Higher Deductibles Under Obamacare May Make People Forgo Preventive Care

September 22nd, 2015

The New York Times reports that since 2010, a “very powerful trend” in the cost of deductibles:

Four of five workers who receive their insurance through an employer now pay a deductible, in which they must pay some of their medical bills before their coverage starts, according to Kaiser.

Those workers have seen their deductibles climb from a yearly average of $900 in 2010 for an individual plan to more than $1,300 this year, while employees working for small businesses have an even higher average of $1,800 a year. One in five workers has a deductible of $2,000 or more.

You need to read down till paragraph eight before there is a mention of the Affordable Care Act, though it is not named, referred to only as “the federal health care law.” (The moniker “affordable” would be particularly inapt here).

While the Kaiser survey examines plans provided by employers, Mr. Altman said many of the insurance policies being sold under the federal health care law through the state exchanges also rely on high deductibles to keep premiums low. Some employers also increased the size of their deductibles to reduce the higher costs associated with the law.

The law may be prompting even more changes by companies, in order to have workers shoulder more of their medical costs.

It is not surprising that when you decrease how much an insurer can charge for premiums, they will recoup the cost with higher deductibles. Indeed, the article references the rapidly-approaching Cadillac Tax. Employers will soon drop benefits, and make deductibles higher to avoid the tax:

The prospect of the so-called Cadillac tax, a new tax created under the law on high-price health plans, is causing more companies to consider changes like increasing the size of their employees’ deductibles. The tax, which is expected to go into effect in 2018 but faces widespread opposition, could change the steady increase in deductibles into a “spurt,” Mr. Altman said.

There is a cost, of course, to all of this–people will “forgo care” if the deductible is too high:

But asking employees to cover more of their medical bills through high deductibles raises questions about whether some workers, especially those with expensive, chronic conditions, are being discouraged from seeking the care they need. …

What concerns policy experts and employers is evidence that higher deductibles are making people forgo care, even when they have serious conditions. …

Forty percent of people with private health insurance whose deductible equaled 5 percent or more of their income said they had decided not to go to the doctor when they were sick or had chosen not to get a test or go to a specialist, according to the survey.

As I noted earlier today, regardless of who sits in the White House in 2017, the Affordable Care Act will remain a lingering and pressing issue.