Entering its third annual open enrollment period, Obamacare is the subject of cacophonous political acrimony, again, championed by its supporters and vilified by its opponents. Each side presents its own “metrics” of success or failure, echoing the great Irish conservative Edmund Burke that, “In ascending order of treachery come lies, damned lies and statistical lies.” How apt a quotation when the Obama administration is now urging people to sign up for The Affordable Care Act, lauding the low premiums now available on the law’s new marketplaces. The President himself has said most Americans can find an option that costs less than $75 a month. The Secretary of Health and Human Services reaffirmed this promise saying 8 out of 10 returning customers will be able to buy a plan with premiums less than $100 a month after tax credits. Given the statistic that the medically uninsured rate in the United States has fallen from 15.7% to 9.2% since the law was enacted, it seems Obamacare has lived up to its hype.
Except the true cost of health insurance comprises not just a front-end monthly premium, but a back-end combination of deductibles and copays paid by the patient whenever the insurance is utilized. In many states, more than half the plans offered through the federal online marketplace have a yearly deductible of $3,000 or more. Median deductibles are actually greater in Miami, FL ($5,000), Jackson, MS ($5,500), Chicago, IL ($3,400) and Phoenix, AZ ($4,000). Granted, these are the Federal markets, not Medicaid expanded, income-sensitive state plans where financially needy participants can get cost-sharing reductions. Still, the Kaiser Family Foundation avows that average employer-sponsored plans have annual deductibles of only $1,320 for individual coverage. These sky-high back end patient financial outlays are making many consumers feel just as vulnerable as they were before they had coverage. Paradoxically, people can afford to have insurance, but cannot afford to actually use it.
These high deductibles are not just the avaricious pricing of the insurers participating in the marketplace. The sustainability of Obamacare is predicated on mandatory universal coverage providing large pools of younger and healthier people with little medical need to offset the health resource utilization of the debilitated and elderly. The costs to the insurance industry are reflective of the health profile of the composite insurees. The initial pricing system was, by necessity, guess work. After two years of accumulating real data, the insurance companies could and should better formulate a business model reflective of the healthcare needs and costs of their customers. There is pressure to keep premiums down, but if that does not pay for care actually rendered, then the difference has to be made up at the point of service with copays and deductibles. Ergo, the patients have to bear more of the financial burden than the low premiums they were quoted. Given this scenario and the recently released data that health spending grew 5.3% in 2014, the largest jump since 2007, and that this accelerated growth far exceeded that of GDP, the true “affordability” of the Affordable Care Act is not a faite accomplie, but a work in progress.
By Norman Silverman, MD, with Ryan McKennon, DO and Ren Carlton