Reclaiming Common Sense

Trick or Treat? Obamacare not Reducing Costs

This column has published many articles on Obamacare, the Affordable Care Act, and on inflation. The Consumer Price Index data for September indicated that health insurance jumped by over 8% from September 2015 to September 2016. This is receiving very little attention. The percentage of our income taken to pay for health insurance has also increased. This has received "no" coverage.  The ACA was supposed to reduce our costs and increase our quality of coverage. The Kaiser Foundation produces an annual Employer Health Benefits Survey report.  There are two financial aspects that concern most people: The Premium and The Deductible. They differ between single person coverage and family coverage, as would be expected. They also differ by plan type, as would be expected. What isn't expected if for a plan designed to reduce patients costs to raise the cost of the plan premiums, the deductibles and the percent responsibility of the employee.

Deductibles have been Rising. There are four types of Health Care Plans that were analyzed by the Kaiser Foundation: Health Maintenance Organizations (HMOs,) Preferred Provider Organizations (PPOs,) Point of Service (POS) Plans, a hybrid of PPO and HMO plans, and a High Deductible Health Plan with Savings Option (HDHP.)There was a huge spike in deductibles for the POS plan between 2015 and 2016. HMO deductibles have risen from $352 during 2006 to $917 during 2015. PPO deductibles have risen from $473 to $1028. The biggest jump was the hybrid POS deductible from $928 to $1717. It is no surprise that the High Deductible plan has the highest deductible up from $1715 to $2199.

Family Plan deductibles also are Up from 2010 through 2015. The data for HMOs is missing from the Kaiser reports for 2006, 2007, and 2008. The High Deductible information is also missing from 2006 and 2007. There are  two ways to examine the data. You can look at the full cost of the family plan or the per person costs.The per person costs are higher for families than individuals depending on the plan type.  HMOs and POS plans save families money with regard to the deductibles. Families pay more for High Deductible plans and PPOs.

The Premium Costs for Single Coverage have  increased for almost every year since 1999 for employees. Some years the employees see their share increase faster than the employer share. The employers are still paying the lion share of the premium costs.  We did see a decline in the employee share during 2015.

The Employee share of the Premiums is at a All-time High for Single Coverage. The employee was paying less than 15% of the premium during 1999, 2000, 2001, and 2006. The percentage carried by the employee has been rising , almost annually, since the Great Recession.

A similar increase in Family Premiums is also being seen. The Family Premium data is the total cost for a family plan, not a per person cost. That said, the worker contribution is up $2000 since 2007 while the employer contribution has increased by  $4000.It should also be noted that both single coverage and family coverage employees saw their costs increase faster than the employers during 2016.  Employees have seen their share of the premiums increase from 27.10 to 29.09%

Employer Insurance Coverage is down for companies with 3-24 workers and 25-49 workers. We saw a peak level of coverage for both company sizes during the years leading up to the Great Recession. The peak post-recession  levels of 59% and 60% are nowhere to be seen right now. The smallest companies have brought insurance coverage down to 32% during 2016. This could be because of having more seasonal employees or more part-time employees. Coverage of all employees are down from over 60% prior to the recession to 55% during 2016.

We are seeing premiums rise, deductibles rise, and employees paying a larger share of the costs. We are also seeing a decrease in the percentage of employed individuals receiving employer provided coverage.

That is known as a lose, lose, lose, lose deal.