Study: Families with Obamacare still can't afford the deductibles

by Laura Edghill
Posted 3/23/15, 03:25 pm

A new study released by the Kaiser Family Foundation reveals many families lack the necessary funds to meet their health insurance deductibles under Obamacare. The study analyzed both mid-range ($1,200 for an individual or $2,400 for a family) and high-range deductibles ($2,400 and $5,000) and found in both cases a surprising number of households do not have enough liquid assets to cover their share of their health insurance coverage.

Poor households fared the worst, with less than one-third of families able to meet their mid-range deductibles and just one-fifth able to afford high-range deductibles. But middle class families managed only modestly better by comparison. Just under two-thirds of non-poor, non-elderly households have enough funds to meet mid-range deductibles, and a little more than half are prepared to pay high-range deductibles.

The study assumed 100 percent of resources such as bank accounts, CDs, and other non-retirement investments, would be directed towards the health insurance deductible. There is no provision in the report for the likelihood liquid assets might be needed for other pressing life concerns—a car repair, emergency home maintenance, or an unexpectedly high school expense.

Families also must make difficult choices about which health insurance plans have premiums they can afford, the study found. Even if those premiums are subsidized, as they are for more than 80 percent of current Obamacare enrollees, the study found no guarantee those enrollees can afford to actually pay for their care until they reach their deductible limit. Obamacare’s standard Silver Plan deductible is $2,756, which is, according to the study, out of reach for about half of non-poor, non-elderly households. 

“The problem that we have specific to the ACA or Obamacare … is by putting in place benefit mandates and other things that drive up the cost of the insurance, it actually induces insurers to increase patient cost-sharing as a way to keep premiums down,” said Ed Haislmaier, senior research fellow with The Heritage Foundation.

Haislmaier also noted some of the data from the most recent enrollment period indicate many people in the Obamacare exchanges are “buying up” due to the subsidies.

“It tells us that they could’ve bought the plan that was cheaper but would have had higher deductibles, but because they were getting a subsidy, they actually used that money to buy up and get a plan that was not as cheap but had lower cost sharing,” Haislmaier said. “People are not stupid.”

The outcome of the Supreme Court’s decision in King v. Burwell could affect Obamacare subsidies in the 34 states that opted for federally run health insurance exchanges. If the court rules the subsidies are illegal for federal exchanges, Haislmaier predicts many of the people who chose the higher premium plans because they had a subsidy will be forced to switch to a lower premium plan with a higher deductible.

Laura Edghill

Laura is a freelance writer, church communications director, and public school board member living in Clinton Township, Mich., with her engineer husband and three sons. She is a graduate of the WORLD Journalism Institute's mid-career course. Follow Laura on Twitter @LTEdghill.

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