The median deductible for a person who bought a health plan on the HealthCare.gov marketplace is $850 this year, down from an average of $900 in 2015, as more people qualify for cost-sharing subsidies, according to new HHS numbers.
But that median figure hides an interesting fact from the same report. This year, 43% of marketplace enrollees still have an average deductible of at least $2,500, a burden for people and families who are low-income or middle-class and face a large healthcare expense, like a hospitalization.
“If your budget or income isn't growing, then expenditures like healthcare are going to start crowding into other expenditures like housing and paying for cellphones,” Sara Collins, a healthcare economist at the Commonwealth Fund, told Modern Healthcare in 2014.
Deductibles—or the amount consumers have to pay out of pocket for doctor visits, prescription drugs and other healthcare services before health insurance kicks in—have become a top issue for Affordable Care Act plans and employer plans. People who receive their health insurance through their jobs have faced large hikes to their deductibles over the past several years, and more employers are offering high-deductible plans, according to the Kaiser Family Foundation.
Yet high deductibles are more common in the ACA's individual marketplaces, based on Commonwealth Fund survey data. Health insurance companies have used higher deductibles and narrow networks of hospitals and doctors as a way to keep premiums in check. Advocates of higher deductibles also believe the plans will force consumers to engage in more healthcare price shopping, although recent research shows some problems with that premise.
The average $850 deductible figure touted by the federal government debunks “misconceptions” that the ACA's plans have burdensome deductibles and that out-of-pocket costs are crushing consumers, said Christen Linke Young, principal deputy director of the CMS' Center for Consumer Information and Insurance Oversight. Cost-sharing subsidies bring down the out-of-pocket spending for many services, including generic drugs and primary-care visits, thereby making coverage more robust and on par with employer coverage, she said.
Almost 70% of the 11.1 million ACA enrollees, as of March 31, picked a silver-level plan for the 2016 calendar year. People who earn up to 400% of the federal poverty level receive federal tax credits to help pay down their monthly premiums. A lesser known fact is that people who earn between 100% and 250% of poverty and specifically choose a silver plan—or about 6.35 million people this year—receive the sliding-scale subsidies that help cover deductibles and other out-of-pocket costs. HHS factored in those subsidies to calculate median deductibles.
Those cost-sharing reductions also are the thrust of a federal lawsuit, in which House Republicans argued the Obama administration illegally shifted money around to make the subsidies available.
HHS' report shows that low-income individuals and families are indeed benefiting from the law's insurance expansion and access to preventive care. The ACA also caps out-of-pocket costs to an annual limit, a consumer protection which previously did not exist.
But people who make more than 250% of the federal poverty level—or $29,700 for an individual and $60,750 for a family of four in 2016—are not entitled to any cost-sharing subsidies and must pay their deductibles in full. Young argued those people are still “getting meaningful access” to care.
The issue of high deductible plans has been raised on the presidential election trail. Vermont Sen. Bernie Sanders, who endorsed presumptive Democratic presidential nominee Hillary Clinton Tuesday, criticized the ACA's plans in March for having “outrageously high” deductibles and said the law has left people “underinsured.” Sanders supports a single-payer system.
