Tag Archives: health insurance

Health Insurance Mandate Clears California Legislature

The California Legislature voted Monday to tax people who refuse to buy health insurance, bringing back a key part of former President Barack Obama’s health care law in the country’s most populous state after it was eliminated by Republicans in Congress.

The annual penalty will be THE GREATER OF:

  • $695 for each adult and $347.50 for each child, up to $2,085 per family.
  • 2.5 percent of the tax filer’s annual household income minus the federal tax filing threshold.

The tax now heads to Democratic Gov. Gavin Newsom, who proposed a similar plan in January — an indication he will likely approve it.

The federal Affordable Care Act required everyone to buy health insurance or pay a penalty. The U.S. Supreme Court upheld the law, ruling the penalty was a tax.

In 2017, Republicans in Congress eliminated the penalty — beginning this year — as part of an overhaul of the federal tax code.

The bill passed by Democrats in California would reinstate the tax, effective Jan. 1. No Republicans voted for it. One Democrat in the state Assembly — Rudy Salas Jr. — voted against it.

The penalty won’t apply to everyone, including people living in the country illegally. Lawmakers on Monday also approved a bill that would expand government-funded health insurance to low-income young adults living in the U.S. illegally.

People in prison and those who are members of an American Indian tribe are also exempt, mirroring what had been in the federal law.

Democrats say the plan is part of their efforts to make sure everyone in California has health insurance.

If the bill becomes law, California would join Massachusetts, New Jersey, Vermont and Washington, D.C., next year as the only governments in the U.S. to penalize people who don’t buy health insurance.

It would also make California the only state to use money it gets from the penalty to help people who earn as much as six times the federal poverty limit pay their monthly health insurance premiums.

That means a family of four earning up to $150,000 a year would be eligible.

“These new subsidies will impact almost 1 million Californians and help them get the health care access that they deserve,” said Democratic Assemblyman Phil Ting of San Francisco.

Republican state Sen. John Moorlach said in 2014 that 82% of Californians who paid the penalty for not having health insurance had taxable incomes of $50,000 or less.

“This trailer bill will take money away from people making $30,000 to $50,000 a year and give it to people making between $75,000 and $130,000 a year,” GOP Assemblyman Jay Obernolte said. “That makes no sense.”

The state has already extended government health benefits to children living in the country illegally. The plan approved Monday would extend that coverage to people as old as 25.

While the proposal easily passed the Legislature, it brought a rebuke from Democratic Sen. Maria Elena Durazo from Los Angeles. She criticized the bill for not providing health care coverage to people 65 and older living in the country illegally.

“We’ve missed an opportunity to create fairness and inclusion,” she said.

Source: by Adam Beam | ABC News

California Passes Ban on Any Short-Term Health Insurance That Cost Less Than Obamacare

The Democrat-controlled California legislature urged Gov. Jerry Brown on Tuesday to sign a ban on bargain-priced short-term health insurance plans sponsored by the Trump administration for being cheaper than Obamacare.

The legislature passed SB 910 on August 21 to prevent what the bill’s author, Sen. Edward Hernandez (D-Montebello), referred to in a tweet as “junk” healthcare. Hernandez urged Gov. Brown to sign the bill to prevent going back to a time when insured patients could be denied care and be forced into financial ruin.

The Trump administration rescinded a rule in late July issued during the Obama years that extended short-duration health insurance policies from three months to 364 days. Trump also allowed insurers the right to offer short-term health plans that are automatically renewable up to 3 years.

Obama restricted the term of short-term insurance, and required every adult to buy coverage, to force healthy young consumers to buy expensive Obamacare comprehensive policies to subsidize the cost of insurance for older and sicker consumers with pre-existing health conditions.

U.S. Department of Health and Human Services issued the new rule to offer an affordable option for limited coverage due to skyrocketing prices for Obamacare.

The Heritage Foundation’s Doug Badger said in a research paper that limited duration health plans “offer broader choices of providers and lower premiums for people in good health than Obamacare policies.” He added that that the short-term policies were “offering a lifeboat enabling them to escape Obamacare’s sinking ship.”

Covered California, the Golden State’s Obamacare exchange, announced in July that the cost of health coverage for 2019 would rise by 8.7 percent. Although that is over 4 times the 2 percent U.S. inflation rate in 2017, the spike in health insurance premiums for the state-run marketplace was 12.5 percent in 2017.

The 2018 healthcare monthly premium for a single consumer purchasing a mid-level Silver policy on Covered California’s exchange was about $400 in Southern California and $500 in Northern California. That compares to the advertised price for a short-term policy of $91 per month.

Currently there are only about 10,000 Californians that are enrolled in 90-day short-term healthcare plans, according to the San Francisco Chronicle. But with the Trump administration ending the “individual mandate” penalty for failing to buy health insurance equivalent to Obamacare, the number enrolling in short-term policies may spike higher.

California has the authority to regulate healthcare within its borders, but as the Sacramento Bee reported, it would be the first state to pass legislation specifically banning short-term healthcare policies.

Source: by Chriss W. Street | Breitbart

Thirteen of 23 Co-Ops Created Under Obamacare Have Now Failed

Ohio’s InHealth Mutual co-op announced last week that it is going out of business, making it the 13th co-op to fail out of the 23 that were created under Obamacare.

The Ohio Department of Insurance asked to liquidate the company, saying that the company was in a “hazardous financial condition.” The co-op served nearly 22,000 consumers who now have 60 days to find another policy offered by another company on the federal exchange.

“Our examination of the company’s financials made it clear that the company’s losses would prevent it from paying future claims should its operations continue,” said Ohio Director of Insurance Lt. Gov. Mary Taylor. “Under Ohio law, we acted with certainty to protect the consumers.”

The company recorded an underwriting loss of $80 million in 2015 despite the $129 million in taxpayer-backed loans granted to the co-op by the federal government. InHealth Mutual was also placed under “enhanced oversight,” one of three tools the Department of Health and Human Services has to monitor co-ops in financial distress. When a co-op is placed under enhanced oversight, it means the company is consistently under performing and allows the department to give detailed and more frequent reviews of the loan recipient’s operations and financial status.

According to Columbus Business First, medical claims were coming in at a rate of $3 million per week and the company would have had to raise premiums by 60 percent in 2017 to keep up. If InHealth Mutual were to stay in business through the end of 2016, projections show that the company would have posted losses of $20 million.

Ohio’s failed co-op is added to the list of 12 co-ops that have already failed in Arizona, Michigan, Utah, Kentucky, New York, Nevada, Louisiana, Oregon, Colorado, Tennessee, South Carolina, and a co-op that served both Iowa and Nebraska.

Centers for Medicare and Medicaid Services chief operating officer Mandy Cohen told lawmakers in February that eight of the 11 remaining Obamacare co-ops in operation were selected for “corrective action plans” and “enhanced oversight.” She did not disclose which co-ops were placed on these plans.

A professor who specializes in economics and health insurance told lawmakers in March that closures of the remaining co-ops seem likely.

“The future of the 11 co-ops still providing coverage in 2016 is uncertain, but future closures seem likely,” said Dr. Scott Harrington. “The 10 co-ops still operating with June 30 financials reported a cumulative loss of $202.3 million.”

“Very little, if any, of the $1.24 billion in federal start-up and solvency loans to establish those co-ops will be repaid, and at least several will be unable to meet all of their obligations to policyholders and health care providers,” he said.

The Department of Health and Human Services did not respond to requests for comment by press time.

by Ali Meyer | The Washington Free Beacon

Is This The Beginning Of The End For The Affordable Care Act?

Largest US Health Insurer Ditches ObamaCare

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Tracking the slow motion train wreck of Obamacare has become one of our preferred hobbies: below is just a random sample of headlines covering just the most recent tribulations of the “we have to pass it to find out what’s in it” Unaffordable Care Act:

But the most surprising article we wrote was our explanation from three weeks ago explaining why “Your Health Insurance Premiums Are About To Go Through The Roof” showing that even insurance companies have been unable to earn a profit under Obamacare, as shown in the following chart:

This was a stunning revelation because, after all, the Affordable Care Act was largely drafted by the insurance industry itself, and if for whatever reason, it itself was unable to capitalize on Obamacare, then it has truly been a disaster.

Today we got confirmation of this when none other than the U.S.’s biggest health insurer, UnitedHealth, cut its 2015 earnings forecast with a warning that it was considering pulling out of Obamacare, just one month after saying it would expand its presence in the program.

According to Bloomberg, “UnitedHealth Group would scale back marketing efforts for plans it’s selling this year under the Affordable Care Act, and may quit the business entirely in 2017 because it has proven to be more costly than expected.

This was precisely what we cautioned on November 2.

Fast forward to today when UnitedHealth said in a statement that “the company is evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.”

Needless to say, the implications for Obamacare – which has seen a surge in tangential problems in recent months – are dire: “A pull-back would deal a significant blow to President Barack Obama’s signature domestic policy achievement. While UnitedHealth has been slower than some of its rivals to sell Obamacare policies since new government-run marketplaces for the plans opened in late 2013, the announcement may indicate that other insurers are struggling, said Sheryl Skolnick, an analyst at Mizuho Securities.

“If one of the largest and presumably, by reputation and experience, the most sophisticated of the health plans out there can’t make money on the exchanges, then one has to question whether the exchange as an institution is a viable enterprise,” Skolnick said.

UnitedHealth further said it suspended marketing its individual exchange plans and is cutting or eliminating commissions for brokers who sell the coverage.

What is surprising is that for UnitedHealth, its Obamacare-facing exposure is relatively limited: the company covers fewer than 550,000 people on the Obamacare exchanges. About 9.9 million people had insurance through the U.S.- and state-run insurance markets as of June 30. This means that all other insurance companies must be getting crushed, something which the market also noticed earlier today hitting the stocks of not only hospitals, such as CYH, HCA, LPNT, THC and UHS but also home health care providers as well such as AFAM, AMED, GTIV and LHCG.

What is perhaps even more perplexing is the abrupt shift in posture: just last month, UnitedHealth had struck a more optimistic note. I think we’ll see strikingly better performance on the insurance exchange business” next year, Chief Financial Officer David Wichmann told analysts on an Oct. 15 conference call.”

Perhaps he had not seen the P&L? Oh well, he certainly did in the subsequently 4 weeks.

The rest of the story is well-known and has been covered here extensively in the past: the inability of businesses to turn a profit from Obamacare has meant that about a dozen non-profit “co-op” plans created under the Affordable Care Act have failed, after charging too little to cover the cost of patients’ medical care, and because an Obama administration fund designed to stabilize the market paid out just 12.6 percent of what insurers requested. And Anthem last month said some rivals were offering premiums too low to provide the coverage patients require and book a profit.

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At the end of the day, the worst news is not for the corporations, since Obamacare is not going away any time soon. It simply means that what until now were supposedly Affordable plans under Obamacare, will soon become (even more) Unaffordable as insurer after insurer hikes premiums dramatically in order to make the biggest US governmental intrusion into the private sector in recent decades profitable to shareholders.

Or, as we explained three weeks ago, “Your Health Insurance Premiums Are About To Go Through The Roof


UnitedHealth CEO Regrets Entering ObamaCare

The CEO of UnitedHealthcare on Tuesday said he regretted the decision to enter the ObamaCare marketplace last year, which the company says has resulted in millions of dollars in losses.

“It was for us a bad decision,” UnitedHealth CEO Stephen Hemsley said at an investors’ meeting in New York, according to Bloomberg Business.

UnitedHealth, the country’s largest insurer, announced last month that it would no longer advertise its ObamaCare plans over the next year and may pull out completely in 2016 — a move that sent shock waves across the healthcare industry.

Hemsley’s remarks double down on his earlier warning that the ObamaCare exchanges remain weaker than expected after two years and that it will take far longer for insurers to profit from the millions of new enrollees. 

The company had already eyed ObamaCare’s federal marketplace cautiously since it launched in 2013. UnitedHealth only began selling plans on the exchanges last year.

Now, UnitedHealth officials have said that move will result in a half-billion dollars in losses over two years.

Hemsley said it was smart to sit out of the exchanges for the first year, but that the company should have held out another year.

“In retrospect, we should have stayed out longer,” he said, adding that he believes the marketplace will take more than “a season or two” to develop.

“We did not believe it would form this slowly, be this porous, or become this severe,” he added.

by Sarah Ferris in The Hill


GRUBER: A lack of transparency was how we got this law through.

 

ObamaCare On The Rocks As Open Enrollment Looms

by Betsy McCaughey in IBD

ObamaCare is heading toward a death spiral. The administration is having trouble selling insurance plans to healthy people. That’s a big problem: When the young and healthy don’t enroll, premiums have to be hiked to cover the costs of older and sicker people, discouraging even more young people from signing up.

Last Thursday, the administration predicted enrollment for 2016 will be less than half what had been forecast in March by the Congressional Budget Office.

Even with subsidies to help with premiums and out-of-pocket costs, most of the uninsured who are eligible for ObamaCare are saying “no thanks.” Only one in seven is expected to sign up. That’s despite a hefty increase in the financial penalty next year for not having insurance.

The administration seems reconciled to failure. Already it has announced it won’t be running the customary nationwide TV campaign to encourage sign-ups, as in previous years.

Remember the young guy in plaid pajamas — “Pajama Boy” to conservatives? Well, he won’t be back this winter.

Bad enough that healthy people aren’t buying. Worse is that the administration is spending billions of your tax dollars covering up the problem, paying insurers to keep offering the plans, even though they’re losing their shirts. But facts are facts — and there’s no hiding these.

Health and Human Services Secretary Sylvia Burwell predicts Obama-Care enrollment will inch up by 1 million or so, to 10 million people — half what the CBO forecast. Open enrollment for the coming year, which begins Nov. 1, “is going to be a challenge,” she said.

David Wichmann, UnitedHealth Group’s president, announced higher premiums last week because enrollees will “require more medical services than original expectations.”

Many states are looking at premium hikes of 30% or more, according to a new Robert Wood Johnson/Urban Institute analysis. The Heritage Foundation estimates that insurers lost 12% selling ACA plans in 2014, with more losses this year.

Don’t shed any tears for the insurance companies. Though they’re losing money on exchange plans, they’re profitable overall, and their stocks are doing well. It’s John Q. Public who’s bearing the brunt. Just as ObamaCare intended.

If you get insurance at work, you’re paying an extra tax to fund “reinsurance” for ObamaCare plans. It’s a fund to defray the cost of their most expensive enrollees.

So far, insurers have collected $7.9 billion. Recent congressional testimony shows the payments kept ObamaCare sticker prices about 11% lower than they otherwise would have been. In short, you pay a tax to make Obama-Care look more affordable than it is.

But even with these hidden subsidies, ObamaCare isn’t working because the design is fatally flawed. The 5% of the population with serious medical conditions consume nearly 50% of the health care. When you try to sell insurance to sick and healthy people for the same price, the healthy don’t sign up. It’s too expensive.

New York State learned that in the 1990s, when one-price-for-all insurance laws pushed premiums to the highest in the nation, crushing the individual insurance market here.

ObamaCare repeats that mistake. Despite slapping the uninsured with penalties — which will jump to 2.5% of household income in 2016 — they’re not signing up. The need to coerce enrollment with penalties is proof the plans are a bad deal.

How long will big insurers play along? There are political considerations, and for most, ObamaCare losses are still just a dent in their overall business. Not so for the 23 co-op insurers set up under the health law. Eight state plans have already failed, including New York’s Health Republic, and most of the rest are bleeding money.

With ObamaCare enrollment floundering and losses mounting, the nation needs alternatives. The Republicans are coalescing around a reform plan, but Democrats are doubling down.

Hillary Rodham Clinton wants to burden the existing, unpopular plans with more “free” goodies and make it harder to dodge the mandate. That won’t work. A real reform should cover the seriously ill — people with pre-existing conditions — in separate plans with separate pricing and subsidies to make them affordable.

Just like the high-risk pools many states used to maintain. That’s the lesson of ObamaCare’s failure.

• McCaughey is author of “Beating ObamaCare” and a senior fellow at the London Center for Policy Research.

‘Playing on stupidity of the American voter is how we got it passed’

Health Care Costs Are Crippling American Middle Class Workers

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Whiskey Tango Texas Summary:

  • Obamacare is forcing American middle class workers to skip doctor visits, putting off procedures and forcing self rationing or avoidance of necessary prescription drugs.
  • American middle class are forced to pay so much out-of-pocket that it’s as good as not having insurance.
  • When middle class workers are financially forced to skip health care by their government, they’ll enter a downward spiral that imperils their physical and financial health over time.

Authored by Laura Ungar and Jayne O’Donnell for USA TODAY.

Physician Praveen Arla is witnessing a reversal of health care fortunes: Poor, long-uninsured patients are getting Medicaid through Obamacare and finally coming to his office for care. But middle-class workers are increasingly staying away.

“It’s flip-flopped,” says Arla, who helps his father run a family practice in Hillview, Ky. Patients with job-based plans, he says, will say: ” ‘My deductible is so high. I’m trying to come to the doctor as little as possible. … What is the minimum I can get done?’ They’re really worried about cost.”

It’s a deep and common concern across the USA, where employer plans cover 60% of working-age Americans, or about 150 million people. Coverage long considered the gold standard of health insurance now often requires workers to pay so much out-of-pocket that many feel they must skip doctor visits, put off medical procedures, avoid filling prescriptions and ration pills — much as the uninsured have done.

A recent Commonwealth Fund survey found that four in 10 working-age adults skipped some kind of care because of the cost, and other surveys have found much the same. The portion of workers with annual deductibles — what consumers must pay before insurance kicks in — rose from 55% eight years ago to 80% today, according to research by the Kaiser Family Foundation. And a Mercer study showed that 2014 saw the largest one-year increase in enrollment in “high-deductible plans” — from 18% to 23% of all covered employees.

Meanwhile the size of the average deductible more than doubled in eight years, from $584 to $1,217 for individual coverage. Add to this co-pays, co-insurance and the price of drugs or procedures not covered by plans — and it’s all too much for many Americans.

Holly Wilson of Denver, a communications company fraud investigator who has congestive heart failure and high blood pressure, recently went without her blood pressure pills for three months because she couldn’t afford them, given her $2,500 deductible. Her blood pressure shot so high, her doctor told her she risked a stroke.

LaRita Jacobs has severe arthritis and delayed a neckLaRita Jacobs has severe arthritis and delayed a neck surgery until it got so bad she couldn’t lift a fork. Now, she is delaying shoulder surgery that her doctor recommends and opting for less expensive physical therapy and enduring the pain. Here, she readies the needle for her weekly injection of Methotrexate, a type of chemotherapy regularly used for people with autoimmune diseases like rheumatoid arthritis.
(Photo: Melissa Lyttle for USA TODAY)

And LaRita Jacobs of Seminole, Fla., who gets insurance through her husband’s job and has an annual family income of $70,000, says $7,500 a year in out-of-pocket costs kept her from dealing with an arthritis-related neck problem until it got so bad she couldn’t lift a fork. She’s now putting off shoulder surgery.

“How did we get to this crazy life?” asks Jacobs, 54. “We’re struggling to pay our bills like we were struggling when we first got started.”

Why is this happening? Many patients and doctors blame corporate greed — a view insurers and business leaders reject. Some employers in turn blame the Affordable Care Act, saying it has forced them to pare down generous plans so they don’t have to pay a “Cadillac tax” on high-cost coverage in 2018. But health care researchers point to a convergence of trends building for years: the steep rise in deductibles even as premiums stabilize, corporate belt-tightening since the economic downturn and stagnant middle-class wages.

“It’s a case of companies trying to offer workers health insurance and still generate profit,” said Eric Wright, a professor of sociology and public health at Georgia State University. “But whenever costs go up for the consumers across the board … it promotes a delay in care.”

Others disagree, saying that when people pay for their care, they shop more intelligently. Chris Riedl, Aetna’s head of product strategy for its national accounts, says her company’s research does not indicate that insured patients are showing up sick in emergency rooms with long-neglected illnesses — which to her means, “intuitively, they’re not avoiding care.”

But many doctors contend it’s only a matter of time before the middle class begins crowding ERs. They say putting off care can be dangerous, exponentially more costly and, if it continues and spreads, can threaten the health of the nation.

Bullitt County, Ky., family practitioner  Mohana Arla,Bullitt County, Ky., family practitioner Mohana Arla, right, and intern Dominique Rhymes examine Lee Curry, 54. Curry was injured while working to pull a passenger from a wrecked vehicle as a Sheriff’s Department employee when his wrist was slammed in a truck door by a wind gust on Oct. 31, 2014. (Photo: Alton Strupp for USA TODAY)

 Monitoring The Trend

‘Can I stop taking this medication?’

Praveen’s father, Mohana Arla, says being forced to pay so much out-of-pocket “is as good as not having insurance” in an era of ever-rising health care costs. Inpatient care last year averaged $17,553, and insurance plans require people to pay a portion of that even after meeting their deductibles, up to an out-of-pocket maximum that can easily exceed $10,000 a year for families. Median household income in the U.S. is around $53,000, and the average American has less than $6,000 in savings, according to a 2012 report by Pitney-Bowes Software. A quarter have no emergency savings at all, Bankrate.com reported in June.

“Health expenses tend to come up unexpectedly, or if you have a chronic condition, they come up relentlessly,” adds Karen Pollitz, a senior fellow at Kaiser. “People put off care or they split their pills. They do without.”

Mounting evidence backs that up:

• Nearly 30% of privately insured, working-age Americans with deductibles of at least 5% of their income had a medical problem but didn’t go to the doctor, the Commonwealth Fund found. Around the same percentage skipped doctor-recommended medical tests, treatments or follow-ups.

• Nearly half of middle-class workers skipped health care services or fell into financial hardship because of health expenses, according to a survey by the Associated Press and NORC Center for Public Affairs Research.

• Use of hospital care among insured workers has been dropping since 2010, and use of outpatient care, such as doctor visits, dropped slightly for the first time from 2012 to 2013, according to insurance claim data analyzed by the Health Care Cost Institute.

• Medical professionals across the USA see the reality behind the research. The Arlas’ patient load used to be 45% commercially insured and 25% Medicaid; those percentages are now reversed. Stan Brock, founder of Remote Area Medical, which runs free clinics around the nation, says the group’s volunteer workers found that around 7% of patients who came to one of the clinics had job-provided insurance — and some waited for days just to keep a prime spot in line.

Patients often do a sort of medical and financial triage when they get sick. Jacobs, a former college professor, says every time a doctor suggests a new test, procedure or medication for her severe arthritis, she asks herself: ” ‘Is it critical?’ You’re always playing the odds. … And I’m constantly asking my doctor: Can I stop taking this medication?”

When her shoulder started hurting a couple of years ago, she had an X-ray but put off the recommended MRI for two years. It worsened, and she couldn’t move her arm without pain or lift her right hand above her head. She finally got that surgery in October but is now forgoing a shoulder procedure, opting for less expensive physical therapy and planning to “tough out the pain.”

“You don’t want another surgery … another bill,” she says. “It may be more of a problem later, but that’s the risk you take.”

While all out-of-pocket expenses play a role in such decisions, experts say the driving factor is the deductible, which averages $2,000 or more for single coverage for nearly one in five workers and from around $2,000 to $4,500 for families, depending on the type of plan. Companies may help fund health-savings accounts to pay some of these costs, sometimes with only a few hundred dollars.

“I can remember when $1,000 was considered a high-deductible plan. Now that’s become kind of the norm,” Pollitz says. “We’re kind of in high-deductible land.”

The cost shift extends to workers in government jobs, long known for bountiful benefit packages. Lee Curry, a sheriff’s deputy in Bullitt County, Ky., says his county health plan comes with a $1,500 deductible, which keeps him from going to the doctor at all.

“Health insurance doesn’t cover much of anything until you cover your deductible,” says Curry, 54. “It puts a burden on you. You’ve got to have the money to be seen.”

Is Obamacare To Blame?

 Stagnant salaries also skew budgets

Since the ACA took effect, “there’s been an accelerated movement” to these types of health plans, says Brian Marcotte, president and chief executive officer of the Washington, D.C.-based Business Group on Health.

Marcotte, whose group represents 400 large employers, says that the looming Cadillac tax is one factor but acknowledged that managing health care costs is another.

Companies have cited the ACA for cutting medical benefits in other ways. For example, United Parcel Service partly blamed the law when it removed thousands of spouses from its plan because they are eligible for medical coverage elsewhere.

But DeAnn Friedholm, director of health reform for Consumers Union, says she’s skeptical when employers point to the ACA. “This isn’t new,” she says. “Companies have been cutting back on benefits and cutting costs for decades.”

Sara Collins, vice president for Health Care Coverage and Access at the Commonwealth Fund, says two ACA requirements — keeping children under 26 on their parents’ plans and covering preventive care — didn’t add much to companies’ health care tabs, partly because most already covered preventive care such as physicals and mammograms. Pollitz says the ACA actually holds down the consumer burden by capping out-of-pocket expenses at $6,300 a person — which, although that amount is “more than most people have in the bank,” is better than no cap at all.

Experts point out that the ACA requires preventive care to be covered fully and exempt from deductibles — although surveys show many workers still forgo screenings and physicals because they’re unaware of this or know they can’t afford follow-ups if illnesses are found.

Several experts say the consumer crunch has less to do with the health system overhaul than stagnant salaries. The average hourly wage is nearly identical to what it was 50 years ago in today’s dollars: $19.18 in 1964 compared with $20.67 in 2014, according to U.S. Bureau of Labor data analyzed by the Pew Research Center. Meanwhile, U.S. health spending ballooned from 5% of gross domestic product in 1960 to 17% in 2013.

“People are very close to the line in terms of their budgets,” Collins says. “What consumers are really seeing is their incomes have grown even slower than the slower growth in health care costs” in the past few years.

Insurers also blame the cost of care, saying that can’t be absorbed just by premiums. But Wilson and other patients put much of the blame on insurers.

“Insurance is all about the dollar,” Wilson says. The never-ending cost shift to consumers “is something that basically all kinds of people screwed up. … Obamacare is a step in the right direction. But it’s not enough. I expected more out of it than I got.”

The Ugly Side Effects

A spiral of painful debt

When consumers skip care, they enter a downward spiral that imperils their physical and financial health.

Jennifer Ross, an arthritis sufferer in Florida insured through her husband’s job, says she recently made the wrenching decision not to take a medication that might allow her to get around without her wheelchair. The $2,400-a-month medicine would cost her $600 a month out-of-pocket even with insurance, and she simply can’t swing it. To make matters worse, Ross’ 12-year-old daughter was recently diagnosed with arthritis, too.

“It’s a no-win situation,” Ross says.

Surgeon Paul Ruggieri of Fall River, Mass., says his patients with high-deductible plans often blanch at the out-of-pocket cost to electively treat two common ailments he sees regularly — gallstones and hernias — until they become potentially dangerous and costly emergencies.

If the procedures are done electively, patients are required to pay half of the cost upfront; a hernia repair done laparoscopically would cost about $4,000 at a surgery center. That’s often about the amount of some patients’ deductibles, so they would have to pay the full bill out-of-pocket. If the procedure is done at a hospital, even laparoscopically, it can cost as much as $17,000. If patients delay and are rushed to the emergency room for the procedure, the hospital would charge at least two to three times the amount of the surgery, Ruggieri says. It would also mean a two- to three-day hospital stay vs. two hours for the elective procedure, and much longer at-home recuperation.

Paul Ruggieri, with medical assistant Monica DePonte,

Paul Ruggieri, with medical assistant Monica DePonte, is a surgeon who sees a lot of hernia and gall bladder patients who put off care until it becomes an emergency.
(Photo: Josh T. Reynolds for USA TODAY)

‘Skin In The Game’

The push for preventive care

“I’ve worked for 35 years. I never wanted to go on Medicaid,” says Brown, 50. “It’s horrible. I paid for insurance for all those years, and still ended up in this situation.”

But insurers, employers and others say that such stories are the exception and that high deductibles generally encourage consumers to seek the best value for their dollar.

“By having deductibles, it puts skin in the game,” says Divya Cantor, senior clinical director for the insurer Anthem in Kentucky.

Joel Diamond, a Pittsburgh primary care doctor, thinks high-deductible plans are a smart choice for people who can’t afford higher premiums and are generally in good health.

He cites the case of a young woman who couldn’t afford insurance on her own who stopped having periods and went to the emergency room with severe headaches. Diamond discussed doing testing for possible ovarian and endocrine problems. When blood work showed abnormal levels of the hormone prolactin, he recommended an MRI to rule out a pituitary tumor. Her bill for just a few hours in the emergency room was $15,000, something that will take her years to pay off.

If she had had a high-deductible plan, he says, it would have paid for a large chunk of the cost, and her debt could have been a third to half as much.

“We don’t have car insurance for windshield wipers and oil changes, but we need it for the catastrophic stuff, just like our health care,” says Diamond, who is also chief medical officer for the health care IT company dbMotion.

Aetna’s Reidl says her company allows people to compare prices easily on its website. Some tests, for example, could cost hundreds of dollars or less at some hospitals and thousands at others.

Aetna, the first national insurer to move to high-deductible plans — which it coined “consumer-directed plans” — more than a decade ago, says the plans help employees and employers save money.

Reidl says she has heard the criticism that they “may cause some individuals to put off care,” but counters that Aetna members with these plans get routine preventive care and screenings at higher rates than those with other plans. And their employers save an average of $208 per employee per year after they switch to high-deductible plans.

“We’ve seen that over 10 years consistently,” she says.

Aetna recommends companies pair the plans with health reimbursement or savings accounts — which allow employees to set aside tax-free money to use for cost sharing — to ease the burden of out-of-pocket costs on employees.

But Wendell Potter, who used to work in public relations in the insurance industry and has since written a book about the experience called Deadly Spin, says insurers who study high-deductible plans are “not disclosing everything they find.”

“They do these reports based on their populations to try to sell more of these plans to employers,” he says. Population-based reports don’t necessarily reflect the fact that “individuals and families are having to file for bankruptcy because they are in their plans.”

Potter left his public relations job at Cigna in 2008 in part because “I was expected to be a champion” of high-deductible plans. He says these plans are “taking us in the wrong direction … back to a system that we would have thought the ACA prevented.”

The Future

Will time heal all?

There are no signs high deductibles are going away.The Centers for Medicare and Medicaid Services last month cited these plans as one of the reasons health care spending hit a record low in 2013. But CMS statistician Micah Hartman says his office is “not looking forward to what the impact would be going forward” if consumers who delay care need far more expensive emergency care later.

Meanwhile, experts say Americans will need to take further steps to control their health costs.

Wilson, the Denver patient, says that after her doctor scolded her for stopping her blood pressure pills, she now takes them daily. But keeping up with her six medications is a constant struggle given her $33,000-a-year income, so she copes by asking for samples from the doctor, using a prescription discount plan and sometimes buying just a few pills at a time.

Doctors and doctor groups say such individual coping strategies can be helpful, but action is needed on a national level. The American Academy of Pediatrics recently came out with a policy statement saying high-deductible plans “may be a less desirable way to lower health care costs than other means … even if ‘other means’ require more work by government, insurance companies and other health policy participants.”

They say policymakers should consider requiring that the plans cover only adults, not children, as adults may suffer more from reduced care. The group also suggests exempting outpatient care from deductibles and requiring employers to put a lot more money in health-savings accounts that go with the plans.

Oncologist Ezekiel Emanuel, the former special adviser for health care policy to the director of the Office of Management and Budget, says insurers and employers moved to high-deductible plans rather than trying to come up with “a more intelligent plan design.”

Emanuel, who is considered an architect of Obamacare, says that he is “not a fan of high-deductible plans” and that what’s needed are “smart deductibles” that don’t discourage people from using the services they really need to stay healthy. He cites the preventive care visits that aren’t subject to deductibles under the ACA.

Higher deductibles, he says, should apply to “discretionary services” like knee replacements and low or no deductibles should be for important treatment such as for insulin or ophthalmologist visits.

But Wright, the Georgia professor, says he doesn’t see any major changes on the near horizon.

“I wish I could be optimistic, but I’m not sure,” he says. “There’s a lot of reason to be worried about the future.”