You’ve heard all about Obamacare’s deductibles. They’re too damn high, supposedly. Families are forced to pay for health plans that leave them on the hook for thousands of dollars in medical bills before their care is covered, leading them to skip doctors’ visits and meds even though they’re theoretically insured. The New York Times has written about the issue. Donald Trump has ranted about it (even though his own plan would send deductibles even higher). It’s a bipartisan frustration.
And there’s certainly some data to back up the griping. The health industry consultants at Avalere, for instance, find that the average silver plan deductible offered on Obamacare’s insurance exchanges rose to $3,703 this year. You might feel nauseous, too, if you were paying top dollar for that kind of health plan.
But judging from a new report by the Centers for Disease Control and Prevention, it seems that the hysteria over Obamacare’s deductibles has been a bit overblown. It turns out that among those who buy their insurance directly on the individual market, the share of Americans enrolled in a high-deductible health plan has been pretty much flat since 2011, before Obamacare’s major elements kicked in. At the same time, there has been a major shift toward high-deductible plans among workers who get insurance through their employers—Americans who are far less impacted by the health care law.
The CDC, which based its findings on data from the National Health Interview Survey, considers deductibles “high” if they cost $1,300 for an individual or $2,600 for a family—far below the sorts of dollar figures that have turned the issue into a political talking point. Average deductibles may still be up, and high-deductible plans may be even less generous than before. Some individuals who had a low deductible before may have a higher one now. But there hasn’t been a wholesale shift toward the kind of ”useless” insurance that journalists and politicians have focused on.
However, the CDC report hints at one reason why the deductibles issue has been so politically resonant: It disproportionately seems to affect middle- and upper-middle-class families—aka likely voters. Almost half of those who directly purchased a high-deductible health plan on the individual market earned more than 400 percent of the poverty line—about $97,000 for a family of four. Those households only purchased about 30 percent of traditional, lower-deductible plans. This is a bit counterintuitive: If anything, you’d expect higher-earning families to make up a greater share of the market for more generous coverage.
Why are wealthier Americans buying worse insurance? It’s hard to say for sure; the CDC report doesn’t trace this particular trend over time, so it’s impossible to tell whether it changed with Obamacare’s implementation. But my guess is that you can boil it down to one word: subsidies. Low-income Americans receive generous tax credits that reduce their coverage premiums, while the government also pays insurers to lower their out-of-pocket costs, including deductibles. However, the premium tax credits phase out entirely for families starting at 400 percent of the poverty mark. Without any financial help, people are resorting to cheaper, less generous plans that leave them covering many of their own costs. The anger over high deductibles is one more reflection of how, even though the health-reform law did a great deal for the near-poor, Obamacare failed to do enough for an important and vocal slice of the middle class.
