Not So Affordable Care: Job-based Insurance Annual Premiums Reach $20,000 Record High
So to kick off this blog I thought it would be interesting to compare a few items relevant in my own life as it relates to the article (1). It’s open enrollment with my employer and I could choose plans of up to $13,500 a year for my share for the most expensive to include vision and dental family plans. But then as a military retiree, I can forgo the employer based plans for a retired military family plan for a fraction of the cost (a benefit after 20 years of military service). Or a no cost plan through the Veterans Affairs for myself (family excluded). But then I could go on my states Affordable Care Act (ACA) exchange for a family plan that ranges from $3000 a year to $17,000 a year for my share, but this does not include vision and dental, nor the costly deductible, nor a subsidy. I then have a family member with an employer based family plan who pays $19,000 a year, or $1600 a month from their paycheck, high deductible, and they don’t qualify for subsidy with the ACA. The article references that you now have:
“Companies and their workers for the first time are shelling out more than $20,000 on average for family health benefits in 2019 (1).
So much for the ACA being affordable. I know this topic touches the nerves of a lot of people. Gone are the days where the health insurance plans are actually affordable. Where the workers average wages grew 3.4%, the average annual family premium rose 4.9% to $20,576. Imagine now, if you’re an average worker with the median household income in the United States of $56,516 (2) trying to have a decent family plan:
“Costs are prohibitive when workers ….. have to shell out $7,000 a year just for their share of family premiums (1).”
The article says that workers are increasingly picking up larger portions of the premium costs with averages up to $30%. Another article references the average 2019 health insurance premiums are $1,403 per month for families of four who don’t qualify for subsidies (3). As such:
“Low-wage employees face some of the biggest challenges affording employer coverage, according to the survey. Among companies that offer health benefits, those with workers making less than $25,000 a year provide coverage to a smaller share of employees and require them to contribute about 40% toward premiums on average. Fewer low-wage workers take up employer health benefits as a result (1).”
Now think about something else. The aforementioned costs aren’t even referencing the deductible. That’s a whole other topic and point of contention for many people. The article reports the average single coverage deductible was $1655. Another source (4) states family bronze plans have an average deductible of just under $12,200 and an average out-of-pocket maximum of nearly $14,000. Thus, health insurance has become for many people, the largest monthly expenditure.
REFERENCES
- https://www.modernhealthcare.com/insurance/job-based-insurance-annual-premiums-reach-20000-record-high?utm_source=modern-healthcare-am-thursday&utm_medium=email&utm_campaign=20190925&utm_content=article5-headline
- https://www.cnbc.com/2017/08/24/how-much-americans-earn-at-every-age.html
- https://www.healthcarefinancenews.com/news/families-four-face-25000-average-annual-unsubsidized-aca-costs-2019
- https://www.cnn.com/2019/04/01/politics/fact-check-obamacare-deductibles/index.html
This was kind of touched on by the Free Market Surgery article just below, too. The individual plans on the ACA exchanges are awful with very high premiums and deductibles. If the ACA wanted to require people to buy insurance, it was incumbent on the government to arrange for good, affordable insurance and not crap insurance that forces people to choose between paying their mortgage and having health insurance. What is ironic is that one of the justifications for the ACA was is people wouldn’t have to buy catastrophic insurance plans that didn’t cover basic care, but now on the individual exchanges the plans are actually much worse than what people had before.
The individual exchange plans were terrible before the current administration, this is not a recent problem. This was a major bug in the ACA and while I’ve heard politicians say this is something that could be easily fixed, I haven’t heard any specifics on how they would do so.
“This was a major bug in the ACA”
For the insurers who wrote the ACA and paid for the congress critters to pass it, this isn’t a bug, it’s a strength.
It’s well documented the U.S.A. has the most expensive healthcare in the world.
https://www.healthsystemtracker.org/chart-collection/how-do-healthcare-prices-and-use-in-the-u-s-compare-to-other-countries/#item-start
Do we get out money’s worth with higher quality? It’s also well documented- no.
https://www.healthsystemtracker.org/chart-collection/quality-u-s-healthcare-system-compare-countries/#item-start