Insurance: Out-of-pocket costs spiral out of control
Rising premiums and deductibles are pushing employer-based health insurance out of reach for more workers, said Reed Abelson in The New York Times. The Kaiser Family Foundation found that “the average premium paid by the employer and the employee for a family plan now tops $20,000 a year, with the worker contributing about $6,000.” Employers are the main source of health insurance in the United States, with employer plans covering about 153 million people. But premiums for such plans have risen about twice as fast as wages since 2009, leaving many Americans with increasingly difficult decisions. Jessie McCormick, a 27-year-old with a heart condition, calculated that she couldn’t afford the $1,200 a month in out-of-pocket expenses for her company’s health plan and deductibles. Instead, she quit her job to enroll in Medicaid. Many businesses have opted to increase deductibles instead of premiums, and “deductibles now account for more than half of workers’ out-of-pocket expenses,” said Darla Mercado in CNBC.com, up from 26 percent in 2008. The average deductible for a single worker with a high-deductible plan last year was $2,349.
Indeed, those high-deductible plans have tripled in number over the past decade, said Noam Levey in the Los Angeles Times. They were pitched as a way to give patients “skin in the game,” liberating them to comparison shop for lower prices and “forcing hospitals, doctors, and drugmakers to control cost.” But the shift was not the panacea that was promised. Many Americans prefer to trust their physicians for health-care decisions, and even if they do shop around, it’s common to find wildly inaccurate price estimates. “Hospitals, doctors, and other medical providers rely on approximately 10,000 individual billing codes to charge for services,” meaning consumers would have to price each separately. One woman’s itemized surgical bill revealed 23 individual charges—$65.23 for Lidocaine, $413 for oxygen—with the sum amounting to more than $5,900. Her insurance company’s website had originally said the cost would be $900.
Things have gotten so bad that “after years of pushing health-care costs onto workers, some employers are pressing pause,” said John Tozzi in Bloomberg.com. Delta Airlines, for example, “froze employees’ contributions to premiums for two years.” Some larger employers have reversed direction on high-deductible plans. In a survey of big companies, the share that say they plan to offer them as the only option dropped from 39 percent in 2018 to 25 percent. But many businesses feel stuck because “aggressive moves to tackle underlying medical costs, such as by cutting high-cost hospitals out of their networks,” have proved even less popular with employees than raising premiums. ■