Deductible Spending Soars
Between 2004 and 2014, average payments for deductibles and coinsurance rose considerably faster than the overall cost for covered benefits, while the average payments for copayments fell. As can be seen in the chart below, over this time period, patient cost-sharing rose substantially faster than payments for care by health plans as insurance coverage became a little less generous.
The above chart from the Kasiser Family Foundation report Cost Sharing Payments Increasing Rapidly Over Time.
Huge Cost Increases Coming
Those charts hugely understate the problem. All date to 2014.
In January, CNSNews reported CBO: Obamacare Costs to Increase in 2016 As Millions More Get Subsidized Insurance.
Taxpayers will have to shell out an estimated $18 billion more to subsidize Obamacare in 2016 despite lower than expected enrollment in the health care exchanges, according to a forecast by the non-partisan Congressional Budget Office (CBO).
In its latest 10-year economic forecast, CBO predicted that 13 million Americans would purchase health insurance through the Obamacare exchanges in 2016, with 11 million of them receiving government subsidies to help pay for their premiums.
But that figure is 40 percent lower than the 21 million enrollees CBO predicted last year would sign up.
Despite fewer than expected enrollees, the cost of running the exchanges will increase $18 billion, according to the CBO’s Budget and Economic Outlook: 2016 to 2026.
Many consumers will see large rate increases for the first time Nov. 1 — a week before they go to the polls.
The last thing Democrats want to contend with just a week before the 2016 presidential election is an outcry over double-digit insurance hikes as millions of Americans begin signing up for Obamacare.
But that looks increasingly likely as health plans socked by Obamacare losses look to regain their financial footing by raising rates.
Just a week after the nation’s largest insurer, UnitedHealth Group, pulled out of most Obamacare exchanges because it anticipates $650 million in losses this year, Aetna’s CEO said Thursday that his company expects to break even, but legislative fixes are needed to make the marketplace sustainable.
“I think a lot of insurance carriers expected red ink, but they didn’t expect this much red ink,” said Greg Scott, who oversees Deloitte’s health plans practice. “A number of carriers need double-digit increases.”
Republicans are already pouncing on UnitedHealth’s decision as proof the law is unworkable. “You’re seeing the beginning of the so-called insurance death spiral,” Sen. John Barrasso (R-Wyo.) said last week.
Thanks to Obamacare, it is frequently better for a middle class family to get no raise than even a decent sized raise.
The wage point varies, but many will say “Dear employer, please don’t pay me more. It will cost me a lot of money”.
Mike “Mish” Shedlock