The New York Times reports that many Americans with health insurance purchased under Obamacare will face substantial price increases next year — in some cases as much as 20 percent — unless they switch plans. The Times report is based on data released by the Obama administration on Friday, just hours before the health insurance marketplace opened to buyers seeking insurance for 2015.
According to the Times, “the new data means that many of the seven million people who have bought insurance through federal and state exchanges will have to change to different health plans if they want to avoid paying more — an inconvenience for consumers just becoming accustomed to their coverage.” Beyond the matter of inconvenience, there is also the fact that the new plan, available at about the price of the old one, typically will be less desirable than the old plan, which now costs more.
The Times provides an example from Nashville:
A 40-year-old in Nashville, with the cheapest midlevel, or silver plan, will pay $220 a month next year, compared to $181 a month this year, for the same plan. The least expensive plan is offered by another insurer, Community Health Alliance, one of the so-called co-op plans created under the federal law. It offers coverage for a monthly premium of $194.
But the lower premium [ed: which is still higher than the 2014 premium] means that consumers will have to pay a much larger annual deductible, $4,000, rather than $2,000. A policyholder who becomes seriously ill or has a costly chronic condition could pay hundreds of dollars in out-of-pocket expenses.
In addition, different health plans often have different networks of doctors and hospitals and cover different drugs, meaning that consumers who change plans may have to pay more for the same medicines.
There’s more. According to the Times, if the price for a low-cost benchmark plan in the area has dropped, the amount of federal subsidies provided by the law could be less, meaning that consumers may have to pay more unless they switch plans.
The whole thing smacks of bait and switch. The difference? Normally, you don’t get fined for not taking the bait.
High deductibles will continue to be a hallmark of Obamacare plans. For example, in Muscogee County, Georgia, 74 health plans are available on the federal exchange. Fifty-two of the plans have deductibles of $2,500 or more, and 27 have deductibles of $5,000 or more.
Similarly, in Charleston, West Virginia, half of the 14 health plans available have deductibles of $2,500 or more, and one has a deductible of $5,000 or more. And in Jeff Davis County, Texas, all but four of the 17 plans available have deductibles of $2,500 or more, and seven plans have deductibles of $5,000 or more.
The IRS defines a high-deductible plan as one with a deductible of $1,300 or more. Many Obamacare plans are better described as stratospheric-deductible plans. And many consumers will be forced to switch to such plans if they wish to keep their premiums roughly the same.
Obamacare continues to be full of unpleasant surprises. Perhaps the Supreme Court will pull the plug on it.