As polls and political trends indicate- many people in this country want the Affordable Care Act [ACA] repealed. This could be true for a number of reasons, but what is upsetting voters the most is their High Deductible Insurance Policies, and these do not actually come from the law.
Both the insurance industry and candidates opposing Obamacare would love for voters to believe that the policies they hate are the fault of the ACA – but if the law was repealed today the high deductible plans would remain untouched.
What is the truth about these policies, and where do they actually come from?
The Truth About High Deductible Insurance Plans
Many Americans are struggling with their high-deductible health insurance plans. These are policies where the insurance will not kick in until the first health care expenditures- the deductible- are paid by the patient.
Under the 2015 Tax Code a high-deductible plan has a deductible of not less than $1,300 for an individual or $2,600 for a family’s coverage, but the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) can be as high as $6,450, or $12,900 for a family.
This means that people can be left with thousands of dollars in medical debt for office visits, prescriptions, and other health care before they ever get any relief from their insurance policy.
Healthy people may not require enough care in a year to trigger the insurance they purchased- leaving them with a new experience of being “on their own” when getting regular check-ups and treatment.
People who have greater need, such as families with a child who sustained an injury or a parent with a newly diagnosed disease, will eventually see their policy assist them. This is good news because this is exactly when policies in the “good old days” would cap out or disappear because of a discovered preexisting condition. The bad news is they won’t see that assistance until they pay in full their (significant) deductible. This is undeniably causing hardship for many households.
In the meantime, physicians, hospitals, and other providers hate high deductible policies because they must collect debts from struggling families, not insurance giants. These policies leave people battling over bills that everyone assumed would be covered by the insurance that was purchased.
The reasons people hate these plans are clear, but what is not is where high deductible plans come from.
Taking that question literally, frequently these policies were purchased on the ACA Exchanges. It is true that in order to meet the low cost of plans as required on the Exchanges many of the policies offered are high- deductible plans. But not all Exchange policies have high deductibles, and the ACA does not require this type of policy.
High-Deductible plans are not even specific to the ACA. In recent years, there has been a precipitous increase in high-deductible plans offered to employees through employers. These are private policy choices offered by private insurance companies to private employers. They are not mandated or controlled by the ACA.
In fact, although the insurance industry loves to blame high-deductible policies on the ACA, they actually predate the law by many years if not decades.
The real answer to the question “where do high-deductible plans come from” is they are a chosen practice of the insurance industry itself.
What Does This Mean For Our Upcoming Election?
Donald Trump has promised to repeal the ACA if he becomes President, and Bernie Sanders is offering a different kind of health care reform altogether. Regardless of the obvious fact that a President cannot repeal a Congressional Act without the cooperation of Congress, these promises resonate well with many voters on both sides of the spectrum.
As I will discuss in future Fontenotes, repealing or replacing the ACA would have many implications, but high deductible insurance policies are in the market because of decisions being made by private insurance companies for business purposes and are neither required by nor dependent on the law.
Even if Obamacare is thrown out under the next administration- doing so will not cure the problem so many voters are having with their insurance.
In the meantime, confusion about the ACA is giving insurance companies cover for a practice they have always wanted to implement. If the law goes away so will that cover, but not the policies voters hate.
Want to Know More?
If you want to know more about your rights when purchasing health insurance on the ACA Exchanges, go here.
You may also be interested in this article from Consumer Reports with information that might help you when deciding what kind of policy is best for you and your family.