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Health Care Costs Hurt the Average Family

By November 25, 2015Commentary

Consumers could and should feel that they were misled about the supposed benefits from the health reform law, in particular the claim that it would lower insurance premiums and the average family’s health care costs.  While there has been an expansion of coverage, on the commercial side that insurance almost always includes very high cost-sharing amounts.  This is causing substantial stress on household finances, as confirmed in a Commonwealth Fund report.  (Commonwealth Brief)   The authors used the survey to construct a health care affordability index, which compares premiums and out-of-pocket costs to household income.  The survey included people who had health coverage through their employer, those who got it from the exchanges and those who had individual coverage through traditional sales channels.  According to the results, 13% of adults had unaffordable premiums, 10% had unaffordable deductibles and 11% had unaffordable out-of-pocket costs.  Since there is overlap, 25% of all adults had a health care affordability problem.  As you can imagine, the problem is most acute for low-income families, where 53% had unaffordable costs, compared to 30% of those in a middle-income category.  These results came from an objective calculation of affordability.  When consumers were asked about their perception of their premiums, deductibles and other out-of-pocket costs, they report much higher levels of difficulty in meeting these financial obligations.  For example while the index says 10% of adults have an unaffordable deductible, 43% reported that it was impossible or very difficult for them to pay their deductible.  And a significant percent of adults reported that the cost burden caused them to delay or avoid care, much of which appears to have been needed.  And concerns about cost may lead to uninformed behavior, for example, preventive care is always free of any cost-sharing, but many adults reported avoiding it because of cost-sharing.  It is not a bad thing for people to have some financial consequences in regard to their health and their health care, but consumers also need to be educated on and capable of making good decisions about the nature of their coverage and how to get good value for their health care spending.  There is no easy solution to the health care cost problem, but lying to people to get the reform law passed only breeds cynicism and despair.  And it is unconscionable that in the biggest source of the coverage expansion, Medicaid, people get far better coverage than that received by tax-paying workers.

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