Remember when the proponents of the Affordable Care Act promised that ObamaCare would save most Americans $2,500 in premium costs a year? And perhaps you remember when Barack Obama claimed “If you like your plan, you can keep your plan” so often that it became a mantra, too. Oregon television station KATU discovers that both of those promises turn out to be empty, and the “Affordable” in the bill’s title a case of bitter irony (via Tim Carney on Twitter):
Is the Affordable Health Care Act making health care unaffordable for some people?
Some customers of Regence Blue Cross Blue Shield, one of Oregon’s largest insurance providers, say that’s exactly what’s happening. They say they are finding their health care plans are dramatically changing under the Affordable Care Act.
“Policy holders are seeing almost double their monthly premiums,” said a KATU viewer named Larry in an email. He said his wife’s premium will increase by $300 under the Affordable Care Act.
Cover Oregon spokesman Michael Cox says most insurance plans that focus on lower premiums and higher deductibles will be replaced by plans with lower deductibles and higher benefits.
Let’s get back to the direction deductibles actually take in a moment and address the idea that there is a balance in this. In the two examples shown by KATU, which we have seen repeatedly is the norm rather than the exception across the country, prices have jumped $300 a month for KATU’s viewers (and they have been pushed out of their preferred plans, too). That comes to $3,600 a year more for health insurance. Even if the plans now have lower annual deductibles, they would have to have decreased more than the $3,600 to make up for the difference. After all, premiums come out of your pocket first, and then the deductibles. Even if deductibles dropped to zero, that $3600 extra gets paid up front.
Unfortunately for KATU viewers and everyone else, deductibles aren’t going down, they’re going up. The Chicago Tribune reported on rising deductibles this week, and I explain why that matters in my column at The Week:
The Tribune‘s Peter Frost found that a typical user in the system — a 33-year-old single father in this case — would see his premiums “more than double” from the current average of $233 a month. But if the single dad wants his premiums to remain in range, he’ll need to sign up for an annual deductible of $12,700. The average deductible before ObamaCare for this consumer would have been $3,500.
Nor is that an isolated example, although it’s on the far end of the spectrum. In order to keep prices low, 21 of the 22 approved plans on the Illinois state exchange have deductibles of more than $4,000 for individuals, and $8,000 for families. Frost notes that the average employer-based coverage puts the individual deductible at $1,100.
Consider what this means to the consumer. First, the government forces Americans to buy comprehensive insurance when many don’t need it. At $466 a month, the single father in the example above will spend about $5,600 a year on comprehensive insurance, which would far outstrip the medical expenses for most 33-year-old single men, who might expect only a wellness check and perhaps a couple of acute visits to a clinic for urgent care a year. At retail costs, even with labs, that’s going to run less than a thousand dollars a year at most.
Now, though, his insurance won’t even cover that much. Before Illinois consumers see any benefit at all from their insurance policies, they will have to spend more than $4,000 each year out of their own pocket — and without the benefit of health-savings accounts (HSAs) to use untaxed income for that purpose. That means that some consumers will spend much more each year over and above their newly inflated premiums, making it less and less likely that they will ever see any benefits from their mandated insurance policies other than avoiding the small fine from the IRS for noncompliance.
Affordable? Yeah, right indeed.
Update: The schadenfreude has run deep on the Right over this Daily Kos entry from September:
My wife and I just got our updates from Kaiser telling us what our 2014 rates will be. Her monthly has been $168 this year, mine $150. We have a high deductible. We are generally healthy people who don’t go to the doctor often. I barely ever go. The insurance is in case of a major catastrophe.
Well, now, because of Obamacare, my wife’s rate is gong to $302 per month and mine is jumping to $284.
I am canceling insurance for us and I am not paying any f***ing penalty. What the hell kind of reform is this?
Oh, ok, if we qualify, we can get some government assistance. Great. So now I have to jump through another hoop to just chisel some of this off. And we don’t qualify, anyway, so what’s the point?
We’ve been making these points for years. Too bad the DKos diarist here didn’t pay attention.