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Sara Foss's Thinking It Through
by Sara Foss

Thinking It Through

A Daily Gazette life blog
Her column and blog rolled into one

Where is health coverage savings?

Last fall I asked readers to contact me and tell me about their experiences buying health insurance on the new state exchange.

A number of readers reached out to me, and one of them, a Saratoga County woman in her early 50s, has kept in touch.

In a recent email, she informed me that she has received a letter from her insurance company, CDPHP, stating that they are asking for a 7.7 percent increase in her premium rate for 2015.

“Just barely into six months and already an increase!” she wrote. “Guess that’s how it will go from now on.”

Insurance rates go up every year, and next year will be no different.

But one of Obamacare’s selling points was affordability — it was supposed to slow long-term growth in health care spending, making big annual hikes in health insurance premiums a thing of the past.

And right now the rate increases — for all plans — proposed for 2015 in New York look high.

MVP Health Care of Schenectady is proposing an average increase of 17 percent. Albany-based CDPHP is requesting an average increase of 14.5 percent for small group plans and an average increase of 9.5 percent for individual plans. Viewed in this context, the 7.7 percent rate increase my Saratoga County reader is facing doesn’t look so bad.

But for many people, it would be a lot to absorb.

And it only appears reasonable when compared to the double-digit increases many other customers could be facing. If the proposed rate hikes make anything clear, it’s that the cost of health insurance continues to rise faster — much faster — than wages.

Perhaps this explains why my Saratoga County reader sounded worried when I caught up with her on the phone last week.

She said she was happy with the plan she purchased under Obamacare, but she was worried about next year.

“It’s been workable,” she said. “I haven’t had any major health crises, but who knows what the future will bring. ... I’m worried that [the rate increase] is the tip of the iceberg, that they can change anything.”

Just how much will change remains to be seen.

All of the rate increases proposed for 2015 will be reviewed by the state Department of Financial Services, which has the power to reject rate increases it deems too high. And, like many people, my reader doesn’t pay the full cost of her health insurance plan because she qualifies for a federal subsidy, which is designed to reduce costs for lower-income customers. She pays $267.12 each month for her health insurance, which carries a sticker price of $458 a month.

One of her concerns, she said, is that the subsidy will change — that it will be lower — and she’ll end up paying more out of pocket in 2015. Right now, she pays a $35 co-payment to see a specialist — what if that were to increase to $50? And her prescription drugs are very cheap — what if they aren’t so cheap next year?

“I’m not a high-risk patient,” she said. “But it’s still costly when you add it all up.”

She’s not the only one feeling this way.

Most people have seen their out-of-pocket health expenses increase in recent years, as premiums have risen and more employers have switched to high-deductible insurance plans.

And while it’s true that more people are insured under Obamacare, I’m unconvinced that health care is becoming more affordable, and the reason for this is fairly simple: The costs keep rising. They might not be rising as much as they have in the past, but they’re still going up. And as long as they keep going up, my reader is right to wonder whether the plan she currently has will become too expensive, forcing her to switch to a cheaper plan that doesn’t cover as much.

It’s easy to criticize insurance companies, and I do it often. But one thing that is seldom mentioned is just how much health care costs.

For example: A new drug that can cure hepatitis C has just come on the market. Called Sovaldi, it costs $1,000 a pill, and treatment can run to $90,000. I’m sorry, but the money for Sovaldi is not going to fall from the sky. Everyone who has insurance is going to pay for it, regardless of whether or not they have hepatitis C.

I’ll be interested to hear from my Saratoga County reader again and learn about her health-care plan for 2015. When I spoke with her, she expressed frustration with the process and the uncertainty surrounding cost and benefits.

Which I don’t think is unusual. Because if there’s one thing that’s certain when it comes to health care, it’s that the prices will keep rising and the rates will keep climbing.

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June 29, 2014
12:10 p.m.

[ Flag Post ]

Ironically, if MVP is proposing an average rate increase of 17 percent, that's definitely a measure of relief for at least some MVP subscribers. I left their Medicare Advantage plan at the end of last year when they proposed their latest increase -- 24 percent. In three years, my rate increased 108 percent, or an average of 36 percent a year. In short, the monthly rate went from $114.40 in 2011 to $238 in 2014.

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