April 25, 2018
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Deductible Reasoning

As a health care reform bill inches forward, insurance companies have issued dire warnings about the consequences of the overhaul. The reforms will cost consumers more, they warn. But if their analysis is as cursory as the one done by Anthem for the state of Maine, lawmakers shouldn’t be swayed.

The first example in the company’s 17-page report is for a 25-year-old male from Androscoggin County in the individual market. Currently, this person pays $131 a month in health insurance premiums. Under the reform package currently being considered in Congress, this man would pay $357 per month if he did not qualify for a government subsidy. The difference is about $2,700 a year.

That, however, is only part of the picture. What the Anthem report doesn’t explain is that the deductible under such a plan will decrease substantially under the congressional reform. The plan used in the Anthem example has a $15,000 annual deductible, which means that — in addition to paying $131 a month — the subscriber would have to pay $15,000 himself before his insurance starts paying for treatment other than preventive medicine. This plan, sometimes called “catastrophic coverage,” is Anthem’s fastest growing product. It is often purchased by people who have lost group coverage, many times because an employer no longer can afford to offer it. Such a plan eases concerns about having to pay huge medical bills due to an accident or serious illness, but it comes at the steep price of paying up to $15,000 a year for more routine care.

The reform passed by the House caps annual deductibles at $3,500. Although Anthem says must people don’t reach the $15,000 limit in a year, the lower deductible will lead to substantial savings, likely exceeding the premium increases. The lower deductibles are nowhere to be found in Anthem’s analysis, which includes several case studies.

Passing off their report as a comprehensive analysis of the situation without including the decrease in deductibles is beyond misleading; it is unconscionable.

Anthem executives are right that the reform legislation does not do enough to address a fundamental problem of rapidly rising health care costs. This is not enough reason, however, to scuttle the insurance reforms now pending in Congress. As Rep. Mike Michaud said after voting for the reform bill in the House last week: “I could not in good conscience let the perfect be the enemy of the possible.”

Passage of comprehensive reform legislation remains possible. It is also necessary for the millions of people like the 25-year-old from Maine paying more than $15,000 a year for minimal coverage.

The bill now pending in the Senate needs revisions, but lawmakers shouldn’t base their votes on incomplete or distorted information.

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