Deductible shock is here. The WSJ reports that many Americans will experience serious deductible increases as the Affordable Care Act plans go into effect:
The average individual deductible for what is called a bronze plan on the exchange—the lowest-priced coverage—is $5,081 a year, according to a new report on insurance offerings in 34 of the 36 states that rely on the federally run online marketplace.That is 42% higher than the average deductible of $3,589 for an individually purchased plan in 2013 before much of the federal law took effect, according to HealthPocket Inc., a company that compares health-insurance plans for consumers. A deductible is the annual amount people must spend on health care before their insurer starts making payments.
Higher deductibles can, in certain contexts, be useful for introducing some price sensitivity into the system. But that depends on how people go about dealing with them. There are two deep-rooted problems with what remains in many ways an excellent health care system overall: it is too expensive, and not enough people have enough access to it. The cheaper health care becomes, the easier it is to expand access. In a cheaper system, fewer people need subsidies and the subsidies they do need are smaller. Without fixing costs, on the other hand, more and more people, not to mention the government, struggle to pay for our system, and the resources for expanding access shrink as the cost of do so grows.
Unfortunately, the Affordable Care Act puts most of its effort on the wrong end of the problem: access rather than price. That’s one reason the rollout has been going so poorly and in some respects will get worse. Because not much effort was put into cost control, many insurers have taken the one easy step available to them to limit rate shock: restricting provider networks. As a result, people are unexpectedly losing access to doctors they have seen for years.A reform that put cost first, on the other hand, would recognize that high deductible plans need to be paired with other cost-saving measures, like wider use of nurse practitioners and better policy for retail chains operating as McDoc shops. Many lower-income people would be better able to afford care in that kind of system, and those who couldn’t would be subsidized at a lower cost to the rest of us. And, finally, more of the cost of routine care could be shifted onto the consumer while sparing him the burden of large, unanticipated medical bills.