So the post I wrote about earlier – the one on insurance premiums and deductibles. That got me grumpy and I felt the need to explore it even further. I’m like that sometimes.
So let’s go back to the costs of healthcare. Let’s talk about the public cost and the hidden cost.
Proponents of the ACA like to point out that with subsidized health care, more people are now covered than before, and that with subsidies, it’s costing them less overall. This is true, from a certain point of view. The premium is subsidized, up to 100%, in fact. Of course, this means we’re actually paying it via our taxes, but there’s a lot less out of pocket expense than before.
This is the public cost that they’re so quick to point to. I believe they call this a “savings”.
But what if you didn’t have insurance before and now you have to have it. But, you make too much money so it’s only partially subsidized. In my case, that was about $400 per month out of pocket if I wanted insurance. Or I could take the penalty, which was about $2000 a year until President Trump reversed that penalty. For those looking at the math, that means I could pay $2000 to avoid paying an additional $2800, or $4800 total if I insured.
This is one of the hidden costs they don’t mention. I refer to this as “extortion”.
Then there’s the deductible. Say you’re one of those that doesn’t have to pay out of pocket for your insurance, but you still have to pay the deductible. For a family of five on a Bronze Plan, that could be somewhere between $10,000-$14,000 or so, depending on your options, etc. That’s 100% out of pocket /before/ you get the majority of the insurance benefits that were paid for via the premium. According to the Montana Department of Commerce, the median Montana family income was ~$53,300 in 2018. That means, as a percentage of income, if you were to actually benefit from your insurance plan, you have to incur medical expenses of 18.7-26.3% of your yearly gross income. That’s completely out of pocket.
That’s another hidden cost they don’t mention. It’s even worse if you take it as percentage of after tax income. The percentage will go up another 5% or so. If you want a basis for comparison, the average rent in Montana is $750-$1500 depending on the size and type of housing. So you may pay as much, or more, as a percentage of your income as a deductible than you would for your housing.
And that’s just to get the majority of benefits of an insurance plan that has already been paid for. And you need to pay all of this before the end of the year, or you start back at zero again when the deductible resets.
That’s not actually a hidden cost. I believe insurance companies call it a “feature”.
So, tell me- why do you think our system is somehow superior to systems in other countries? Show your work.