The hidden cost of having health insurance

U.S. News & World Report is out with its annual index on health insurance and its impact on the economy. To the surprise of few, many of the costs are declining or at least not rising at the dizzying pace they had been.

But much of those savings are going into the pockets of businesses and insurance companies, with consumers picking up an increasing share of out-of-pocket expenses because many companies are going to higher deductible plans to offset hikes in premiums. That, according to new studies, is actually making people sicker because they cannot afford or don’t want to pay the thousands of dollars required for visits or higher drug co-pays.

According to the U.S. News index, the biggest spikes in health care costs since 2002 are in deductibles followed by expenditures, for things such as higher prescription and office visit copays. According to the Kaiser Family Foundation, the number of workers in plans that have a $1,000 or higher deductible has risen 80 percent since 2006, with more than 40 percent of employees now enrolled in a high deductible plan. For those who work in a small business with less than 200 employees, the rate is even higher, with 61 percent of workers in such a plan, up from 16 percent in 2006.

For most American workers, the passage of the Affordable Care Act was good news and bad news. Many more now have access to insurance. But while premiums have risen only 3 percent in recent years, the shifting of the cost burden through deductibles, coinsurance, and copays has heaped a heavier burden on those who buy the insurance, especially families in low-income and blue-collar jobs such as construction or trades. Between 2000 and 2013, out-of-pocket expenses by consumers nearly doubled to $1,217 per person, with the biggest jump coming after the Great Recession in 2009.

But the unseen cost appears to be in the health of those insured. In Massachusetts, minimum creditable coverage mandates that deductibles are capped at $2,000 for individuals and $4,000 for families. But the federal government more than triples that ceiling, with a $6,600 cap on individuals and more than $13,000 for families. Regulators and health plans posit that higher out-of-pocket expenses force consumers to make more prudent choices in accessing health care. In practice, subscribers are avoiding many necessary treatments and drugs rather than pay for them out-of-pocket.

Studies have found higher expenses result in sicker consumers who don’t get treatment or necessary drugs and that, in turn, begets higher costs because of more serious illnesses that require emergency room visits and hospitalizations. The biggest hit seems to be on seniors and those covered by Medicare. In 2005, Congress passed the Prescription Drug Act, which shifted more of the burden for the cost of drugs onto patients. In addition to higher drug payments, expenses for things such as specialist services, dental, and home care have risen starkly. With the Baby Boomer generation ready to bust down the Medicare door, the problem could only be exacerbated.

But the problem clearly isn’t limited by age or income. Part of the formula for getting everyone covered is for health plans to get everyone into the pool and the way they do that is through lower premiums. And the way to lower premiums is through higher deductibles.The plans calculate that younger, healthier workers will be attracted to the lower premium and not pay attention to what it may cost them if they actually get sick.

It is a cost that is hiding in plain sight.




The state will take over management of a much-maligned program that houses homeless families in motels across the state after the private non-profit that oversaw the program declined to renew its contract. (Patriot Ledger)

Every dollar the state gives away in tax credits to life sciences companies, film projects, or other favored industries is a dollar we don’t have to fix the MBTA or fund struggling schools, says Charles Chieppo. (Boston Globe)

The Worcester Housing Authority, with the backing of the Baker administration, requires families living in state-subsidized apartments to work or attend school in order to stay in their units. (Telegram & Gazette)

David Bernstein urges Massachusetts to get rid of the House of Representatives. (Boston Magazine)


The company that owns the Brockton Rox baseball team and runs the stadium and a nearby conference center is asking the city for a full-time liquor license even though it owes more than a half-million dollars in unpaid taxes, water, and utility bills. (The Enterprise)

Dracut Selectman Cathy Richardson pleads not guilty to five charges of animal cruelty and seeks a change of venue because of all the publicity about the case. (The Sun)

Salem is moving to sever ties with its trash hauler, Northside Carting, because of poor service. (Salem News)

Roxbury residents express concern and support for the Boston Olympics bid. (Bay State Banner)


A Boston lawyer finds a treasure trove of information on the back-room dealings by Olympic organizers and supporters and posts scores of emails and documents related to the bid that he got through a public records request. (Boston Magazine)


A 126-page marketing analysis claims a casino in Somerset would be “a sure thing” for success, even though the developers have yet to submit an application and have requested three extensions. (Herald News)


Alabama officials, who have long resisted any attempts at legalized gambling, are pondering a state lottery as well as an offer from an Indian tribe to pay for a $260 million budget gap in exchange for the rights to open three casinos. (New York Times)


Attorney General Maura Healey will defend the constitutionality of a state law that bans knowingly lying in campaign material, a case that is sure to raise basic First Amendment issues. (Boston Globe)


Synageva BioPharma, a Lexington-based biotech company focused on treatments for rare diseases but which has no products, was acquired for more than $8 billion, a staggering figure for a small company that the Globe reports many in the industry — and in the town where it’s based — had never heard of.

The long-awaited NFL report on “Deflategate” concludes that Patriots employees probably cheated and said there was “substantial and credible evidence” that star quarterback Tom Brady was aware of the shenanigans — something he has denied. (Boston Globe) The Herald‘s Jeff Howe pours cold water on the report, which he finds less than convincing. Dan Shaughnessy, not generally one for hometown wagon-circling, stays true to form, writing: “Bend yourself into a pretzel if you must, but Brady and the Patriots are insulting your intelligence if they want you to believe that they were not aware of what was happening to the footballs on game days.”

Tom May, the chief executive of Eversource Energy, retained his seat on the Bank of America board, despite a recommendation by some firms that advise shareholders to oust him. (Boston Globe)

John Fish hands off the baton to a new chairman of the Greater Boston Chamber of Commerce, but in his farewell remarks to the group makes no mention of the Boston 2024 Olympics bid that prompted his departure from the post a year ahead of schedule. (Boston Globe)

Medical device tax repeal supporters are miffed that Sen. Elizabeth Warren, who supports the measure, isn’t speaking out about it. (Boston Business Journal)


A search committee announces three finalists for state commissioner of higher education. (Boston Globe)

The principal of Andover High School, appointed permanently to the job just two months ago, is leaving to take the same post at Chelmsford High School. (Eagle-Tribune)

A dispute is simmering between members of the UMass Dartmouth community and Swansea police after a function hall canceled a planned party following a fundraiser by the school’s African Student Association. The event was canceled when police informed the managers they believed there was the possibility of a gang-related incident. (Herald News)


Gov. Charlie Baker seeks a reprieve from some of the small business provisions of the federal Affordable Care Act. (State House News)

A new study shows a small number of premature babies born at 22 weeks, a week or two younger than previously believed to be the outer limit of viability, can survive with relatively few health problems. (New York Times)


Former transportation secretary Jim Aloisi says the proposal for a control board to take over management of the MBTA is an unnecessary distraction from the system’s need for strong leadership, more revenue to address the longstanding needs, and a commitment to “modal equity” that doesn’t leave lower-income riders behind. (CommonWealth)

Seattle launches a two-tier pricing structure that offers lower rates to low-income riders. Massachusetts officials have floated taking a similar approach at the T. (Governing)

Despite improvements over the last 25 years, American airports still lag behind international terminals when it comes to amenities for travellers such as golf driving ranges, art galleries, gardens, and even movie theaters. (New York Times)

Former MBTA GM Beverly Scott tells the Bay State Banner that the state’s transportation agencies need to invest in some better planning strategies.


After the winter from Hell, Keller@Large says anyone complaining about the heat will have to listen to him complaining about them, though it’s unclear who or where those people may be.


A Suffolk Superior Court judge’s 67-page ruling that orders a new trial in the case of Sean Ellis, convicted of the 1993 murder of a Boston police detective, says the case is riddled with problems resulting from police corruption and prosecutorial misconduct. (Boston Globe)

A former Registry of Motor Vehicles worker already under indictment for shaking down inspection station owners in five South Shore communities has been charged with more counts of extorting payments from another owner in Stoughton. (Patriot Ledger)

A prosecutor said that former street preacher and English High School staffer Shaun Harrison shot a 17-year-old student at the school in the head because he was dissatisfied with the teen’s marijuana sales level in an enterprise Harrison was directing. Harrison pleaded not guilty to all 10 charges read against him in court, including assault with intent to murder. (Boston Herald)

A former elementary school teacher in Somerville and Cambridge is convicted of child pornography charges. (Associated Press)


Jim Normandin, publisher of the Worcester Telegram & Gazette, touts new designs for the newspaper and its website while lamenting the departure of “several employees.” He says the paper is now being designed in Austin, Texas, but the T&G story on his remarks never details the extent of the staff cuts. One of those staff cuts is Chris Sinacola, who is being replaced as editor of the editorial page by Anthony Simollardes, who has been director of readership and circulation the last 15 years. The newspaper’s cartoonist, David Hitch, will be leaving in July. Masslive, which has been trying to make inroads in Worcester, offers some details on the layoffs. The Telegram & Gazette is now on its second owner since John Henry, the owner of the Boston Globe, sold the Worcester newspaper after telling the staff he would find a local buyer or keep it himself.

Boston Globe Media is getting ready to launch yet another dedicated website, this one focusing on life sciences, and this effort could include a print version. (Poynter)

UMass Amherst journalism students get together with Springfield High School of Commerce students to talk about the Baltimore riots. (MassLive)