Robbing Peter to Pay Paul

How deductible increases are making it difficult for average families to afford healthcare in a post­-ACA landscape

2016­deductible­increasesWe used to talk mostly about monthly premium increases when we considered the affordability of health insurance products. If you stayed relatively healthy, you could be pretty much assured that health insurance costs for you and your family would stay reasonable.

Not so anymore.

Consider out­of­pocket health insurance costs; specifically, deductibles and monthly premiums. Except in the case of so­called wellness benefits, both must be paid in full before the insured receives benefits from their insurance policy. Industry data suggests that while monthly premiums have gone up modestly from pre­ACA (Affordable Care Act, AKA “Obamacare”) typical deductible amounts have skyrocketed, leaving families to pay more than ever before for their healthcare.

This was definitely not the intention of the ACA.

How much have deductibles increased? The national average deductible for an ACA bronze plan (which on average covers 70% of healthcare costs) in 2016 is up 11% over 2015 to $11,601. That means that a family with a bronze plan will pay $11,601 AND the sum total of their monthly health insurance premiums before receiving one dime in benefits from the insurance company. With premiums averaging around $7000 ­ $10,000 per year for a family of four, it’s easy to see how that family could spend over $20,000 before getting anything back.

As long as insurers look for ways to limit the costs associated with ACA mandates, such as guaranteed­issue policies and full coverage for certain wellness benefits, you can count on deductibles to increase every year. So while premiums may seem relatively static, the dramatic increases in deductible amounts are keeping healthcare out of reach for many Americans.

As I work with my clients to help them find good coverage that they can afford, I’m also seeing many families struggle to pay their yearly deductibles. What do you think? Have you noticed your deductibles creeping up?

  Date posted: Thursday, January 28th, 2016
Category: Health Care Reform, Health Insurance

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