This year the cost of Obamacare for someone my age living in my North Texas county is roughly $10,000 for a $10,000 deductible. That means I would pay premiums of just over $800 a month in return for coverage that would cover nothing unless my health needs exceed $800 a month for the entire year. Assuming I spent more than $10,000 during the coverage period, the ACA plan would cover only $0.60 cents of every dollar I spend above my deductible.
Who would accept a deal like this? As Democrats point out, primarily it would be someone getting a generous subsidy bringing their cost of coverage down to, say, $400 or $200 a month. Poor health status would boost demand. Risk aversion would increase demand. A perceived desire for more medical care than average would likely increase demand. These reasons are not mutually exclusive, however. Nor are they necessarily the only strategy to fund one’s medical needs. Perhaps someone in good health may decide $10,000 a year is money down a rathole. Or maybe they have a nagging chronic condition but decide to spend their premium dollars on actual medical care rather than medical insurance. A person could decide to spend part of that $800 a month on direct primary care or a concierge medical practice. They may prefer alternative medicine that conventional health insurance does not cover.
By contrast, some people in my shoes prefer to pay $20,000 a year on premiums for a Gold Plan and go to the doctor with little forethought or cost sharing. Preferences differ among people. This is significant because the Trump Administration is proposing to allow much higher deductibles to make ACA plans more affordable. The following is from the New York Times:
The Trump administration is proposing Obamacare plans that it says will lower health insurance premiums. But critics warn they would make care unaffordable.
Dr. Oz’s new proposal would allow one kind of health plan to raise the annual deductible to more than $15,000 for an individual and $31,000 for a family; those are much higher than current Obamacare plans. The individual deductible would be eight times the average for someone with job-based insurance.
In 2025 about 13% of enrollees chose a Gold Plan, 56% a Silver Plan, while 30% chose Bronze. Only half of 1% chose platinum, double the proportion who chose a catastrophic plan. These figures are skewed by subsidies. Higher premiums due to lower subsidies in 2026 pushed more people to higher deductibles and higher cost sharing.
It is not clear how much a $15,000 deductible would lower premiums. Would they fall from $800 a month to $500? Or maybe $400? Unless they fell a lot it is hard to imagine there being a market for this type of plan considering only about one quarter of 1% chose catastrophic plans in 2025. More from NYT:
Many policy experts expressed doubt that the administration’s proposal would reduce the high cost of health care. “Nobody wants that product,” said Amitabh Chandra, a Harvard health economist who has studied high-deductible plans. “It’s going to be a really cheap product that nobody wants.”
I must disagree with some of what Dr. Chandra said. I doubt if it will be a really cheap product. The reason health coverage is extremely expensive for substandard coverage is due to ACA regulations that prevent insurers from offering plans that meet Americans’ needs. Rather than allow consumers to buy a truly affordable health plan that has annual and lifetime limits on benefits, all plans must pay for multimillion dollar drug therapies but not cover the routine care most of us need.
One problem with pushing deductibles to the stratosphere is that patients need the tools to compare prices and select the facilities offering the best deals. Patients need the knowledge of how to shop for medical care. Hospitals and clinics need to provide clear price estimates at the risk of not getting paid. The key to achieving all these things is incentives that make it too painful for doctors, hospitals, clinics, and patients not to behave in beneficial ways.
Read more at New York Times: New A.C.A. Plans Could Increase Family Deductibles to $31,000
A 60-year-old in Dallas pays $1,023 a month for a $10,000 deductible with Blue Cross HMO, which pays NOTHING if you go to MD Anderson Cancer Hospital, voted by Newsweek as the world’s best cancer hospital. We can’t compare Trump’s Short-Term Medical (STM) because it isn’t available in Texas. Moron Dr. Goodman said the real market is in STM, but that is stupid. He also claimed he advised all three GOP presidential candidates in 2024, which explains why none mentioned health insurance. The buffoon is totally senile.
I’m not discussing anything with you anymore because you are irrelevant and a goofball. For your reference, a 60-year-old Nashville male on STM from Allstate with a $10,000 deductible costs $441 monthly, and MD Anderson is a member hospital. A female would be $403 or 10% less.
Blue Cross of Texas declined 30% of all in-network claims in 2024, which is quite bad, and its 2026 rate increase was 39%. If the Allstate female wants a 36-month rate lock, her premium would rise to $500.23 per month. If she opts for a $25,000 deductible with a 3-year rate lock, the premium would be $383 per month.
The 2027 Obamacare deductibles are already set at $12,000, so Dr. Oz raising them to $15,000 is pointless since they were going to that level anyway by 2029.
The real story is that the state of Indiana charges a 30-year-old single parent state employee $864 monthly for employer-based insurance. The full-time employee pays $864 per month, and the taxpayers cover $2,319, totaling $3,183 each month. Trump’s low-cost plan for a 30-year-old Nashville woman and her child costs $1,386 [annually] from Allstate—that’s $115 per month! The state is paying 28 times more!
An important insurance concept that you refuse to discuss, the Indiana State single-parent employee pays $864 monthly for insurance. When she gets ovarian cancer and becomes too ill to work, federal COBRA law makes her pay the entire $3,108 monthly premium plus 2%, or $3,170 for 18 months, and then the premium increases to $4,662 on the 19th month. Blue Cross knows it is impossible for this bald-headed, cancerous mother to pay with no income. When she cannot pay, Blue Cross will terminate her insurance and eliminate its financial responsibility. It’s brutal, it’s legalized murder.
No one writes here anymore because you my friend are worthless propaganda!
My knees really start knocking when you turn on the charm, Ron.
But as susual, you raise some interesting points.
The Allstate plans are underwritten and they are short term. This enables the insurer to avoid most of the people who have seen a doctor for cancer and are thus most likely to have an expensive event coming up soon.
And even if they do start treatment for cancer, the insurer can refuse to renew them after 12 months.
The original design of Obamacare was that the cancer patients would be accepted and their costs would be super-high…..but the other 97% would be healthy and this would keep the average premiums down.
A historian of Obamacare, say a Jon Gruber, should write about this.