Health insurance that you can’t use is useless

What good is health insurance coverage if you can’t afford to actually use it?

Unfortunately, that’s not a rhetorical question. It’s one facing thousands of Nevadans who are required to purchase health insurance on the Affordable Care Act’s exchanges. As if rising premiums — which increased by an average of 8.4 percent in Nevada this year — weren’t already hard enough to stomach, skyrocketing deductibles have rendered many plans “all but useless,” according to a recent report in The New York Times.

And as a new analysis from Freedom Partners Chamber of Commerce shows, it’s only getting worse.

While premiums are what it costs to have insurance, deductibles are what it costs to use it. Especially for low- and middle-income families, these out-of-pocket costs are placing affordable health care further out of reach.

Freedom Partners recently completed an analysis of deductibles across the country, including Nevada. Relying on data from the Robert Wood Johnson Foundation and the federal agency overseeing the Affordable Care Act, we calculated weighted average deductibles by enrollment across gold, silver, and bronze insurance plans.

The short version: It’s not good.

All three metal categories increased by an average of $268, or 14 percent, in Nevada this year. Silver plans — which with 40,000 enrollees are the most popular in the state — now have deductibles averaging $2,848, while bronze plan deductibles average $5,790.

In other words, the 51,000 Nevadans with bronze and silver plans will have to pay between $2,848 and $5,790 before their health insurance coverage kicks in.

That’s not an option for many families. A December survey by Bankrate.com found only 37 percent of Americans have the savings to pay for an unexpected expense of even $1,000. Others said they’d add it to credit cards, borrow from family or friends, or slash spending from other areas of their budget.

What’s more, insurance premiums are increasing at the same time. A similar analysis by Freedom Partners found premiums for individual exchange plans increased by the aforementioned average of 8.4 percent in Nevada this year. So not only is it more expensive to purchase insurance, but it’s also more expensive to use it.

And there’s the real rub of health insurance under the Affordable Care Act. Consumers have increasingly fewer options and control over how they spend their health care dollars. Instead, they’re forced to purchase insurance policies from government exchanges whose premiums they cannot afford, and whose deductibles limit their use.

It’s important to note that higher premiums are not bad by themselves. And some Nevadans may actually prefer high-deductible plans as a way to lower their premiums up front, or to assume more responsibility for their costs as they need it. But as we’re seeing, the Affordable Care Act is denying consumers those choices — forcing them to pay higher costs all the way around.

While some may instinctively blame insurance companies for these rising costs — after all, they’re the ones mailing the bills — they’re losing money, too. UnitedHealth, one of the nation’s largest insurers, has announced losses of nearly $1 billion in 2015 and 2016 on the exchanges. The outlook is so bad that UnitedHealth and other insurers are even considering leaving the exchanges altogether next year, which may result in millions of canceled plans.

These higher costs are the result of a one-size-fits-all federal health care law that treats all patients as if they were the same. First, it was millions of canceled plans. Then, it was — and still is — higher premiums. Now it’s sky-high deductibles making health insurance too expensive to use.

It’s always something else with the Affordable Care Act. Unfortunately for Nevadans, it’s higher costs and fewer choices.

Nathan Nascimento is director of state initiatives at Freedom Partners Chamber of Commerce.