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Obamacare trade-off: low premium, high deductible

  • FILE - In this Aug. 22, 2013, file photo, Health and Human Services Secretary Kathleen Sebelius speaks during an event discussing the federal health care overhaul in Philadelphia. With new health insurance markets launching next week, the Obama administration is unveiling premiums and plan choices for 36 states where the federal government is taking the lead to cover uninsured residents. The overview of premiums and plan choices, being released Sept. 25 by Sebelius, comes as the White House swings into full campaign mode to promote the benefits of the Affordable Care Act to a skeptical public. (AP Photo/Matt Rourke, File)

    FILE - In this Aug. 22, 2013, file photo, Health and Human Services Secretary Kathleen Sebelius speaks during an event discussing the federal health care overhaul in Philadelphia. With new health insurance markets launching next week, the Obama administration is unveiling premiums and plan choices for 36 states where the federal government is taking the lead to cover uninsured residents. The overview of premiums and plan choices, being released Sept. 25 by Sebelius, comes as the White House swings into full campaign mode to promote the benefits of the Affordable Care Act to a skeptical public. (AP Photo/Matt Rourke, File)

  • FILE - In this April 2, 2013 file photo, Washington Wizards head coach Randy Wittman directs his team in the first half of an NBA basketball game against the Chicago Bulls in Washington. The aim is pretty clear for Wall and the rest of the Washington Wizards: get to the postseason. Team president Ernie Grunfeld says so. As does coach Randy Wittman. Speaking at a joint news conference Wednesday, Grunfeld says, "Our initial goal is to be a playoff contender and, ultimately, by the end of the year, make the playoffs." Wittman adds, "We want to make the playoffs. ... And there's no reason why we can't."  Washington went 29-53 last season, missing out on the postseason for the fifth consecutive year.(AP Photo/Alex Brandon, File)

    FILE - In this April 2, 2013 file photo, Washington Wizards head coach Randy Wittman directs his team in the first half of an NBA basketball game against the Chicago Bulls in Washington. The aim is pretty clear for Wall and the rest of the Washington Wizards: get to the postseason. Team president Ernie Grunfeld says so. As does coach Randy Wittman. Speaking at a joint news conference Wednesday, Grunfeld says, "Our initial goal is to be a playoff contender and, ultimately, by the end of the year, make the playoffs." Wittman adds, "We want to make the playoffs. ... And there's no reason why we can't." Washington went 29-53 last season, missing out on the postseason for the fifth consecutive year.(AP Photo/Alex Brandon, File)

  • FILE - In this Aug. 22, 2013, file photo, Health and Human Services Secretary Kathleen Sebelius speaks during an event discussing the federal health care overhaul in Philadelphia. With new health insurance markets launching next week, the Obama administration is unveiling premiums and plan choices for 36 states where the federal government is taking the lead to cover uninsured residents. The overview of premiums and plan choices, being released Sept. 25 by Sebelius, comes as the White House swings into full campaign mode to promote the benefits of the Affordable Care Act to a skeptical public. (AP Photo/Matt Rourke, File)
  • FILE - In this April 2, 2013 file photo, Washington Wizards head coach Randy Wittman directs his team in the first half of an NBA basketball game against the Chicago Bulls in Washington. The aim is pretty clear for Wall and the rest of the Washington Wizards: get to the postseason. Team president Ernie Grunfeld says so. As does coach Randy Wittman. Speaking at a joint news conference Wednesday, Grunfeld says, "Our initial goal is to be a playoff contender and, ultimately, by the end of the year, make the playoffs." Wittman adds, "We want to make the playoffs. ... And there's no reason why we can't."  Washington went 29-53 last season, missing out on the postseason for the fifth consecutive year.(AP Photo/Alex Brandon, File)

You might be pleased with the low monthly premium for one of the new health insurance plans under President Obama’s overhaul, but the added expense of co-payments and deductibles could burn a hole in your wallet.

An independent analysis released yesterday, on the heels of an administration report emphasizing affordable premiums, is helping to fill out the bottom line for consumers.

The annual deductible for a mid-range “silver” plan averaged $2,550 in a sample of six states studied by Avalere Health, or more than twice the typical deductible in employer plans. A deductible is the amount consumers must pay each year before their plan starts picking up the bills.

Americans looking for a health plan in new state insurance markets that open next week will face a trade-off familiar to purchasers of automobile coverage: to keep your premiums manageable, you agree to pay a bigger chunk of the repair bill if you get in a crash. Except that unlike an auto accident, serious illness is often not a self-contained event.

Avalere also found that the new plans will require patients to pay a hefty share of the cost – 40 percent on average – for certain pricey drugs, such as the newer specialty medications used to treat intractable chronic diseases. On the other hand, preventive care will be free of charge to the patient.

“Consumers will need to balance lower monthly premiums against the potential for unpredictable, expensive out-of-pocket costs in plans with higher deductibles,” said Caroline Pearson, a vice president of the private market analysis firm. “There is a risk that patients could forgo needed care when faced with high up-front deductibles.”

Responding to the Avalere study, the Obama administration acknowledged the new plans aren’t as generous as employer coverage, but it said they nonetheless represent a big improvement over currently available individual policies, which can have gaps in coverage and even larger out-of-pocket costs.

Also yesterday, the administration unveiled premiums and plan choices for 36 states where the federal government is taking the lead to cover uninsured residents. Insurance markets that go live Tuesday will offer subsidized private coverage to people who do not have health insurance on the job, including the uninsured and those who currently buy their own policies.

Before new tax credits that work like a discount for most consumers, premiums for a mid-range “silver” benchmark plan will average $328 a month nationally for an individual, the administration report found. Beneath that average are wide differences for individuals, depending on where they live, how much they make and other factors.

Health and Human Services Secretary Kathleen Sebelius said the typical consumer will be able to choose among more than 50 plan options.

“For millions of Americans, these new options will finally make health insurance work within their budgets,” Sebelius told reporters in a preview call Tuesday. The markets – called “exchanges” in some states – are the only place where consumers will be able to get a tax credit for health insurance.

DHHS estimated that about 95 percent of consumers will have two or more insurers to choose from. And the administration said premiums will generally be lower than what congressional budget experts estimated when the legislation was being debated. About one-fourth of the insurers participating are new to the individual coverage market, a sign that could be good for competition.

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