Health insurance premiums

During last night’s Democratic presidential candidates’ debate, moderator Martha Raddatz of ABC News prefaced a question with this:

“Secretary Clinton, the Department of Health and Human Services says more than 17 million Americans who are not insured now have health coverage because of Obamacare. But for Americans who already had health insurance the cost has gone up 27 percent in the last five years while deductibles are up 67 percent, health care costs are rising faster than many Americans can manage.”

The obvious question is how those increases compare with previous years. Raddatz didn’t name her source for her numbers, but a report from the Kaiser Family Foundation (link to PDF; see Exhibit 1.11 on page 31) shows a very similar 26 percent increase in average family health insurance premiums over the five year period 2009-2014. According to the same source, for the preceding five years the increase was 34 percent, and for the five years before that it was 53 percent. It’s hard to blame rising premiums on the Affordable Care Act when premiums rose faster before.

Furthermore, under the Affordable Care,

  • health insurance policies now have minimum coverage requirements,
  • people can’t be charged extra or turned down for coverage because of a pre-existing condition,
  • insurance companies can’t casually rescind coverage when someone gets expensively sick, and
  • for the first time there’s a cap on total out-of-pocket expenditures in a given year.

On top of that, about 80 percent of people who buy their own coverage qualify for a subsidy that enables them to pay less than 10 percent of their income on premiums, often a lot less. The very poor can get free coverage through Medicaid (except in states that for political reasons rejected Medicaid expansion).

I don’t mean to paint too rosy a picture here. The rise in deductibles Raddatz mentioned is a significant source of concern, though conservatives have long advocated higher deductibles as a way of inducing people to shop around and negotiate for cheaper care (not something many of us are inclined to do when we’re sick, especially when doctors and hospitals don’t like to reveal their costs up front).

And even though premiums are rising more slowly than they used to, the rate of increase still isn’t sustainable. Something needs to be done, and it’s fair to ask what.

What isn’t fair, though, is to imply that the Affordable Care Act is making healthcare less affordable when it pretty clearly is not.

For more on healthcare costs see this page on the Kaiser Family Foundation website. There’s more on the Affordable Care Act in these posts from my blog:

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Health insurance premiums — 1 Comment

  1. Pingback: The latest on Obamacare | D Gary Grady

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