Ringing in the new year represents a time of hope for great things to come. It’s a time for resolutions of personal improvement — whether that’s more exercise or better relationships.
It’s also a time where health insurers deliver a Christmas lump of coal to policyholders. As the famous glass ball drops above Times Square, Obamacare policyholders will see the opposite. They won’t see a drop, but instead a healthy rise in costs, specifically premiums and deductibles.
Think of premiums and deductibles as membership in a club — whether it’s a country club or an athletic club. The deductible would be analogous to the initiation fee, something you pay for the privilege of joining the club. Except with health insurance, you pay the initiation fee not once but each and every year.
The premium is analogous to the monthly dues. You write a check each month for the privilege of maintaining your club membership regardless of how often you use the club or if you even use it at all. Country clubs require dues payment even in winter when the pool, tennis courts and golf course are closed.
You are in essence an uninsured patient until you meet your deductible.
A health insurance deductible is the amount of money you must pay out of your own pocket before insurance kicks in and pays your bills. This means, in essence, you’re an uninsured patient until you meet your deductible. So have a heart attack or break your leg in January and you are paying the full amount of your care until the deductible is met.
Deductibles for the lowest-priced Obamacare plans will average more than $6,000 for 2017, according to numerous sources. It’s the first time that price threshold has been passed — and that’s just for an individual.
For families, the average deductible for an Obamacare bronze policy (the cheapest option) will be over $12,000. How many families have that kind of money available to spend just after Christmas?
The slightly better Obamacare silver plans have smaller deductibles, but that’s still a big lump of coal after the holidays. Silver plan deductibles in 2017 will average $3,500 for an individual and $7,500 for a family.
Meeting the deductible doesn’t mean you can close your wallet. There is still the copayment, the portion of your medical bill you as the patient must pay after meeting the deductible. The copay can be anywhere from 10 percent to 40 percent, depending on the plan.
If your family health bills are $18,000, you pay the first $12,000 yourself as the deductible. A silver plan’s 30-percent copay for that last $6,000 comes to $1,800 — which you are responsible for. Happy New Year.
Don’t forget the monthly premium. That must be paid without fail each month if you want to keep your insurance policy active — regardless of whether or not you actually use your insurance.
Obamacare premiums are set to rise from 20 to 25 percent in 2017. For the average silver plan, the premium will be just over $400 per month for an individual policy, and higher for a family policy. Do the math. Premiums could cost another $5,000 to $10,000 per year aside from the previously mentioned deductible and copayment. Happy Hanukkah.
If your New Year’s resolution is to stay healthy and you accomplish that, you may dodge the deductible and copay, but not the monthly premium. If you do get sick or injured, however, be prepared for the Times Square ball to land solidly on your wallet.
Remember when President Obama promised that health care premiums would fall $2,500 per family? How’s that “Affordable Care Act” working out?
As millions sing “Auld Lang Syne” for the new year, how many will “take a cup of kindness” versus a large and expensive lump of coal?
Brian C Joondeph, M.D., MPS, is a Denver-based physician and writer.