Alarming predictions that the premiums for individual health plans would skyrocket in the first year of Obamacare turned out to be largely unfounded. But the roughly 8 million people who bought insurance through the Affordable Care Act exchanges may suffer some sticker shock as they begin using their benefits.
That’s because many of the plans make consumers shoulder a lot of the costs of their medical care through deductibles, co-pays, and co-insurance—payments the newly insured may not have grasped when they signed up. Research suggests that most people don’t understand those terms.
“Most people, as soon as they have health-care coverage, they expect to go to the drug store and pay whatever their co-pay is for their prescription, not have to meet a deductible,” says Gina Boscarino, senior policy director at Breakaway Policies. She helped produce a new report (pdf) with the Robert Wood Johnson Foundation examining the new health plans.
The trouble for consumers is that while premiums—the price you pay each month to have insurance—are easy to understand and compare, other aspects of health insurance policies are not.
Deductibles—the amount you pay out of pocket before the insurance starts paying—are a good example. In some plans, the cost of visits to a primary care doctor are covered with just a co-pay, while others require patients to pay for all or part of those office visits until the payments reach their deductible. Some plans have separate deductibles for prescription drugs and medical care, while others combine them. (All plans are required by law to cover preventive care, such as an annual checkup, at no charge to patients.)
The median deductible for silver-level Obamacare plans—the type most people on the exchanges bought—was $2,500, but the deductibles for an individual ranged from as little as zero to as high as $6,250. That’s close to the maximum out-of-pocket cost Obamacare plans can charge.
It’s worth highlighting that point: Even if people have to pay for a lot of care out of pocket, if their medical costs reach $6,350 (or double that for a family plan), insurance has to pay. That protects people from six-figure medical bills if they need expensive care for cancer or a serious injury.
The report suggests that the structure of the new exchange plans “may influence cost-sharing and benefit design” of employer plans as well, which cover 55 percent of Americans. Company health policies have already moved toward higher deductibles, in part as a strategy to limit premium hikes. Americans may just have to get used to sticker shock at the doctor’s office.