Bankrupt Health Care
Deductibles Rising, Rising, Rising

Even as the White House continues to focus on the raw number of insured Americans in the lead-up to the next ACA sign-up period, the evidence continues to mount that the fundamental dynamics of U.S. health care are still hitting Americans where it hurts: the pocketbook. A new study show that costs are rising across the system, not especially dramatically, but consistently, making care more unaffordable year by year. The New York Times reports on new research by the Kaiser Family Foundation that finds deductibles rising faster than wages:

Kaiser, a health policy research group that conducts a yearly survey of employer health benefits, calculates that deductibles have risen more than six times faster than workers’ earnings since 2010 […]

Four of five workers who receive their insurance through an employer now pay a deductible, in which they must pay some of their medical bills before their coverage starts, according to Kaiser.

Those workers’ deductibles have climbed from a yearly average of $900 in 2010 for an individual plan to above $1,300 this year, while employees working for small businesses have an even higher average of $1,800 a year. One in five workers has a deductible of $2,000 or more.

The rise in deductibles is accompanied by what experts say is a relatively modest increase in premium costs across the country (though an increase, nonetheless). But as the chief executive of Kaiser notes, low premium growth doesn’t mean individuals are seeing relief. “This slowdown is invisible to average people. They’re paying more and more,” he said.

High deductible plans are, of course, a favored policy solution of those who believe higher out-of-pocket costs will incentivize Americans to spend less on health care. And giving health care consumers more reasons to exercise spending restraint is a good idea, as long as it is also accompanied by price transparency (which our system is still poor at, even as deductibles rise).

But health care reform needs to do more than subsidize spending (the ACA approach) or restrain spending (the high deductible approach); it needs to focus on making individual procedures cost less. The cheaper the underlying services are, the better off the whole system will be, with eventual knock-on effects on premiums and deductibles—and that can’t just be fixed by controlling spending from the consumer side. Only by reforming the way health care services are delivered—experimenting with things like telehealth, remote monitoring, and new providers and care settings, like nurse practitioners and clinics, respectively—can we ultimately make our way to a sustainable health care system.

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