NEW YORK â€“ Americans seeking cheap insurance on the Obamacare health exchanges may be in for sticker shock if they get sick next year, as consumers trade lower premiums for out-of-pocket costs that can top $6,000 a person.
Expenses for some policies can reach $6,350 for a single person and $12,700 per family, the most allowed by the health-care law, according to a survey by HealthPocket Inc. of seven states, including California and Ohio. Thatâ€™s 26 percent higher than the average deductible in the seven states, and a scenario likely repeated across the country, said Kev Coleman, head of research and data at Sunnyvale, Calif.-based HealthPocket.
Private employers have been raising deductibles and co-pays for years to help control costs on health coverage for their workers. Now insurers are using the tactic to lower premiums on the government-run exchanges. While that has allowed President Barack Obama to tout the affordability of plans, it poses a choice: Do consumers gamble they wonâ€™t face a major medical bill, or boost monthly premiums just in case?
â€śIf you have to pay $5,000 upfrontâ€ť when illness hits, â€śyou might as well not have any insurance at all,â€ť said Larry Saphire, 82, of West Orange, N.J., who shopped for coverage for his wife and two children, ages 16 and 21. â€śThatâ€™s not insurance.â€ť
On Californiaâ€™s state-run exchange site, the standard low-premium â€śbronzeâ€ť plan carries a $5,000 deductible per person, a $60 co-pay to see a doctor and a 30 percent fee, known as coinsurance, on hospital care. In Rhode Island, Blue Cross Blue Shieldâ€™s bronze plan has a $5,800 deductible while Missouriâ€™s U.S.-run exchange offers plans by Anthem Blue Cross with the maximum-allowable $6,350 in out-of-pocket costs.
The higher deductibles are one way insurers are trying to compensate for added costs under the Patient Protection and Affordable Care Act of 2010.
The health law, known as Obamacare, forbids insurers from dropping coverage or raising rates based on a customerâ€™s illness, adding security that doesnâ€™t exist today for individual policyholders. It also requires insurers to cover â€śessential benefitsâ€ť sometimes not provided now, including prescription drugs, wellness visits and hospitalization.
Still, high deductibles have the potential to become the next political land mine for an administration already struggling with website outages, customer confusion over eligibility and the cancellation of existing policies after Obama pledged that people who like their coverage could keep it. The president yesterday tried to minimize the damage of cancellations by saying insurers would be given the option of extending those policies through next year.
Insurance plans purchased through the exchanges give people more choices and better coverage of essential services, said White House Press Secretary Jay Carney.
â€śEvery individual who might apply for or enroll in insurance on the individual market has available to him subsidies and also a vast array of choices,â€ť Carney said at a briefing last week. â€śThe basic level of insurance might have a higher deductible; a higher level of insurance might have a lower deductible, as is true today.â€ť
Ariel Climer, 28, of Los Angeles, said she was hoping to afford health insurance for the first time since she graduated from college. While sheâ€™s found coverage options on Californiaâ€™s state exchange that fit her budget of $60 to $90 a month, the high annual deductibles have given her pause.
Climer works part-time for the Los Angeles Unified School District, at a bicycle shop and as a freelance personal assistant. While she rarely goes to the doctor, she said she worries about how sheâ€™d afford her share of the bill if an accident landed her in the emergency room.
â€śIt is a balance between picking something that is going to be cheaper and something that wonâ€™t have a huge deductible or cost too much down the road,â€ť Climer said. Paying more to lower her deductible, â€śis just going to mean I have no money to save at the end of the month.â€ť