Health Insurance Deductibles and Costs Kill People

Health Care Local 100
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            New Orleans      I’ve been beating the drum about the barriers to health insurance that deductibles and co-pays cause for lower wage workers and low-and-moderate income families in general for years, because the compromises involved in the passage of the Affordable Care Act didn’t cap them at all, yet allowed employers to claim compliance, barring families from the subsidies in the marketplace.  Some small progress has been made in allowing other family members to access the marketplace assistance by the Biden administration, but the root problems still persist.  Meanwhile deductibles, co-pays, rising costs and decreasing subsidies are not only pushing families away from insurance, they are literally killing people.

First the facts, so there’s no question about the reality when I’ve reported that the deductibles on some policies for Local 100 nursing home and community home workers are $4 to $6000.  Aaron Carroll of Indiana University writing in the New York Times reported plainly:

The average deductible on a silver-level plan on the A.C.A. exchanges rose to $4,500 in 2021. If people tried to buy plans with a lower premium, at a bronze level, the average deductible rose to more than $6,000. Granted, some cost-sharing reductions are available for those who make less than 250 percent of the federal poverty line, but even after accounting for those, the average deductible was more than $3,100for silver plans.

Please note that’s for approved plans within the ACA marketplace offerings, meaning that they are hardly better than some plans offered by companies, who are qualifying, yet trying to dissuade workers from being covered.  Carroll’s research indicates that private companies carry $1200 deductibles and small companies $2000, which lower waged workers would be lucky to find.  For many lower waged workers, such deductibles would be on their wish list.

Citing a study by the National Bureau of Economic Research “…a simple $10 increase in cost-sharing…led to a 23 percent decrease in drug consumption” and “…almost 33 percent increase in monthly mortality.”  Carroll doesn’t mince words about this relatively minor increase in co-pays saying, “In other words, making seniors pay $10 more per prescription led to people dying.”

Carroll is hanging his case on the “ridiculous” and irrational level of deductibles as the reason that 100 million Americans have medical debt over $5000, even though they are insured.  This problem multiples and is about to explode when it comes to people who are uninsured.  During the pandemic the subsidies for health insurance were increased by Biden and Congress, but this federal aid is about to expire.  This is part of what the drama is between West Virginia’s Senator Manchin and the rest of the Senate’s majority.  The end of subsidies would be catastrophic as the Wall Street Journal reports:

The result would be that a typical enrollee making $40,000 a year, or a bit more than three times the federal poverty level, would see a 55% increase in premiums for a “silver” plan, while someone making $60,000, or just below five times the poverty line, would experience a 36% increase, or around $1,800 more a year, according to the Kaiser Family Foundation.  The end of the subsidies, given through tax credits, also would have a pernicious effect on the healthcare system. More than three million people would simply drop their insurance plan because of rising costs, according to U.S. Department of Health and Human Services estimates.

Reading about life-and-death in the news isn’t just about the Ukraine war or starving refugees in Africa, it’s also about the direct consequences of public policy in the USA.  The fear of so-called “moral hazard” by political conservatives allowing the larding on of co-pays and deductibles by insurers is literally killing people.  That’s not moral hazard, but a moral catastrophe!