High-deductible health care in the Affordable Care Act
One of the problems many conservatives have, or think they have, with the Affordable Care Act is that it doesn't make enough space for high-deductible options. But I've not heard many explain exactly how much more space they'd like to make. As Jon Cohn explains, the plans permitted under the legislation can have pretty high deductibles already:
Look closely at the standards for coverage in the insurance exchanges: The minimal, or bronze, insurance option allows out-of-pocket spending of up to $12,500 for a family of four. The actuarial value is 60 percent, which means, very roughly, that the plan only covers about 60 percent of the average person's medical bills. Those are some pretty high deductibles! I haven't made the apples-to-apples comparison and I don't know anybody who has, but I'm pretty sure the overall exposure is comparable to what you get in a Health Savings Account, which is the model Douthat and conservatives generally say they want [...]
Now, the Affordable Care Act does mitigate the effect of high cost sharing in a few crucial ways. Under the law, even the bronze plans will include the benefits in the basic, government-defined package -- with no annual or lifetime limits on total claims paid. That's a vast improvement over the present individual market, in which policies can have huge, hidden gaps that leave unsuspecting consumers paying bills they'd assumed were covered.
More important, the exchanges will have subsidies to offset both the premiums and cost-sharing for people who make less money. So poorer people would never face anything like $12,000 in out-of-pocket expenses; that's the reason I can live with the high deductibles.
Maybe that's what Douthat doesn't like about the Affordable Care Act. But my impression was always that conservatives like him weren't looking to stick lower income people with cost-sharing they really couldn't afford. What they wanted was cost-sharing severe enough to impose some price discipline on the system, which the Affordable Care Act would seem to do.
It's worth noting that some of the most interesting thinking on high-deductible health-care plans has come from Jason Furman, who is deputy director of the National Economic Council and was heavily involved in the administration's discussions about the bill.
| January 24, 2011; 12:14 PM ET
Categories: Health Reform
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