Obamacare High Deductibles Will Lower Health Care Costs and Empty Patients' Pockets

Virginia is the first state to announce Obamacare premium increases for next year.  News reports claim the premium increases range from between 3.3 percent and 14.9 percent—not as high as some might have expected given all the new mandated coverages and guaranteed issue requirement forcing insurers to accept anyone. But there is a largely ignored factor applying downward pressure—and it’s something conservatives advocated for years.
 
To get a sense of the irony—not to mention hypocrisy—that is Obamacare, you need to understand that Democrats have long detested high-deductible health insurance policies.
 
While conservatives and Republicans have for decades recommended transitioning to high-deductible plans as a way to encourage patients to be value-conscious shoppers in the health care marketplace, Democrats accused them of being shills for big insurance and its profits. They asserted that high-deductible coverage is worthless—“substandard” to use President Obama’s term—because insurers got premiums but didn’t have to pay out very much.
 
But along comes Obamacare-qualified coverage, which turns out to be much more expensive than Obama predicted. And so people getting coverage in the health insurance exchanges are buying much higher deductibles.
 
How high, you ask?  According to a December HealthPocket survey, the average deductible in the exchanges is $5,081 for an individual in the Bronze plan and $10,386 for a family. And many people are opting for the maximum deductible: $6,250 for an individual and $12,500 for a family.
 
When people are faced with such high deductibles—much higher, incidentally, than most conservatives proposed—people will dramatically cut back their health care spending. And that lowers the growth in overall spending.
 
Indeed, one of the reasons that health care spending has been slowing over the past five or six years was the gradual expansion to consumer driven health plans, which combine a high-deductible health insurance policy with a tax-free health care spending account.
 
So while the Obamacare regulations and mandates drive up the cost of health insurance, very high deductibles mean that insurance won’t be paying for most of those costs; individuals will be paying for it themselves, out of their own pockets.
 
It’s not what Obama promised, but then that’s become the pattern.