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POLITICS
Many Say High Deductibles Make Their Health Law
Insurance All but Useless
By ROBERT PEAR NOV. 14, 2015
WASHINGTON — Obama administration officials, urging people to sign up for health insurance under the
Affordable Care Act, have trumpeted the low premiums available on the law’s new marketplaces.
But for many consumers, the sticker shock is coming not on the front end, when they purchase the plans,
but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling
nearly as vulnerable as they were before they had coverage.
“The deductible, $3,000 a year, makes it impossible to actually go to the doctor,” said David R. Reines,
60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. “We have insurance,
but can’t afford to use it.”
In many states, more than half the plans offered for sale through HealthCare.gov, the federal online
marketplace, have a deductible of $3,000 or more, a New York Times review has found. Those deductibles
are causing concern among Democrats — and some Republican detractors of the health law, who once
pushed high-deductible health plans in the belief that consumers would be more cost-conscious if they had
more of a financial stake or skin in the game.
“We could not afford the deductible,” said Kevin Fanning, 59, who lives in North Texas, near Wichita
Falls. “Basically I was paying for insurance I could not afford to use.”
He dropped his policy.
As the health care law enters its third annual open enrollment period, premiums and subsidies have
been one of the administration’s main selling points.
“Most Americans will find an option that costs less than $75 a month,” President Obama said.
Sylvia Mathews Burwell, the secretary of health and human services, issued a report analyzing premiums
in the 38 states that use HealthCare.gov. “Eight out of 10 returning consumers will be able to buy a plan with
premiums less than $100 a month after tax credits,” she said.
But in interviews, a number of consumers made it clear that premiums were only one side of the
affordability equation.
“Our deductible is so high, we practically pay for all of our medical expenses out of pocket,” said Wendy
Kaplan, 50, of Evanston, Ill. “So our policy is really there for emergencies only, and basic wellness
appointments.”
Her family of four pays premiums of $1,200 a month for coverage with an annual deductible of $12,700.
In Miami, the median deductible, according to HealthCare.gov, is $5,000. (Half of the plans are above
the median, and half below it.) In Jackson, Miss., the comparable figure is $5,500. In Chicago, the median
deductible is $3,400. In Phoenix, it is $4,000; in Houston and Des Moines, $3,000.
Ms. Burwell said the administration had “seen high levels of satisfaction with the marketplace.”
And the marketplaces do vary. In Newark, some plans have no deductible, although the median
deductible is $2,000, according to HealthCare.gov.
Health officials and insurance counselors cite several mitigating factors. All plans must cover preventive
services like mammograms and colonoscopies without a deductible or co-payment. Some plans may help pay
for some items, like generic drugs or visits to a primary care doctor, before patients have met the deductible.
Under the Affordable Care Act, health plans must have an overall limit on out-of-pocket costs, to protect
people with serious illness against financial ruin.
In addition, people with particularly low incomes can obtain discounts known as cost-sharing
reductions, which lower their deductibles and other out-of-pocket costs if they choose midlevel silver plans.
Consumer advocates say this assistance makes insurance a good bargain for people with annual incomes
from 100 percent to 250 percent of the poverty level ($11,770 to $29,425 for an individual).
To those worried about high out-of-pocket costs, Dave Chandra, a policy analyst at the liberal-leaning
Center on Budget and Policy Priorities, has some advice: “Everyone should come back to the marketplace and
shop. You may get a better deal.”
But for many consumers, the frustration is real, as is the financial strain. In employer-sponsored health
plans, deductibles have also been rising as companies shift costs to workers. Still, the average annual
deductible in employer plans, $1,320 for individual coverage according to the Kaiser Family Foundation, is
considerably less than the deductibles in many marketplace plans.
The Internal Revenue Service defines a high-deductible health plan as one with an annual deductible of
at least $1,300 for individual coverage or $2,600 for family coverage.
Sara Rosenbaum, a professor of health law and policy at George Washington University who supports
the health law, said the rising deductibles were part of a trend that she described as the “degradation of
health insurance.”
Insurers, she said, “designed plans with a hefty use of deductibles and cost-sharing in order to hold down
premiums” for low- and moderate-income consumers shopping in the public marketplaces.
But the deductibles are so high they may be scaring away some consumers.
Alexis C. Phillips, 29, of Houston, is the kind of consumer federal officials would like to enroll this fall.
But after reviewing the available plans, she said, she concluded: “The deductibles are ridiculously high. I will
never be able to go over the deductible unless something catastrophic happened to me. I’m better off not
purchasing that insurance and saving the money in case something bad happens.”
People who go without insurance next year may be subject to a penalty of $695 or about 2.5 percent of
their household income, whichever is greater.
Karin Rosner, a 45-year-old commercial freelance writer who lives in the Bronx, pays about $300 a
month, after a subsidy, for a silver insurance plan with a $1,750 deductible and a limit of $4,000 a year on
out-of-pocket expenses.
She is extremely nearsighted and has an eye condition that puts her at risk for a detached retina, but has
put off visits to a retina specialist because, she said, she would have to pay the entire cost out of pocket.
“While my premiums are affordable, the out-of-pocket expenses required to meet the deductible are
not,” said Ms. Rosner, who makes about $30,000 a year.
Mr. Fanning, the North Texan, said he and his wife had a policy with a monthly premium of about $500
and an annual deductible of about $10,000 after taking account of financial assistance. Their income is about
$32,000 a year.
The Fannings dropped the policy in July after he had a one-night hospital stay and she had tests for
kidney problems, and the bills started to roll in.
Josie Gibb of Albuquerque pays about $400 a month in premiums, after subsidies, for a silver-level
insurance plan with a deductible of $6,000. “The deductible,” she said, “is so high that I have to pay for
everything all year — visits with a gynecologist, a dermatologist, all blood work, all tests. It’s really just a
catastrophic policy.”
Another consumer, Anne Cornwell of Chattanooga, Tenn., said she was excited when Congress passed
the Affordable Care Act because she had been uninsured for several years. She is glad that she and her
husband now have insurance, because he has had tonsil cancer, heart problems and kidney stones this year.
But with a $10,000 deductible, it has still not been easy.
“When they said affordable, I thought they really meant affordable,” she said.
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A version of this article appears in print on November 15, 2015, on page A22 of the New York edition with the headline: Many Say High
Deductibles Make Their Health Law Insurance All but Useless .
© 2015 The New York Times Company
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