By Nathan Nascimento
What good is health-insurance coverage if you can't afford to use it?
That's not a rhetorical question. It's the reality facing thousands of people who are required to purchase health insurance on the Affordable Care Act's (ACA) exchanges. As if rising premiums - which increased by an average of 14.6 and 13.1 percent in Pennsylvania and New Jersey, respectively, in 2016 - weren't already hard enough, skyrocketing deductibles have rendered many plans "all but useless," according to a recent report in the New York Times.
And as a new analysis from my organization shows, it's only getting worse.
While premiums are what it costs to have insurance, deductibles are what it costs to use it. Especially for low- and middle-income families, these out-of-pocket costs are placing affordable health care further out of reach.
My organization recently completed a new analysis of deductibles across the country, including Pennsylvania and New Jersey. Relying on data from the Robert Wood Johnson Foundation and the federal agency overseeing the ACA, we calculated weighted average deductibles by enrollment across gold, silver, and bronze plans.
Here's the short version: It's not good.
All three categories increased by an average of $254, or 17 percent, in Pennsylvania this year. Silver plans - with 259,000 enrollees, the most popular in the state - now have deductibles averaging $2,632, while bronze plan deductibles average $6,118. New Jersey was hardly any better. All three plan categories increased by an average of $209, or 10 percent.
In other words, the 298,000 Pennsylvanians with bronze and silver plans will have to pay between $2,632 and $6,118 before their health-insurance coverage kicks in, while 163,000 New Jerseyans will have to pay hundreds of dollars more than last year.
That's not an option for many families. A December survey by Bankrate.com found only 37 percent of Americans have the savings to pay for an unexpected expense of even $1,000. Others said they'd add it to credit cards, borrow from family or friends, or slash spending from other areas of their budget.
What's more, insurance premiums are increasing at the same time. A similar analysis by my organization found premiums for individual exchange plans increased by an average of 14.6 and 13.1 percent in Pennsylvania and New Jersey, respectively, this year. So not only is it more expensive to purchase insurance, but it's also more expensive to use it.
And there's the real rub of health insurance under the ACA. Consumers have increasingly fewer options and control over how they spend their health-care dollars. Instead, they're forced to purchase insurance policies from government exchanges whose premiums they cannot afford and whose deductibles limit their use.
Higher premiums are not bad by themselves. Some may actually prefer high-deductible plans as a way to lower their premiums up front, or to assume more responsibility for their costs as they need it. But as we're seeing, the ACA is denying consumers those choices - and forcing them to pay higher costs all the way around.
While some may instinctively blame insurance companies for these rising costs - after all, they're the ones mailing the bills - they're losing money, too. UnitedHealth, one of the nation's largest insurers, announced losses of nearly $1 billion in 2015 and 2016 on the exchanges. The outlook is so bad that they and other insurers are even considering leaving the exchanges altogether next year, which may result in millions of canceled plans.
Rather, these higher costs are the result of a one-size-fits-all federal health-care law that treats all patients as if they were the same. First it was millions of cancelled plans. Then it was - and still is - higher premiums. Now it's sky-high deductibles making health insurance too expensive to use.
It's always something else with the ACA. Unfortunately for Pennsylvanians and New Jerseyans, it's higher costs, and fewer choices.