Health Insurance is Expensive; I’m Glad Folks are Finally Learning the Truth

Bloomberg (Unaffordable Cost Seen for Some Under Affordable Care Act) highlights the challenges many of the newly insured will have in paying for coverage, even with the substantial subsidies available to those with lower incomes. The story leads off with the tale of a 28 year old with lymphatic cancer. She and her husband have a combined income of $25,000 but will have to pay $1000 or so in premiums plus out-of-pocket costs of a similar magnitude.

Bloomberg (Unaffordable Cost Seen for Some Under Affordable Care Act) highlights the challenges many of the newly insured will have in paying for coverage, even with the substantial subsidies available to those with lower incomes. The story leads off with the tale of a 28 year old with lymphatic cancer. She and her husband have a combined income of $25,000 but will have to pay $1000 or so in premiums plus out-of-pocket costs of a similar magnitude. They are understandably upset and the expenses will be a burden.

The unfortunate truth is that health care is so expensive in this country that there are not enough rich people to shift the costs onto. Premiums for my family exceed $20,000. You have to make a pretty good income to comfortably afford the full cost. From the article:

A family of four earning $75,000 will pay $7,125 in annual premiums and as much as $8,333 in co-pays and deductibles, according to a preliminary estimate by the Kaiser Family Foundation. A single 40-year-old earning $30,000 will pay $2,509 in premiums and as much as $3,125 in cost sharing. For a 60- year-old making $40,000, the amount will be $3,800 in premiums and up to $4,167 in out-of-pocket costs, according to Kaiser.

Although the article takes a somewhat alarmist tone, there is value in having the population as a whole gain some understanding of the real cost of health care. In aggregate health care is more expensive than food, rent, clothing or transportation, so it’s not unreasonable for a family budget to reflect that fact.

Ideally the increased awareness of the magnitude of health care costs will create a broad-based constituency that favors cost containment. Massachusetts is probably ahead of other states on this topic. With near-universal coverage in place Massachusetts residents are now facing the serious challenge of maintaining what we’ve achieved. The sooner that happens on a national level the better.