The Affordable Care Act is turning out to be less than affordable for some consumers.
That’s because many of the plans carry huge deductibles, creating potential financial problems for middle-class consumers. Some “bronze”-level plans, the lowest level of coverage, carry deductibles as high as $12,700 per year for a family of four.
The deductible is the amount a family or insured person must pay out of pocket before the health care plan kicks in. For a household with the country’s median annual income — about $52,000 — such a hefty deductible may create an unhealthy incentive: skipping treatment and medication in order to keep out-of-pocket spending low.
The average individual deductible for a bronze plan is a whopping $5,081 per year, according to research provided to CBS MoneyWatch from HealthPocket, a technology company that ranks health care plans.
What’s worse, that represents an increase of 40 percent from the average deductible for an individually purchased plan before the federal health care overhaul, according to The Wall Street Journal.
The math makes it clear that many middle-income families will be hit the hardest. That’s because tax credits are only available for people earning up to four times the federal poverty level. In essence, individuals with annual income of more than $46,960 won’t qualify for the subsidies. For families of four, the cut-off for tax credits is an annual income of about $94,000.
In Texas alone, that means nearly 1.1 million people who may seek health care coverage through Obamacare won’t qualify for tax credits, or about one-third of the state’s potential pool of customers, according to the Henry J. Kaiser Family Foundation.
Some consumers are “seeing sticker shock" with the Obamacare plans, Jamie Court, president of Consumer Watchdog, told The Journal. “Once they start to use the policy, they will see a second sticker shock" with the high deductibles, he added.
To be sure, plans with low or negligible deductibles are available, as long as consumers have the financial ability to pay higher monthly premiums.
Take consumers living in Houston. For a family of four able to pay a monthly premium of $1,033 to buy the platinum-level plan — the highest available under the health care overhaul — they’ll find no deductible at all, according to HealthCare.gov.
But that means shelling out almost $12,400 per year in monthly premiums, or about the same as the deductible for the bronze plans. Either way, families and individuals who don’t qualify for tax credits may find Obamacare failing to deliver on its promise of affordable health care.