Yahoo Finance reporter Adriana Belmonte explains why health insurance deductibles and premiums are eating up a larger share of U.S. households’ incomes.
ALEXIS CHRISTOFOROUS: A new report from the Commonwealth Fund found that in 37 states, workers’ health insurance premiums and deductibles eat up at least 10% of a worker’s median income. Here to discuss more of the findings in that report is Yahoo Finance’s Editor Adriana Belmonte. Adriana, good to see you. I mean, that’s kind of alarming, 10% or more. What else did you find?
ADRIANA BELMONTE: So this report looked at a percentage of median incomes in 2020. And it found that premiums and deductibles combined in 37 states took up more than 10% of median income. And, on average, it was 11.6% of median income. And just for context, to qualify for ACA subsidy, you’re not supposed to– or they’re supposed to keep you from making– sorry, from your health care taking up more than 8.5% of your income. So the fact that this is happening is just crazy.
– And then, Adriana, I want to ask you, what are some of the states with some of the highest premiums and deductibles?
ADRIANA BELMONTE: Yeah, so I have right here, South Carolina, they play the most for single person premiums, $1,895. In Florida, they pay the most for family premiums at $7,674. And then for deductibles, Montana pays the most at $2,517. And then on the other end, Hawaii pays the least in both premiums and deductibles.
ALEXIS CHRISTOFOROUS: So what are some of the things that are driving these costs up? I mean, we know that health care in general is more expensive. We had the Cigna CEO on earlier talking about higher drug prices. But what specifically is driving these costs higher?
ADRIANA BELMONTE: Yes, I talked to a few experts, including one of the authors of the report. And they were explaining that the overall cost of care is just going up in general. And part of that is the fact that when hospital fees, when those go up, for Medicare, people on Medicare, they pay less because Medicare is able to negotiate those fees. But private insurers and employers, particularly, they’re not able to negotiate these rates because they have limited market power. So as a result, that kind of trickles down into premiums and deductibles for consumers.
– So then what are some of the things that individuals can try and do to help bring down the health care costs that they see?
ADRIANA BELMONTE: Well, that’s a big question, because especially with deductibles, you know, when these things are high, it’s a disincentive to seek care. So a lot of times, what people do to try to avoid having to take on these costs is they avoid medical care in general. But we’ve seen what that can do. That can lead to problems down the road when you miss preventative doctor’s visits and things like that.
ALEXIS CHRISTOFOROUS: All right, Adriana Belmonte, thanks so much for breaking that down for us. I think everybody is dealing with higher prices for just about everything, including higher health care costs.