 grand.

oldroy on February 3, 2014 at 1:56 PM

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.


Embrace the suck?

We haven’t gotten to the SUCK yet.

Harbinger of the SUCK: Friend at our Super Bowl party yesterday was telling us his sister’s employer just canceled their company health plan

… and the cheapest Obamacare plan is going to net out at $ 200 per month MORE with a deductible of THREE times her current plan for their family.

They CAN’T afford the extra $ 200 per month.

So they will just be LOSING health insurance.

Obamacare – How long till the DEMOCRATS in the House and the Senate march on the White House with torches and pitchforks?

PolAgnostic on February 3, 2014 at 1:56 PM

And if it’s not a covered service, prescription, doctor, etc it no longer contributes to your out of pocket deductible.

2nd Ammendment Mother on February 3, 2014 at 1:59 PM

Obama has so corrupted and screwed up this country that it is no longer recognizable and probably can’t be rehabilitated.

rplat on February 3, 2014 at 2:01 PM

I am very very lucky. I just enrolled in my 2014 insurance and my costs did not go up nor my deductible.

If I hear one of my teammates complain about our insurance I’m going to pop them in the nose.

gophergirl on February 3, 2014 at 2:02 PM

MADISON, N.J., Feb. 3, 2014 /PRNewswire/ — A final rule issued today by the U.S. Department of Health and Human Services (HHS) giving Americans increased access to their personal health information will empower patients to exercise greater control over their health, according to Quest Diagnostics (DGX), the world’s leading provider of diagnostic information services.

http://finance.yahoo.com/news/rules-opening-access-lab-test-183500719.html

Let me guess…Quest Diagnostics is the official Democrat donor crony and will be awarded a no-bid contract to be the sole provider of test results.

Murphy9 on February 3, 2014 at 2:03 PM

Thanks Obama and Dems.

My work coverage went up or got worse in every respect.

Office visit copay, -up; Specialist copay- gone; Deductible- up $250; Coinsure- up $750.

Obamacaretax~ the gift that keeps taking.

profitsbeard on February 3, 2014 at 2:05 PM

So the guy in Georgia has to pay 32,000 a year for health insurance! On what planet is that affordable!!!???!!
Take note as this is exactly how the destruction of the middle class and our country will happen.
And know this…when the government is involved an outlier like this WILL soon enough become the norm.

Caseoftheblues on February 3, 2014 at 2:08 PM

What’s a de-ductible?

oldroy on February 3, 2014 at 1:43 PM

It’s the remainder when ductable is subtracted.

Tsar of Earth on February 3, 2014 at 2:09 PM

or ductible.

Tsar of Earth on February 3, 2014 at 2:10 PM

An even bigger problem, in some cases, is the out-of-pocket maximum, which is different from the deductible. Roughly half the bronze plans do not allow a copay arrangement to kick in until the deductible is met. For an insured couple, the deductible could be $10,000 or more. Until that much has been spent out of pocket, the insured couple are responsible for 100% of the cost of doctor visits, scans, lab work, ER treatment, ambulance rides, etc. Only after spending the $10,000 does the copay become active …

Since many bronze plan buyers probably don’t have $10,000 to spend, they will never hit the deductible and thus will never get any benefit from their “insurance.”

sauropod on February 3, 2014 at 2:13 PM

JoeShmoe99 on February 3, 2014 at 1:34 PM

I have to say, when I had some issues a few years ago, our insurance paid a lot of it and I don’t think we ever met the deductible.

Cindy Munford on February 3, 2014 at 2:13 PM

Not to worry! King Barack the Magnificent assured everyone that they’d average $2,500 in SAVINGS on health care each year!

GarandFan on February 3, 2014 at 2:19 PM

NavyMustang on February 3, 2014 at 1:32 PM

Nope. The only area that really voted for Obama was in city areas like Atlanta. Overall the state was for Romney.

Barred on February 3, 2014 at 2:23 PM

The deductible issue is even worse than that. Our options only have embedded deductibles not aggregate deductibles.

hopeful on February 3, 2014 at 2:25 PM

It’s basically major medical now, at double the cost.

PattyJ on February 3, 2014 at 2:35 PM

JoeShmoe99 on February 3, 2014 at 1:33 PM

Yes Many people will not hit their deductible limit. Those who do, will be ruined. $6000 = $500/month just to pay the deductibles, on top of their premiums

I once had a $6000 deductible, low premium insurance with an HSA (health savings account). The best policy I had. Tiny premium. I socked the premium difference plus more when I had it, tax exempt, into the HSA. The balance rolled over, and I built a reserve despite pulling a couple thousand a year out of the HSA for co pays, deductibles, tests and treaments. It was the only time in my life I didn’t have to scrape to pay medical bills. I still have a good balance to spend down since I no longer have qualifying coverage

No one on OBamacare will have a nickel, and I can buy glasses, get dental etc for years to come from the old account.

If I ever had run out of HSA money for the 6K deductible, I could have set up a payment plan with the hospital. I could put the same money as usual each month into the HSA tax exempt, but pull out part of it to make payments to the hospital. My balance would still grow. Any hospital would take payments over a bankrupt non paying patient

Obamacare killed it. The HSA is replaced by Obamacare subsidies, and only the privileged qualify

entagor on February 3, 2014 at 2:42 PM

An even bigger problem, in some cases, is the out-of-pocket maximum, which is different from the deductible. Roughly half the bronze plans do not allow a copay arrangement to kick in until the deductible is met. For an insured couple, the deductible could be $10,000 or more. Until that much has been spent out of pocket, the insured couple are responsible for 100% of the cost of doctor visits, scans, lab work, ER treatment, ambulance rides, etc. Only after spending the $10,000 does the copay become active …

Since many bronze plan buyers probably don’t have $10,000 to spend, they will never hit the deductible and thus will never get any benefit from their “insurance.”

sauropod on February 3, 2014 at 2:13 PM

Here are a couple other points that will hit home by April 2015 for the 53% of households that actual pay federal income taxes:

(1)Obamacare lowered the maximum pre-tax payroll deduction for the Health Flexible Spending Accounts to $2,500 AND

(2) Increased the threshold for tax deductibility of unrecovered medical costs from 7.5% of adjusted gross income to 10% of AGI.

So Obamacare made healthcare more affordable and better through:
(1) Higher premium costs for worse coverage
(2) Higher co-pays
(3) Higher medical deductibles
(4) Higher out of pocket maximums
(5) Lower limits for managing your out of pocket costs through FSAs
(6) Higher threshold for being able to deduct your medical expenses from your taxes.
(7) Fewer doctors and medical providers in general to choose from for your care
(8) Losing your relationship with your doctor or care provider

Brilliant!

in_awe on February 3, 2014 at 3:06 PM

Not to worry! King Barack the Magnificent assured everyone that they’d average $2,500 in SAVINGS on health care each year!

GarandFan on February 3, 2014 at 2:19 PM

Think of all those premiums you won’t have to pay when they’ve planted you in the ground!!

Axeman on February 3, 2014 at 3:42 PM

Not to worry! King Barack the Magnificent assured everyone that they’d average $2,500 in SAVINGS on health care each year!

GarandFan on February 3, 2014 at 2:19 PM

Think of all those premiums you won’t have to pay when they’ve planted you in the ground!!

Axeman on February 3, 2014 at 3:42 PM

I mean over time those savings are going to be HUGE!

Axeman on February 3, 2014 at 3:43 PM

I wonder if the $6300 individual deduction is per person? I wonder why it’s so high in Georgia?

Cindy Munford on February 3, 2014 at 1:29 PM

Mine went from $2500 to $6500 for just an individual plan. That was thru Bluecross’ version of the bronze plan. Of course thanks to Obama and the state insurance commissar I get to keep my old plan for one more year. Co-pays doubled or worse. Premiums went up $700 per year and are due monthly. Suffice it to say, those who favored obamacare don’t like talking to me, especially when I mention that if I had gotten cancer while on the bronze plan instead of last year my out of pocket costs would jump from oh 15k to about 20k. That was for just two surgeries and two overnight stays in a hospital.

But hey, Chevy cares about fighting cancer via a sappy superbowl ad so support chevy gov. motors.

Oh, and my county went for Romney in 2012 by 3%, one of the few in the Portland/Salem area.

/not bitter
// yeah I’m bitter and have no patience anymore. This is war folks.

oryguncon on February 3, 2014 at 3:58 PM

I imagine Obama got F’s in economics.

sadatoni on February 3, 2014 at 4:06 PM

oryguncon on February 3, 2014 at 3:58 PM

This is crazy.

Cindy Munford on February 3, 2014 at 4:24 PM

That’s right. This is sticker shock number 2. If the premiums to cover services you don’t want or need don’t get you, the deductibles for the services you do need will. Most bronze plan deductibles are over $5,000. Ouch indeed.

Anyone can check what their premium+out of pocket will be versus what it would cost to pay retail plus the penalty at this nifty (albiet very old school html) web site:

http://occosts.1apps.com

Pass it on to all of your friends and relatives who are struggling to figure all of this insurance stuff out.

gengwall on February 3, 2014 at 5:17 PM

As Mayor Koch once remarked right after Dinkins was elected in NYC:

“The people have spoken … and they must be punished.”

riddick on February 3, 2014 at 7:50 PM

Since many bronze plan buyers probably don’t have $10,000 to spend, they will never hit the deductible and thus will never get any benefit from their “insurance.”

sauropod on February 3, 2014 at 2:13 PM

Fuuny how that in a few arguments I had with local liberals last year, when I stated that they will be paying for HusseinCare while not at all assured of actually getting treatment they were arguing that I got it wrong.

PT Barnum was so on point so many years ago…

riddick on February 3, 2014 at 7:54 PM

PwC is amongst the worst of the auditing/financial services firms anywhere. Not transparent at all, poor business partners and generally a terrible firm.

I immediately assume most if not everything they say is without regard for the whole truth but for a message they wish to send.

Zomcon JEM on February 3, 2014 at 1:44 PM

And you know this because…?

bigbeachbird on February 4, 2014 at 12:00 AM

and then hotair will run out of material to bash the President on…that’s what you’re really afraid of, right?

nonpartisan on November 19, 2013 at 4:47 PM

But these Obamacare posts are about whistling past the graveyard, by next Novemeber Democrats will be openly running on the ACA. Mark my words.

libfreeordie on December 20, 2013 at 10:14 AM

Chris of Rights on February 4, 2014 at 8:39 AM

Embrace the suck?

We haven’t gotten to the SUCK yet.

Harbinger of the SUCK: Friend at our Super Bowl party yesterday was telling us his sister’s employer just canceled their company health plan …

… and the cheapest Obamacare plan is going to net out at $ 200 per month MORE with a deductible of THREE times her current plan for their family.

They CAN’T afford the extra $ 200 per month.

So they will just be LOSING health insurance.

Obamacare – How long till the DEMOCRATS in the House and the Senate march on the White House with torches and pitchforks?

PolAgnostic on February 3, 2014 at 1:56 PM

Then there’s the best part: after the inability to actually purchase a policy (due to the constant chicanery and thievery involved in this ‘law’), they will be taxed for their inability to provide an insurance policy for themselves as required by law.

DrScottMD on February 4, 2014 at 9:07 PM