In tiny Marion, North Carolina, the Buchanans decided that $1,800 a month was too much to pay for health insurance, and are going without it for the first time in their lives.
In Harahan, one bend of the Mississippi River up from New Orleans, the Owenses looked at their doubling insurance premiums and decided no, as well. “We’re not poor people but we can’t afford health insurance,” Mimi Owens said.
And in a Phoenix suburb, the Bobbies and their son Joey will go uninsured so the family can save money to cover their nine-year-old daughter Sophia, who was born with five heart defects.
Across America there are thousands of people like the Buchanans, the Owenses and the Bobbies making the same hard decision to go without health insurance, despite the benefits. They’re risking it—betting that they’ve got enough savings, enough of a back-up plan, or enough luck to get them through a twisted knee, a cancer, or a car wreck.
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Bloomberg is following a dozen of these families this year in an effort to understand the trade-offs when a dollar spent on health insurance can’t be spent on something else. Some are financially comfortable. Others are scraping by.
While the share of Americans without health insurance is near historic lows four years after the Affordable Care Act extended coverage to almost 20 million people, the Trump administration has been rolling back parts of the law. At the same time, the cost for many people to buy a health plan—if they don’t get it from a job or the government—is higher than ever.
No one had to tell the Buchanans about the risk. Dianna, 51, survived a bout with cancer 15 years ago. Keith, 48, has high blood pressure and takes testosterone shots. They live in Marion, North Carolina, and make more than $127,000 a year from the small IT business Keith runs and Dianna’s job as a physical therapy assistant, with some additional income from properties they own. That puts them in the top fifth of households by income.
But their insurance premium was $1,691 a month last year, triple their mortgage payment—and was going up to $1,813 this year. They also had a $5,000 per-person deductible, meaning that having and using their coverage could cost more than $30,000.
What sealed the deal was when Blue Cross and Blue Shield of North Carolina and the major hospital system in Asheville, Mission Health, couldn’t reach an agreement, putting the hospital out of network. Keith Buchanan compared the fight to a cable company battling with a broadcaster over what channels to carry.
“It was just two greed monsters fighting over money,” he said. “They’re both doing well, and the patients are the ones that come up short.”
Blue Cross and the hospital eventually made a deal, but enough was enough for the Buchanans. Instead of insurance, they’re paying $198 a month for membership in a local doctors’ practice. They get unlimited office visits and discounts on medications and lab tests. They also signed up for Liberty Health Share, a Christian group that pools members’ money to help pay for medical costs. Liberty costs $450 a month, including a $150 surcharge based on the couple’s blood pressure and weight.
Three days after dropping their Blue Cross coverage at the start of the year, Keith took a wrong step and injured his knee.
It could have been worse. He got it checked out at an urgent care center, where the visit and an X-ray cost him $511. That’s still less than he was paying in premiums to Blue Cross.
“If we can control our health care costs for a couple of years, the difference that makes on our household income is phenomenal,” Buchanan said. The couple doesn’t have children.
Subsidies, Premiums and Out-of-Pocket Costs
There’s plenty of evidence that having insurance is a good thing. People with health coverage spend less out of pocket on medical care and are less likely to go bankrupt. They see the doctor more often and get more preventive care. They’re less depressed and tell researchers they feel healthier. Some studies suggest having insurance reduces the likelihood of death.
Despite those benefits, some 27.5 million Americans under age 65 were uninsured in 2016, about 10% of that population, according to the Kaiser Family Foundation. The most common reason: the cost was too high. A Gallup poll suggests that, after declining for years, the percentage of adults without coverage has increased slightly since the end of 2016, when President Donald Trump was elected promised to dismantle Obamacare. Other data show no significant change.
The Affordable Care Act wasn’t just an expansion of insurance coverage. It also rearranged how Americans’ medical costs are distributed, favoring some and asking others to pay more.
People near the poverty line got Medicaid for free, while those making more—up to about $100,000 for a family of four—got subsidies to lower the price of private health plans.
Above that threshold, people pay the entire price. Because the law barred insurance companies from charging sick people more or refusing to cover them entirely, costs for healthy people went up as well. Some insurers have left the market, while others have sharply raised premiums to compensate for actions taken by Congress and the administration to weaken the law.