The Hidden Cost Chickens in Obamacare Coming Home to Roost

Labor unions have been reliable supporters of President Obama and his policies. Their support for Obamacare was critical to its passage in 2010. Yet they are continuing to learn that their members will be paying more for their healthcare, not less.

One of the selling points of Obamacare was the lowering of health insurance costs. Nancy Pelosi promised, “Everybody will have lower rates.” President Obama was more specific, telling us that his signature program would “Bring down premiums by $2,500 for the typical family.” A year later, however, Mrs. Pelosi, in the face of rising premiums for many, forgot her promise of the previous year, "I don't remember saying that everybody in the country would have a lower premium."

Mrs. Pelosi’s sudden bout of amnesia isn’t surprising. Health insurance premiums rose up to 56 percent under Obamacare and some of her constituents in California are paying over $2600 per month in premiums. But that isn’t the worst of it.

Premiums are just the opening salvo for consumers paying for health care. Paying the premium means you have insurance, but that doesn’t mean you can leave your wallet home when visiting the doctor or hospital.

It’s the hidden costs that will thin your wallet. Copays, deductibles, and coinsurance to be specific. Insurance behemoth Cigna reassures us that these added costs, “All work together to help reduce your medical expenses and protect your finances.” Really?

The copayment is a fixed amount, typically between $20-40, that you pay each time you access the healthcare system – physician visit, x-ray, laboratory, or hospital.

Coinsurance can take a bigger bite out of your wallet. It’s not a fixed cost, but instead a percentage of your bill. Once you meet your deductible (the third hidden cost), you may still have to pay anywhere from 10 to 30 percent of your medical bill based on your policy coinsurance percentage.

The largest hit on your wallet, however, is the deductible. It’s this amount that you pay in full before insurance pays anything. Family deductibles range from $6000 to $10,000 for the most popular silver and bronze Obamacare plans. Until meeting the deductible, you might as well be uninsured, paying cash for your medical care.

It’s not just the Obamacare exchange plans with high deductibles. In 2013, 17 percent of employers are providing high deductible plans as the only option for employees. This is a 31 percent increase from the previous year, and a trend that will likely continue.

United Healthcare believes a high deductible plan is, “A more economical way to help protect your health.” Economical for whom? It certainly is for United but how about for the family suddenly on the hook for ten grand after a family member needs surgery or a few days in the hospital?

Some policies have an out-of-pocket maximum, limiting the cash hemorrhage. But read the fine print. The maximum may not include prescription drug costs or may only include prescription drugs. Copays may still be in effect even above and beyond the out-of-pocket maximum.

Here’s a novel idea to take the bite out of the high deductible. Let individuals or families prepay their deductible with a prepayment discount. Let’s say I have a $6000 deductible for my family insurance plan. Let me pay $5000 on January 1 and for the year my deductible is met. I save $1000 by accepting the gamble that my healthcare costs will exceed my deductible amount for the year. If my costs are lower, I lose the bet. But the insurance company gets cash up front, and unless I get sick on January 2, will have the use of that money until I spend up to my deductible.

Most states offer prepaid college tuition plans under the same concept. Pay in advance to secure a lower tuition bill, but with the risk of losing the prepayment if your kid ends up not going to college or going out of state.

The bottom line is that the insurance hidden costs, while euphemistically described as cost sharing, serve only as a subtle way to ration care. Faced with a high deductible, many will forgo seeking medical care hoping their problem goes away. If it doesn’t, then the only option is a trip to the emergency room, where by law, care must be provided for any "emergency medical condition." And what a surprise, emergency room visits are increasing since Obamacare took effect.

Just as increasing income tax rates drives taxpayers toward loopholes, placing excessive cost burdens on the patient will incentivize poor decisions which ultimately increase costs for everyone.

Dr. Joondeph is a retina surgeon at Colorado Retina Associates and serves on the faculty of Rocky Vista University School of Medicine. Twitter @retinaldoctor.