NYT: High Obamacare deductibles make mandated insurance practically useless
posted at 8:41 pm on November 17, 2015 by Kristina Ribali
Remember the Affordable Care Act? The law that was supposed to lower the cost of health care by providing health insurance plans to the masses that were more affordable. That’s what we were promised, but the reality is that millions have seen their formally affordable premiums skyrocket, and now they’re also stuck with deductibles that are hard to swallow.
One man from New Jersey told the New York Times just how worthless his newly mandated plan has become.
“The deductible, $3,000 a year, makes it impossible to actually go to the doctor,” said David R. Reines, 60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. “We have insurance, but can’t afford to use it.”
Deductibles in the thousands of dollars are not uncommon. In fact, “in many states, more than half the plans offered for sale through HealthCare.gov, the federal online marketplace, have a deductible of $3,000 or more.” Once you add in several hundred dollars per month for your plan premium, a rate that may or may not be lower than it used to be and add in a $3,000 or more deductible, the average individual could be paying over $5,000 out of pocket in a year before their “affordable” insurance kicks in. This is true for employer sponsored plans as well.
Just this past September, I wrote about the Kaiser Family Foundation study showing deductibles on employer sponsored plans rose by almost 9 percent.
How many American families who need to get insurance via Obamacare have the ability to absorb more than $3,000 or $5,000 into their yearly budget? In this economy, with fairly stagnant wages, and millions of Americans leaving the labor force, it’s doubtful that’s an easy cost to absorb for low income earners or even the middle class.
Kevin Fanning of Texas told the New York Times that “Basically I was paying for insurance I could not afford to use.” Fanning said that he and his wife “had a policy with a monthly premium of about $500 and an annual deductible of about $10,000 after taking account of financial assistance. Their income is about $32,000 a year.” That’s nearly one-third of their income just to get the insurance company to cover them if they actually need to seek care.
Unsurprisingly, Fanning dropped his plan.
But it gets even worse.
“Our deductible is so high, we practically pay for all of our medical expenses out of pocket,” said Wendy Kaplan, 50, of Evanston, Ill. “So our policy is really there for emergencies only, and basic wellness appointments.”
Her family of four pays premiums of $1,200 a month for coverage with an annual deductible of $12,700.
Twelve thousand, seven hundred dollars! Is that what this Administration considers affordable?
And let’s not forget, people are required to purchase this unaffordable insurance, or face a fine from the IRS.
Clarissa Morris, 47, has been a server at the Golden Corral here for five years, earning $2.13 an hour plus tips. On a typical day, she leaves the restaurant with about $70 in tips. Her husband makes $9 an hour at Walmart but has been offered only a part-time schedule there, without benefits. Their combined paychecks barely cover their rent and daily essentials.
“It’s either buy insurance or put food in the house,” she said.
A study in 2014 found that 56 million Americans under age 65 will have trouble paying their health care bills. A whopping 10 million Americans between the ages of 19 and 64 “will be unable to pay for basic necessities like rent, food, and heat due to their medical bills.”
Furthermore, “In 2013 over 20% of American adults were struggling to pay their medical bills, and three in five bankruptcies in 2014 will be due to medical bills.”
For millions of Americans, the insurance plans they are now required to purchase under Obamacare could potentially bankrupt them – forcing them to choose insurance or food, insurance or rent, insurance or heat during a cold winter. And if they don’t choose insurance, a hefty fine awaits as well.
It’s long past time for Congress to start rolling back these senseless government mandates on health care. Real solutions that put families back in charge of their health care costs and help the uninsured are already being pioneered in the states, but first the federal government needs to get out of the way.
Update (Ed), 11/18 12:33 pm: At Kristina’s request, I edited the post slightly to remove a reference to deductibles increasing $5,000 per person, which was an error in cross-referencing some of the data.