Beware of cost-shifting while shopping for health insurance

Starting Sunday, Americans can use the HealthCare.gov website to enroll in online insurance markets for 2016.
Starting Sunday, Americans can use the HealthCare.gov website to enroll in online insurance markets for 2016. The Associated Press

In the big picture, the data on health care costs looks positive as Americans prepare to choose insurance plans for 2016

People in employer-sponsored programs saw their premiums increase a manageable average of 4 percent last year, according to a nationwide survey.

The federal government estimates that eight of 10 Americans who enroll in the Affordable Care Act’s insurance exchange will pay less than $100 a month next year after receiving tax credits.

And total health care spending in the United States is expanding at about the same pace as the national economy, not outpacing it as it has in the past.

But for many people in the trenches, the picture is much less bright.

Consumers understand that premiums are relatively stable only because cost-sharing measures are at all-time highs. Their paychecks may not show big increases for health insurance, but they are carrying large deductibles and paying more in co-pays for doctor’s visits and prescription drugs.

That’s the case for people who purchase insurance through their employers and also for consumers who purchase individual policies on or off the federal marketplace. The pain is felt most sharply in smaller firms, where the share of workers on employer insurance plans with deductibles of $1,000 or more has soared from 16 percent in 2006 to 63 percent in 2015, according to research by the Kaiser Family Foundation.

These costs are going up while wages for most Americans have remained relatively flat. People are compensating by putting off health procedures, which is one reason total nationwide health spending is growing relatively slowly even as drug makers and medical device manufacturers reap big profits.

As the Center for American Progress put it in a report earlier this year, “almost everyone in the health care system is realizing savings, but employees’ costs are rising.”

This is an issue ripe for discussion on the presidential campaign trail and in the U.S. Congress. The knee-jerk answer for many — get rid of the Affordable Care Act — won’t solve the problem. Employer plans are the least affected by the insurance provisions in the federal law.

Leaders need to get beyond arguing about the existence of “Obamacare” and work on the many problems that the law doesn’t go far enough to solve, starting with the ridiculous costs and inefficiencies still embedded in the health care system.

With enrollment in the federal exchange beginning Sunday, that small slice of the insurance market is commanding much of the attention at the moment.

The U.S. Department of Health and Human Services has calculated that premiums for plans in the most popular tier will jump more than 20 percent next year in the Kansas City area, much more than the national average.

Throughout the state of Kansas, the increase in the benchmark plan will be 16 percent. Missouri will see an overall 10.4 percent increase.

That’s not necessarily a cause for panic on the part of consumers. In most cases, federal tax credits will compensate for the premium increase. And many subscribers can save money by shopping around among the plans on the marketplace, while being cautious about out-of-pocket expenses buried in the policies.

Cynthia Cox, associate director of health reform and private insurance for the Kaiser Family Foundation, said the sizable increase in this area likely reflects larger claims last year than insurers had anticipated. Other factors are higher projections for health care costs in general in 2016 and the phasing out of “premium stabilization” funds in the Affordable Care Act.

Predicting the cost of employer-based premiums for 2016 is more difficult because of the variables involved. If several consumers in a particular group racked up high medical expenses last year, everyone in the pool may end up with higher premiums.

Casey J. Stangel, an insurance broker in the Kansas City area, said some of his clients, especially smaller groups, are staggering under the prospect of double-digit rate increases.

“I do see increases like I’ve never seen before,” he said.

The Kansas Insurance Department has calculated that rate revisions in the state will range from a very slight decrease to a 10.5 percent increase. Some of the increase resulted from the Kansas Legislature raising a tax on health maintenance organizations last session.

Nationwide, most analysts are predicting increases in employer-based plans of 4 to 5 percent. But that, of course, omits the deductibles, co-pays and other shifted costs.

It’s easy to blame insurance companies for rising out-of-pocket costs. But employers shoulder some of the blame. The Center for American Progress report found that from 2011 to 2012, employers’ overall health insurance costs actually decreased by 0.5 percent. But workers’ expenses increased by 2.1 percent over that period.

It’s grossly unfair to ask workers to pay more for less care, while many in the health care system reap big profits and employers use tax-free health care benefits as an excuse to hold down wages.

Until the nation’s leaders get serious about reining in this particular form of exploitation, the health insurance enrollment period will continue to be an anxious season for millions of Americans.