A Reminder About the Healthcare Premium Decreases in NY: Look at the Deductibles and Copays

So the good news coming out of New York is that Obamacare has lowered premiums by around fifty percent. As I’ve argued before, Obamacare is typically better than what it’s replacing, but that doesn’t mean it’s good enough. In Massachusetts, we’ve been getting hammered on the copayments and deductibles:

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.

I would love to be wrong, but I have a feeling many of the insurance companies in New York will simply make up the money in copayment and deductible increases. For those who aren’t fortunate enough to have high-end plans, here’s what the reality will be (boldface mine):

Probably the best way to digest the information is to focus on the bronze and silver plans. Bronze plans cover 60 percent of the typical person’s medical expenses. They are roughly equivalent to the high-deductible policies that, today, come with “health savings accounts.” Silver policies are more generous, since they cover 70 percent of expenses, but they are still less generous than typical employer policies. Most experts expect that people buying non-group coverage through Obamacare will choose bronze or silver policies, because people will tend to shop primarily on price. Just looking over the numbers, it appears that single adults shopping for coverage will find plenty of bronze and silver plans available for less than $400 a month, including a few in high-priced New York City.

It’s not just that they’ll shop on price, they have no idea what kind of medical attention they’ll need, and thus no clue as what kind of deductibles and copayments they might face.

Hopefully, I’m wrong but I find it hard to believe that insurers will leave money on the table.

Should have gone with single payer or at least let people buy into Medicare and CHIP.

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2 Responses to A Reminder About the Healthcare Premium Decreases in NY: Look at the Deductibles and Copays

  1. albanaeon says:

    Yep, should have done Medicare for all. Simpler, cheaper,and it’d actually work.

    And therefore, it was completely impossible to get…

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