Healthcare: It’s the Deductibles, Stupid

While Obama/Romneycare is better than nothing at all, the reality is that, for too many, it still means that healthcare is unaffordable. An article at the Boston Federal Reserve makes a point I’ve made before–people in Massachusetts get hammered on the co-payments and deductibles (boldface mine):

Among Massachusetts bankruptcy filers in 2009, 53 percent cited illness or medical bills as a cause of their bankruptcy, a percentage that was statistically indistinguishable from the 59 percent figure we found before reform. Indeed, because the total number of bankruptcies had risen, the actual number of medical bankruptcies in the state increased from 7,504 in 2007 to 10,093 in 2009. Surveys by others indicate that the reform had little impact on access to care.

Why are so many Massachusetts residents still suffering medical bankruptcies despite health reform? Although health-care reform cut the number of uninsured in the state by more than half (to about 219,000), much of the new coverage is so limited that serious illness still leaves families with medical bills they cannot pay.

Consider that the cheapest coverage available through the state’s health insurance exchange to a single 56-year-old Bostonian who is not eligible for subsidies (in other words, one who has an income above 300 percent of poverty) costs $4,744 and comes with numerous restrictions on which doctors’ and hospitals’ bills it will pay. If the policyholder is sick, the policy doesn’t start paying bills until after the policyholder has taken care of the $2,000 deductible. The patient also is responsible for about 20 percent of the next $15,000 in medical expenses.

Not to mention co-payments on prescriptions and doctors visits. Anyone who makes around $65,000 per year before taxes can’t really afford to shell out around $10,000 for healthcare (if he could, he wouldn’t be on the cheapest plan in the exchange). People have to like this crap, and this, while better than what previously existed, is not exactly likeable.

Should have gone with single payer or at least, Medicare as an option.

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4 Responses to Healthcare: It’s the Deductibles, Stupid

  1. coloncancercommunity says:

    You even have to be careful with Medicare and their supplemental plans which are often for profit. My father was in a medicare HMO when he was diagnosed with cancer. He had been on it a while and had no complaints until he got the co-pay for his chemo. It was 10% for all OUT-PATIENT IV drugs. That was (to the best of my memory) about $690/week for six months. A lot of the Medicare HMO’s are a scam. They work fine, until you get sick. Its the way they cherry-pick the healthy, low cost seniors. When open enrollment came around, I switched him out to Medicare/AARP which was more expensive but had far superior coverage. That’s what everyone does, but that’s not before massive financial damage is inflicted in many cases.

  2. octoploid says:

    I’m curious what statistical approach concludes 53% is indistinguishable from 59% given a sample of 7k+…it seems like that ought to be plenty significant? (I actually agree with what you’re saying, don’t get me wrong).

  3. Hamer says:

    While single payer would be nice, I think a good model would be high dedcutible plans with medicare/tricare allowances for services. For example, for current tricare members, if providers charge a patient more than 115% of the allowed amount they are not eligible to receive funds from tricare/medicare/medicaid. They should expand this to all insurance plans. These three pay more than 50% of the medical costs in the country and will expand under OC. These allowances are much lower and reasonable than standard insurance, often 20-40% of a BC/BS allowance. Establish an easy method to determine if a provider is participating. It also greatly simplifies everything for participating providers since everyone pays the same allowance for services and has the same admin requirements. It also allows prices to be transparent and put some market forces in the market. It also allows for a private high cost coverage, if thats your choice.

    The main goal of high deductibles is to make patients market aware, but to also punish those on maintenance prescriptions. In the US, we have 100 million Rx for chronic diseases, most of these are for lifestyle conditions or other treatments exist (ADHD, Chlolesterol, depression, hypertension, insomnia, etc). We need to get rid of the idea that a pill is the solution to all of lifes problems.

  4. Pingback: A Reminder About the Healthcare Premium Decreases in NY: Look at the Deductibles and Copays | Mike the Mad Biologist

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