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The Rise of Useless Health Insurance

What is the point of having health insurance that you can’t use?

This is the question raised by high-deductible health plans, which are becoming increasingly common. According to the Kaiser Family Foundation, deductibles have increased eight times faster than wages since 2008, increasing to an average of $1,573. Almost half of people with employer-based coverage have a high-deductible plan, defined as $1,300 for single people and $2,600 for family coverage.

The fact that the average deductible is higher than that “high-deductible” definition should tell you, the Math Knower, that there’s a significant chunk of people whose deductibles are far higher than that—like this person profiled by NPR today, whose deductible is $6,000. After learning that she had a genetic mutation that predisposes her to breast cancer, she decided to get regular mammograms, but found that her insurance didn’t cover much:

Susan went in for her first mammogram and MRI in February 2017. Her out-of-pocket cost for the MRI was more than $2,000. The bill for her mammogram was $1,088 (although she was eventually able to appeal and have the charges for the mammogram reduced to $191).

As a result of the high bill, Susan decided to put off her 2018 annual screenings until she had dealt with paying off the bills from 2017.

Susan had insurance from her employer, for whom she’d worked for 17 years. Recall that the industry opponents of Medicare for All, the Partnership for America’s Health Care Future, frequently cites the apparent success and superior quality of employer-based insurance as a reason why Medicare for All is doomed.

Remember also that 58 percent of Americans have less than $1,000 in savings. These figures are much worse for people of color: Black people are twice as likely as white people to have a negative net worth, and the median checking account balance for black people was just $1,160 and $1,500 for Hispanic people in 2016, meaning half of them have less than that.

Again: What is the point of health insurance that you can’t use? The premise of insurance is that if you pay premiums now, you’ll avoid high charges in the future; insurance companies afford the high payouts for the sickest people by taking in premiums from healthy people who rarely use their plans. But this doesn’t work for you if your “deductible,” a thing that should in no way exist, prevents you from actually using the care you paid for. A deductible is simply an arbitrary way for your insurer to say, “We’re not gonna pay for these costs that should already be covered by your plan because we don’t want to.”

It also doesn’t work if healthcare is completely inaccessible if you don’t have insurance. The cost of healthcare is so astronomical, with tests costing thousands of dollars and treatment costing tens of thousands, that no one except the absolute wealthiest people in the country could access it paying cash. This means you have to have insurance if you don’t want to die broke, because everyone needs care at some point, and no one can be sure they won’t get cancer or get hit by a bus. (Many people can’t even afford that basic step.) If your employer offers insurance, you are stuck with the options they give you, which increasingly might mean high deductibles; if they don’t, you’re stuck using the marketplace, where even silver plans might have a $4,000 deductible. You can’t walk away from these options without risking your life.

None of this makes any sense. None of this is a good way to provide access to healthcare, let alone health insurance coverage. All of this is determined by the logic of what enables health insurance companies to continue to reap astronomical profits, what permits healthcare providers to keep charging high fees, and what allows drug companies to keep charging absurd amounts for drugs. It is not determined by the logic of what provides the best care to everyone.

When someone tells you that Medicare for All is too big a risk, ask them: Is a system in which millions of people might have to fork up $6,000 before they can receive treatment for cancer not already “risky?”

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