Deductibles under Obamacare Outpacing Wage Increases

It’s always a good day to show how Obamacare is falling woefully short of its stated goals. Moe did a great job yesterday tying the albatross around Hillary’s neck just a little tighter. The recent bad news doesn’t end there, though. A recent Kaiser Family Foundation analysis is not kind to the law. From the New York Times, of all places:

Four of five workers who receive their insurance through an employer now pay a deductible, in which they must pay some of their medical bills before their coverage starts, according to Kaiser.

Those workers’ deductibles have climbed from a yearly average of $900 in 2010 for an individual plan to above $1,300 this year, while employees working for small businesses have an even higher average of $1,800 a year. One in five workers has a deductible of $2,000 or more.

Also of interest from the article: a merger of the nation’s two largest healthcare companies, currently being scrutinized by the Senate, will only create even higher costs for coverage. Furthermore, the Kaiser analysis only studies employer provided healthcare plans, but policies from state-run exchanges also rely on high deductibles to keep costs low. As Kaiser notes, the much derided Cadillac tax could make this situation even worse. Alex Nixon of the Pittsburgh Tribune-Review, discusses this in greater detail:

One of the main ways firms can avoid being subject to the tax is by raising deductibles, which is the amount of money an employee must pay before benefits kick in, said Gary Claxton, a vice president at the foundation.

“Our survey finds most large employers are already planning for the Cadillac tax, with some already taking steps to minimize its impact in 2018,” Claxton said. “Those changes likely will shift costs to workers, but exactly how and how much will vary for individual workers.”

The Cadillac tax was formed under President Obama’s signature health law to penalize companies for health plans with rich benefits on the theory that the coverage helps to drive up overall costs of medical insurance. The tax is paid on premiums above $10,200 for a single employee and $27,500 for family coverage. But rising costs are hitting many health plans, resulting in higher premiums and increasing the chance that even plans with average benefits could be subject to the tax.

“The Cadillac tax is something of a misnomer,” said Norm Kerr, a health care consultant with Downtown benefits firm Buck Consultants.

“It’s not the richness of the benefits; it’s the demographics of the population,” he said. “An employer with an older and less healthy workforce, their costs are going to be a lot more.”

Essentially, what all of this means is that, in order to avoid the 40% levy which will hit healthcare plans in 2018, companies are shifting the costs over to the workers–something anyone with a basic understanding of economics could have told Washington years ago. However, as the Times article explains, the real squeeze is this:

But as wages have stagnated, the steady increase in deductibles is squeezing an already beleaguered middle class. While employers have generally felt some relief from the burden of ever-rising health care costs in recent years, workers are feeling increasingly vulnerable to high medical bills.

This means, of course, that it is eating into more and more of a family or worker’s budget to seek healthcare. This analysis proves that conservatives were right to argue that Obamacare would increase healthcare costs for people, and that ultimately results in people seeking it less often, which could mean critical personal health issues might go unaddressed until they get out of control.

The evidence that Obamacare is woefully inadequate at even attempting to address our nation’s healthcare problems just keeps piling up. In fact, as stories like this demonstrate, it’s making the situation even worse. Moe’s post from yesterday illustrates that the popular dislike of the law has not gone away with time. Considering the hit people’s wallets have taken, this is understandable, but it’s also all the more reason why we need to make repealing the ACA an important part of the 2016 Republican platform. It’s also all the more reason to ensure that we get a principled conservative as the Republican nominee. None of this is unaccomplishable, but we have to get to work.