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Obamacare facts: While the Affordable Care Act (ACA) has helped millions of low-income Americans get medical care, middle-class citizens who have signed up for Obamacare plans are getting crushed financially.
Many middle-class people who enrolled in an Obamacare plan have not only seen premium rates rise, but are getting stuck with steep deductibles. Despite having health insurance, these folks often find they can't afford treatment.
"The deductible, $3,000 a year, makes it impossible to actually go to the doctor," David R. Reines, a 60-year-old former hardware salesman from New Jersey, told The New York Times. "We have insurance, but can't afford to use it."
According to healthcare consumer group Families USA, close to 30% of people with high-deductible Obamacare plans said they went without needed medical care in 2014 because of the high cost.
High-deductible health insurance plans are nothing new. Before Obamacare, mostly healthy people bought them to protect themselves from the impact of a catastrophic illness. And the premiums were low.
Obamacare Facts: High Deductibles Now Typical
But Obamacare has made high deductibles common on the majority of insurance plans offered through the exchanges. And they keep going up.
According to a Kaiser Family Foundation study, health insurance deductibles have grown six times faster than wages since 2010.
A high-deductible plan is one with a deductible of at least $1,300 per year for an individual or at least $2,600 a year for a family, according to the Internal Revenue Service (IRS).
But many Obamacare plans have much higher deductibles. In Chicago, the median deductible is $3,400, according to Healthcare.gov. In Phoenix, it's $4,000. In Miami, it's $5,000. Some family plans have deductibles as high as $12,000 to $13,000 a year.
That's a ton of money for the average cash-strapped American. One in four have no emergency savings, according to Bankrate.com. And a survey by the U.S. Federal Reserve in 2014 found that 47% of Americans, when faced with a $400 expense that needed to be paid immediately, would need to sell something or borrow the money.
It's no wonder that so many people are putting off needed medical care.
But wait. Wasn't the ACA supposed to make health insurance more affordable for more people?
That was the intent. But here's what happened…
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.
Obamacare is proving to be a nightmare for my family as both my children finished high school and entered the workforce. Both have been unable to find full-time permanent employment so it is impossible to predict what their annual income will be. We are in Georgia, where there is no medicaid expansion, so if their income drops one dollar too low, yes, I said too LOW, they will lose all the subsidy and be required to pay the full premium. Worse yet, is that a single dollar decrease in income will cost them thousands of dollars in out-of-pocket costs for medical care. (Dollars they will not have.) For example, my daughter's income (works an average of 33 hours per week, all that is offered to her) is predicted to fall at about $11,770, right where the cut-off for the program is. If she earns $11,770 for the year, she will pay $47/month premium and have a $250 annual deductible with $600 max/year out-of-pocket medical expenses. Sounds great, doesn't it? But if her annual income turns out to be $11,769, for the exact same plan, her tax return will adjust her premium to $151 and her deductible becomes $3,500/year and out-of-pocket max $5,200. She does not set her own hours, but works every hour her employer will offer her. Her situation is due to the non-expansion of medicaid in Georgia, but my son, whose income is a bit higher, has discovered similar issues with the program and that is: as income increases, not only does the premium subsidy decrease but the deductible and maximum out-of-pocket increase greatly and at single dollar cliffs. For example, for income $17,655, the deductible is only $250 and max out-of-pocket is $600, but for income $17,656, the deductible increases to $750 and out-of-pocket to $1,500. So a single higher dollar in income can cost a person over $900 in medical costs at that income level. There is another increase in deductible and out-of-pocket costs at about $23,545 where the deductible is $2,250 and out-of-pocket $4,650. I understand that these increases are due to a subsidy of the deductibles and out-of-pocket costs for lower income individuals, however the increases should be gradual, not over a single dollar. Where is the incentive for our young people to increase their earnings potential if this is their first lesson at how our system works? Certainly there is a better way to provide health care to our citizens. This plan does not work…whether you are in a medicaid expansion state or not. My daughter may well end up paying out more than 15% of her small income in health care premiums for a plan that will offer her nothing more than catastrophic coverage. There is no way to know in advance if she will fall under or above the cut-off point for any assistance. This will guarantee that when she needs preventative care, she will not get it because she will not be able to afford it after paying out so much of her income for insurance. My son is so discouraged at seeing how much of his income is being taken from him in the name of providing him health care and yet he cannot afford to go to the doctor or chiropractor when his back aches from the long days of labor. I know the British system and the Canadian system are not perfect, but they are better than this. Our legislators are allowing the insurance companies to dictate how they want the system to work in the US, and they are what is wrong with our health care system to begin with. They provide no health services whatsoever, but they are bleeding us all dry. I have nearly come to the conclusion that it is better to just pay the penalty than try to play this game. Pay it under protest, but at least there might be a few dollars left in our pockets for a doctor's or chiropractor's visit now and then.
Kathryn — I don't see why they just don't get it. I understand you fully because I am basically going thru the same thing will premiums, deductibles and out of pocket. I am a house wife and have been now for over 14 years. I was doing ok with my insurance until my husband retired. Then I had to resort to buying my own insurance outright. That was ok for a couple of years. Even before obamacare my premiums kept going up each year until I could not afford insurance. I prayed like hell that I would be ok and not needing insurance. Than obamacare came along and I had to buy insurance or pay the fee. I got insurance and started paying the premiums – into that a couple months the insurance company said I was going to be dropped because the insurance I had was not compliant with obamacare. I was livid. I asked why they set me up with this insurance if it was not compliant. So, I dropped that insurance and went hunting for something else. I found an insurance that accepted me. I got what I could afford. Guess what, you guessed — one whole year paying into this new one and I got a letter – you are being dropped as of December 31, 2015 because we will no longer carry the type insurance you now have. I told the insurance agent – "It's like pissing my money away for the past year". Something like it – was the response I received. What a piece of crap. As of January, I will be paying double the premiums, triple the out of pocket and the deductible will be so high – I will never be able to be sick while I HAVE TO pay for this so call " friggen obamacare". And obama says he is exempt from getting this insurance. I would love to slap this jerk to mars so he can't come back. Obama has totally destroyed what America is all about.
If you and/or your family are basically healthy and generally follow Christian values you may want to browse for one of the HealthSHARE plans that are available. If they accept you, you can be exempt from the ACA altogether. So sad the media and government do not tell people about them but that is another topic.
Thank you. Looking into them. Currently uninsured. Haven't been to doc in two years. Just want something for emergencies.
"Just sign the bill" Pelosi said , "read it late".
She has different insurance
Thomas Jefferson warned of "oligarchy"
"such workers have started to forego needed medical treatment because they can't afford it".
so it's working as planned. reduce the demand for medical treatment because most of it is detrimental to your health anyway.
The sole purpose for this fiasco called ACA is the destruction of the middle class. If the middle class is destroyed, they win….
Typical US, complicated and not well thought out. The culprits are the capitalists who want to "make" (not earn) money on everything on the face of the earth.
In my home country [Germany -Ed.] everyone is insured because it is mandatory. The premiums are not all that high because most insurances are not for profit and their admin cost is about 5 to 6% of the premium. Deductibles? Never heard of. The only time in 40 plus years I has a deductible was during a hospital stay because the government figures, rightfully so, that I do not need to buy food. That deductible was somewhat near $15 in today's money per day. Btw, health insurance premiums are a percentage of the income, no worry for anyone.
In the US there should be a mandate for being insured and no penalty. Medicare should be open to everyone. But again, the greedy capitalists, supported by the inept administrators, just do not want to give up their fat profits.
You make a lot of great points. So many people are confusing affordable health care (Obamacare) with affordable health insurance. Obamacare doesn't decide your costs for insurance and this can mainly be blamed on republican congressmen who are funded by insurance providers but blaming doesn't help anyone. Instead, all of our money now is being given to insurance companies and they are banking huge profits, while doctors and hospitals are seeing less because all of us will stop going to the doctors.
Our healthcare is not something we should be allowing for profit corporations to control. We all deserve good health. Instead of all of us pumping all of our money to the middle man, it should be going directly to whoever is supply the actual healthcare so that all of us could just walk in and get services when we need them. Do you know how much money is spent every year just to handle all the insurance handling and paperwork? It's insane that the people we elected into office are doing this to us.
Thanks for the accurate article, except for your line: "Unfortunately, Obamacare's architects misjudged how the health insurance market would react to all the changes the law made." It is my belief and the belief of many others that this was not misjudged, but purposeful in order for this ACA system to collapse, requiring the Govt to come in and "save the day" by instituting a single payer, govt-run system like Medicare for everyone. This law must be repealed and somehow an smooth transition back to a free market system with controls and mandates again run by private insurers with provisions for the poor as in clinics or subsidies. Get rid of the ACA!
Might be interesting to note that "our congress did this, not "our President".
Seriously???? Our Democratice Congress = our President in ALL policy matters. Oh and, by the way, the President signed the bill.
Thank you for reminding people of this.
Also, notice how many people confuse affordable healthcare with affordable health insurance. None of us pay for healthcare. All of our money is going to these for profit insurance providers. They are in control now.
Worst thing I saw in the US. You have to pay for not having health insurance. Next will be, people will have to pay if want just to live???
Unless you're a non-producing welfare sucker of some type, Obamacare is bad news. Others enroll in an individual Obamacare policy that locks them into higher and higher premiums, having huge co-pays, ever larger deductibles if serious illness of injury visits leading to bankruptcy, and fewer choices of providers if in fact they find one.
As in the article, the middle class has been screwed, but the U.S. economy has been doomed. With Obamacare making employers cautious to hire, cutting hours, cutting wages, and forcing retirement of most productive senior workers, the economy is circling the bowl. Economic effect to the individual has been worse. Added inflation of Obamacare expenses plus with Obama moneying the Banksters with $8 Trillion to not only prop up worldwide stock markets, but gambling our money overseas on worldwide commodities with resulting increase in food costs worldwide devastating families and sucking all the cash out of the U.S. economy. After paying monthly inflated bills, folks have NO MONEY and the emergency funds of which you speak no longer exist.
The most shameful effect of Obamacare is not covered by any media. Previously, almost all of those with "uninsurable" pre-existing conditions were those who chose not to have insurance or pay premiums UNTIL THE CONDITION SHOWED UP. Before Obamacare, those who HAD chosen to pay premiums and developed a costly to treat condition due to injury or sickness were continuously covered by their policy. ENTER OBAMACARE!! That second group above just had their policies canceled and now they have to seek insurance with an expensive to treat pre-existing condition. This artificially created group now have to pay two, three, four, five, six, seven, eight, nine, or even ten times their previous premiums for junk coverage with huge deductibles!!!
So it's like this folks…a car is totaled when the costs of fixing it are more than it's worth when it's fixed. With the damage done to the economy and individuals, even with a perfectly functioning website, Obamacare has a negative worth versus what we had for healthcare insurance before the ACA was passed, or what it'll ever be worth in the future. Is Obamacare totaled??? You figure it out!!!
My husband and I are both 60, retired business owners. For many years we provided ourselves and our employees with health insurance. After working 7 days a week for over 35 years, we are seeing all of our hard-earned money being spent on insurance. We are both healthy so we have a 12400 deductible policy which costs us 1036.00 a month. We basically pay for everything out of our pocket – no vision or dental covered. Wouldn't it be great for the American economy to have all of this money circulating instead of going to Obamacare? A lot of those who are subsidized might find a job!
I value what you're saying, so I want to help by redirecting your misunderstanding. Your money is not going "to obamacare", your money is going to a for-profit insurance company, which means they have to charge you enough money to cover all the medical bills of all their clients who fall ill, plus enough to cover the millions it costs to run the insurance company (salaries, overhead, etc), plus enough to make a huge profit. We need to get rid of the middle man all together. If all healthcare costs went directly through the government just like costs for roads and bridges, police etc, and it just came out of our tax contributions, AND WE DEMAND THAT OUR TAX DOLLARS ARE SPENT ON US FIRST AND CORPORATE WELFARE LAST, people would have to understand that our taxes might go up, but we wouldn't have to deal with all of these premiums and deductibles that are costing some of us 30% of our income.
So, be angry, because this is a catastrophe, but be angry at your insurance provider and congress. "Obamacare" is just slang for the affordable healthcare act, it doesn't receive money.
My company sponsored insurance requires a $2500 deductible before they pay anything. What ever happened to the 80/20 plan?
Could you please let me know the obamacare facts?