story by Kim Souza
The impact of health coverage through Obamacare was touted as a way to cap rising insurance costs and provide benefits to the masses of uninsured. But as 2014 gets under way many Americans are finding that is not exactly the case.
Doug Whiteman, insurance analyst for Bankrate.com, said it is easy to forget that 150 million Americans get their insurance from their employer. In many cases these employer sponsored plans have escalated in price as they assume the risks for the insured and those without coverage.
A recent study by Bankrate.com found that 47% of Americans with employer-based health insurance report more money is being taken out of their paychecks each month for health insurance than a year ago. In addition, 44% said they are experiencing higher out-of-pocket expenses, including deductibles and copayments, compared to one year ago.
SQUEEZING THE MIDDLE
Upper-middle-income Americans with employer-based health insurance (annual household incomes between $50,000 and $74,999) are the most likely to report more money being taken from their paychecks and higher out-of-pocket expenses, Whiteman notes.
He said it is this middle-income group that has been the hardest hit by Obamacare. Out of all income levels, they are the most likely to feel that the law has negatively impacted their health insurance.
John and Jamie Smith of Elkins said their employer-sponsored medical insurance costs doubled last year in anticipation of the new law. The Smiths are in their 30s. Arvin and Carol Johnson, a retired couple in Howard, Colo., said their private supplemental policy premiums increased this year, but they are still happy with the coverage. Robby and Marna Robertson, school administrators in south Texas, said their insurance premiums rose this year and they were told to expect higher costs in 2015.
While many feared losing family coverage as a result of the Affordable Care Act, few employers have taken this step – less than one in 10 Americans with employer-based health insurance lost coverage for a spouse or child this year. And only two in 10 Americans with employer-based health insurance now have fewer doctors included in their plans, according to Bankrate.com.
“People covered under these employed-based plans should watch for changes and discuss with their employers how Obamacare may affect their coverage and costs. In some cases, getting insurance through the health exchanges could be more cost–effective, so it is important to research all possibilities,” Whiteman said.
A recent CNBC report highlighted some unintended consequences for small businesses and their employees trying to comply with the Obamacare law.
Wesley Lutz, owner of Extreme Dodge in Jackson, Mich., told CNBC on Dec. 30 that he employs 41 people and though he is under no obligation to provide health insurance he has done it for 35 years, picking up 70% of the costs. This year he opted to give each employee $2,400 which they could spend acquiring their own insurance through the exchange marketplace. If they opted to go without coverage, the $2,400 could be used to cover out-of-pocket costs. He said the $2,400 per employee was slightly more than the company paid last year on coverage for the individuals.
He said a few employee came out winners in this move. They were the lower income workers who qualified for subsidies to offset their premiums through an exchange.
Lutz said of the 26 employees who had coverage under the company plan last year, 21 signed on for coverage through exchanges, but their deductibles will rise from $1,125 this year to $3,000 new year and maximum out-of-pocket costs jump from $2,250 to $6,350.
Four of the Lutz’s younger workers opted to keep the $2,400, pay the penalty and go without insurance for now. Experts say this "opt out" by the younger generation is partially responsible for the higher costs of those seeking insurance through the exchanges. Lutz said some older employees were facing costs they simply could not afford, an intended consequence from Obamacare.
“I will continue to do my part to help my employees who need and want health coverage, but this law is not what anyone thought it would be,” Lutz said during the recent CNCB interview.
The Bankrate.com survey found 52% of females with employers-based coverage faced higher out-of-pocket costs, compared to 35% of males.
Some 48% of Americans now want to repeal Obamacare, while 38% want to keep it. When Bankrate.com last asked the same question in September, 46% wanted to see the law repealed and 46% favored it.