I Have Great Health Insurance...So Why Are My Medical Bills So High?
A new study shows that even with good healthcare insurance, nearly 24 million people are still spending a large percentage of their income on premiums and/or medical costs.
Thanks to the ACA, business with over 50 employees must offer healthcare insurance. But that doesn't mean that it's going to be good coverage. And it doesn't mean that it will be free. Most employers require that the employee shoulder some or all of the premium costs. And with higher deductibles, it can feel like you don't have insurance at all.
This study presents not only conclusions based on the data. But it also suggests certain Congressional action to alleviate this problem:
There are several policy options that could reduce this increasing cost burden. To lower households’ premium contributions to employer plans, Congress could:
Fix the so-called family coverage glitch by pegging affordability and access to marketplace subsidies to the cost of family coverage rather than single coverage. Currently, under the Affordable Care Act, a worker with employer premium expenses for a single-person plan that exceed 9.9 percent of income may be eligible for subsidized marketplace coverage. But families that spend that much for a family plan are not eligible, creating the family coverage glitch.9
Raise the “minimum value standard,” or the percentage of medical costs that employer plans must cover, on average. When a plan fails to meet this standard, the employer is subject to a penalty, and enrollees may be eligible for tax credits to buy marketplace coverage.
To improve the financial protectiveness of employer plans, Congress could:
Require plans to expand and standardize the set of services that are exempt from the deductible. The ACA requires all health plans to cover a range of preventive care services before the deductible kicks in, and many employer plans already voluntarily exclude additional services from the deductible. But the number and type of additional excluded services varies considerably.10
Make a refundable tax credit available to people with employer coverage whose out-of-pocket spending for health care exceeds a certain percentage of income.11