Americans seeking cheap insurance on the Obamacare health exchanges may be in for sticker shock if they get sick next year, as consumers trade lower premiums for out-of-pocket costs that can top $6,000 a person.
Expenses for some policies can reach $6,350 for a single person and $12,700 per family, the most allowed by the health- care law, according to a survey by HealthPocket Inc. of seven states, including California and Ohio. That’s 26 percent higher than the average deductible in the seven states, and a scenario likely repeated across the country, said Kev Coleman, head of research and data at Sunnyvale, California-based HealthPocket.
Private employers have been raising deductibles and co-pays for years to help control costs on health coverage for their workers. Now insurers are using the tactic to lower premiums on the government-run exchanges. While that has allowed President Barack Obama to tout the affordability of plans, it poses a choice: Do consumers gamble they won’t face a major medical bill, or boost monthly premiums just in case?
“If you have to pay $5,000 upfront” when illness hits, “you might as well not have any insurance at all,” said Larry Saphire, 82, of West Orange, New Jersey, who shopped for coverage for his wife and two children, ages 16 and 21. “That’s not insurance.”
On California’s state-run exchange site, the standard low- premium “bronze” plan carries a $5,000 deductible per person, a $60 co-pay to see a doctor and a 30 percent fee, known as coinsurance, on hospital care. In Rhode Island, Blue Cross Blue Shield’s bronze plan has a $5,800 deductible while Missouri’s U.S.-run exchange offers plans by Anthem Blue Cross with the maximum-allowable $6,350 in out-of-pocket costs.
Cost Compensation
The higher deductibles are one way insurers are trying to compensate for added costs under the Patient Protection and Affordable Care Act of 2010.
The health law, known as Obamacare, forbids insurers from dropping coverage or raising rates based on a customer’s illness, adding security that doesn’t exist today for individual policyholders. It also requires insurers to cover “essential benefits” sometimes not provided now, including prescription drugs, wellness visits and hospitalization.
Still, high deductibles have the potential to become the next political land mine for an administration already struggling with website outages, customer confusion over eligibility and the cancellation of existing policies after Obama pledged that people who like their coverage could keep it. The president yesterday tried to minimize the damage of cancellations by saying insurers would be given the option of extending those policies through next year.
Better Coverage
Insurance plans purchased through the exchanges give people more choices and better coverage of essential services, said White House Press Secretary Jay Carney.