We moved between states last summer and purchased a new health insurance policy (as required by law since insurance is only sold within states). Our new policy took effect in August and was intended to be an ObamaCare compliant policy.
In October we received a letter saying our policy premium would go up by 10% on January 1st. What we did not understand, until November 29th when we received a package of information, was that the new policy would not only cost more, but the benefits would be fewer. Our deductible, co-pays and prescription costs (which have no benefits until you exceed your deductible) would all go up. In other words, higher costs and fewer benefits. On December 7th, we received an additional letter with numerous corrections to the Nov 29th mailing, which did not make the situation any better.
The Problem: Deductibles are so high that subsidized insurance buyers will be unable to access health care
I spent my weekend shopping for new insurance. In my state essentially 100% of all Bronze plans and essentially all of the Silver plans have extremely high deductibles. In fact, the average Bronze plan has a $4,500 per person deductible. Oregon has some of the least cost insurance policies in the nation; in other states, these costs can be much higher and deductibles much, much larger.
That means the insured receives almost no direct benefits until your out of pocket spending exceeds $4,500 per person. I realized that for a poor person who is obtaining subsidized insurance, this makes access to health care itself unaffordable.
To understand that, consider a married couple, no kids, just over 50 years old and earning perhaps $40,000 per year. A bottom tiered subsidized plan in my state will cost them about $3500 per year but they receive almost no benefits (including prescription coverage) until they spend an additional $4,500 per year per person (or $9,000 for the family).
Not until you purchase a “Gold” plan do you see tolerable deductible limits (average here is about $1,300 per person). But a Gold plan for this hypothetical couple has an average monthly price, after subsidies, of $600/month. That’s $7,200 per year, to which you can add the $1,300/per person deductible. You can decide if this is affordable, or just a regressive price for health care for poorer people. And remember - most states cost more than Oregon.
The problem is that Obama confused access to health insurance with access to health care. He created a system that provides subsidies for some providing a lower out of pocket cost for insurance. But insurance is not the same thing as health care.
Worse, until last week, the HealthCare.gov web site failed to provide the deductible limits when people were browsing for policies. A great many people who have purchased subsidized insurance will be stunned when they go to the doctor next year and then receive very large medical bills they were not expecting.
This is the next train wreck.
While I discovered this on my own (in fact, I hypothesized in 2009 that this was going to happen and now we have data to confirm that - why did this take the NY Times 3 years?), the NY Times, CBS News and the Wall Street Journal have discovered this problem today. The NY Times article is linked below - it is an an excellent report - please read the whole article and you will then appreciate the problem.
The problem is so severe that it could be potentially fatal to the ObamaCare program itself when the very people it was intended to help find out they are unable to access health care itself - but are now spending more money.
NY Times: On Health Exchanges, Premiums May Be Low, but Other Costs Can Be High
When the issue of unexpected policy cancellations was first brought up, the official White House talking points were to say “But realize you are replacing a non-standard" (some referred to this as "junk”) “policy with an affordable, quality insurance plan”.
That was rude and insulting for them to say that, and also a flat out lie.