Potter: ObamaCare's crucial benefits
High-deductible insurance squeezing consumers, but new health care law will cap out-of-pocket spending
Politicians who are promising to repeal ObamaCare won’t find any evidence in the Kaiser Family Foundation’s analysis of health insurance costs that the law has caused premiums to skyrocket, as many of those politicians have contended.
On the contrary, premiums have increased on average only 4 percent over the past year, the lowest rate of increase in years, according to Kaiser’s 2012 Employer Health Benefits Survey, which was released last week. Double-digit premium increases were once the norm, especially during the George W. Bush administration. Premiums increased 10 percent in 2004 and 13 percent in 2003.
So the good news is that premiums increased only 4 percent. The not so good news is that, because of all those past double-digit increases, the average premium for employer-sponsored health coverage has reached a record high of $15,745. And because employers have been shifting more and more of the cost of coverage to workers, employees are now paying, on average, nearly 30 percent of that total, much more than they used to. The hike in worker contributions has far outstripped the overall rise in premiums.
A study published last year in Health Affairs found that the gains in wages U.S. workers made over the past decade were more than wiped out by increases in the cost of health care and health insurance. Kaiser’s annual surveys document that: since 2002, premiums have increased 97 percent, which is three times as fast as wages (33 percent) and inflation (28 percent).
That’s not all the bad news, unfortunately. More Americans are now enrolled in high deductible plans, because that’s frequently all their employers are offering. Kaiser found that the percentage of workers enrolled in plans with an annual deductible of $1,000 or more has increased from 10 percent in 2006 to 34 percent in 2012. The growth has been even greater for employees of small firms.
It gets worse. Many workers are now longing for the good old days of having to pay “just” $1,000 in deductibles. Fourteen percent of workers are now in plans with deductibles of $2,000 or more, compared to 3 percent in 2006.
And those numbers are just for single coverage. Families are getting hit much harder. Workers enrolled in high deductible plans are now facing annual family deductibles of almost $4,000 on average. Many have much, much higher deductibles.
As troubling as those numbers are, it is all too easy when we look at them for our eyes to glaze over and to forget that we are talking about real people. But because of these trends, increasing numbers of us are finding it impossible to get the care we need, even if we have insurance.
A couple of days after the Kaiser study was released, Consumer Reports released a study of its own showing that over the past year, 45 percent of adults under the age of 65 skipped getting a prescription and 63 percent canceled a doctor’s appointment, even though they were sick, to save money. Many others decided not to get a doctor-ordered test or undergo a needed medical procedure.
An untold number of Americans undoubtedly did go forward with a procedure their doctors said was necessary to save their lives and, as a consequence, are now facing bankruptcy.
Like the mother of a friend of mine whose doctor discovered through expensive testing last year that she had a pancreatic tumor. Thinking she had adequate coverage through her employer, Federal Express, the woman agreed to surgery. Fortunately, it was successful. Her doctors say she is cancer free, at least for now. Unfortunately, she hadn’t paid much attention to how much the surgery would cost because of her switch a few years ago into a high-deductible plan.
A single mother who, according to her daughter, lives paycheck to paycheck, she was in shock as the medical bills started pouring in. When they reached $6,000, which she was obligated to pay, she decided she had no choice but to file for bankruptcy.
For political candidates who make hundreds of thousands of dollars a year, $6,000 is pocket change. For most Americans, however, suddenly owing that much money can mean financial ruin. If ObamaCare goes forward, beginning in 2014, the law will set a cap on out-of-pocket spending. That cap will still be too high to keep some of us out of bankruptcy court. If the law is repealed, however, many more of us undoubtedly will wind up there.