State insurance deductible increase

Nathan Nascimento

What good is health insurance coverage if you can’t afford to actually use it?

Unfortunately, that’s not a rhetorical question. It’s one facing thousands of Michiganians who are required to purchase health insurance on the Affordable Care Act’s exchanges. As if rising premiums — which increased by an average of 6.1 percent in Michigan this year — weren’t already hard enough, skyrocketing deductibles have rendered many plans “all but useless,” according to a recent report in The New York Times.

And as a new analysis from my organization shows, it’s only getting worse.

While premiums are what it costs to have insurance, deductibles are what it costs to use it. Especially for low- and middle-income families, these out-of-pocket costs are placing affordable health care further out of reach.

My organization recently completed a new analysis of deductibles across the country, including Michigan. Relying on data from the Robert Wood Johnson Foundation and the federal agency overseeing the Affordable Care Act, we calculated weighted average deductibles by enrollment across gold, silver and bronze plans.

Here’s the short version: It’s not good.

All three metal categories increased by an average of $492, or 22 percent, in Michigan this year. Silver plans — which with 187,000 enrollees, are the most popular in the state — now have deductibles averaging $2,176, while bronze plan deductibles average $5,740.

In other words, the 249,000 Michiganians with bronze and silver plans will have to pay between $2,176 and $5,740 before their health insurance coverage kicks in.

That’s not an option for many families. A December survey by Bankrate.com found only 37 percent of Americans have the savings to pay for an unexpected expense of even $1,000.

What’s more is insurance premiums are increasing at the same time.

And there’s the real rub of health insurance under the Affordable Care Act. Consumers have increasingly fewer options and control over how they spend their health care dollars. Instead, they’re forced to purchase insurance policies from government exchanges whose premiums they cannot afford, and whose deductibles limit use.

It’s important to note that higher premiums are not bad by themselves. Some Michiganians may actually prefer high-deductible plans as a way to lower their premiums up front, or to assume more responsibility for their costs as they need it. But as we’re seeing, the Affordable Care Act is denying consumers those choices — and forcing them to pay higher costs all the way around.

It’s always something else with the Affordable Care Act.

Nathan Nascimento is director of state initiatives at Freedom Partners Chamber of Commerce.