Obamacare Premiums Are Low, And The Deductibles Very High
December 9, 2013

Many people (like me) signed onto a marketplace plan, assuming the insane deductibles only applied to big-ticket surgeries. Imagine my surprise when I found out I couldn't even see a doctor until I'd paid $6000 out of pocket. Okay, so I decided to switch to an HMO, but then found out I couldn't see my doctors at the local teaching hospital without paying as much as $100 in co-pays -- as opposed to $30 for the incompetents at the other area hospital. (Remember "you can keep your doctor"?) It seems we still have a medical caste system.

You know the Republicans will never agree to additional funding to fix these things, so can we have single payer now?

WASHINGTON — For months, the Obama administration has heralded the low premiums of medical insurance policies on sale in the insurance exchanges created by the new health law. But as consumers dig into the details, they are finding that the deductibles and other out-of-pocket costs are often much higher than what is typical in employer-sponsored health plans.

Until now, it was almost impossible for people using the federal health care website to see the deductible amounts, which consumers pay before coverage kicks in. But federal officials finally relented last week and added a “window shopping” feature that displays data on deductibles.

For policies offered in the federal exchange, as in many states, the annual deductible often tops $5,000 for an individual and $10,000 for a couple.

Insurers devised the new policies on the assumption that consumers would pick a plan based mainly on price, as reflected in the premium. But insurance plans with lower premiums generally have higher deductibles.

In El Paso, Tex., for example, for a husband and wife both age 35, one of the cheapest plans on the federal exchange, offered by Blue Cross and Blue Shield, has a premium less than $300 a month, but the annual deductible is more than $12,000. For a 45-year-old couple seeking insurance on the federal exchange in Saginaw, Mich., a policy with a premium of $515 a month has a deductible of $10,000.

In Santa Cruz, Calif., where the exchange is run by the state, Robert Aaron, a self-employed 56-year-old engineer, said he was looking for a low-cost plan. The best one he could find had a premium of $488 a month. But the annual deductible was $5,000, and that, he said, “sounds really high.”

By contrast, according to the Kaiser Family Foundation, the average deductible in employer-sponsored health plans is $1,135.

“Deductibles for many plans in the insurance exchanges are pretty high,” said Stan Dorn, a health policy expert at the Urban Institute. “These plans are more generous than what’s prevalent in the current individual insurance market, but significantly less generous than most employer-sponsored insurance.”

Caroline F. Pearson, a vice president of Avalere Health, a consulting company that has analyzed hundreds of plans, said: “The premiums are lower than expected, but consumers on the exchange will often face high deductibles and high co-payments for medical services and prescription drugs before they reach the cap on out-of-pocket costs,” $6,350 for an individual and $12,700 for a family.

Those limits provide significant protection, even though those sums are substantial for most consumers. In addition, the federal website, HealthCare.gov, informs people that they may qualify for subsidies to reduce their out-of-pocket costs if their household income is below 250 percent of the federal poverty level, meaning that it is less than $28,725 for an individual or $48,825 for a family of three.

These “cost-sharing reductions” are available for a specific kind of midlevel plan known as a silver plan. People with lower incomes can get more help with out-of-pocket costs, but only if they choose silver plans.

Mr. Dorn said the government had not done much to inform people of these potential savings. “Consumers are giving up cost-sharing reductions of enormous value if they enroll in a bronze plan because it has the lowest premium,” he said.

Plans in the marketplace are separated into four categories — bronze, silver, gold and platinum — indicating the generosity of coverage, or the share of costs paid by insurance for an average enrollee.

Many people buying insurance on the federal and state exchanges are expected to qualify for subsidies. But in the first month, for reasons that are not clear, only 30 percent qualified. The others must pay the full premium and will be subject to the full deductible.

Most people shopping in the exchanges are expected to choose bronze or silver plans, which provide less generous coverage than most employer-sponsored plans.

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