WASHINGTON—During the Democratic presidential primary debate Thursday night, there was some discussion about what a moderator identified as the number one issue of concern to Americans: health care.
To any Canadian tuning in, the topic wouldn’t have been a surprise. But it could be hard for an outsider used to the Canadian system to even understand what they were talking about.
Americans talk about being able to choose their doctor, about copays and deductibles, about the plans available on exchanges. It’s easy to get the bottom line — that the system is complicated and expensive — but how it works is hazier.
What are Americans talking about when they talk about health care?
Here are some basics on how the American system works and what candidates are proposing to change.
How Americans get covered
The majority of people below retirement age — an estimated two-thirds of the population under age 65 — get health insurance coverage through an employer.
Seniors, and some younger people with disabilities or specific chronic illnesses, are covered by a government-funded plan called Medicare. Low-income people qualify for a different government-funded plan called Medicaid.
Since the passage of the Affordable Care Act — “Obamacare” — everyone else can buy insurance from private companies on “exchanges” that offer various plans based on income. These exchanges vary from state to state, but are open for enrolment for about a month every year, and people must re-enroll and buy or renew insurance every year.
In 2018, according to the Congressional Budget Office, about 29 million people remained uninsured.
How much insurance premiums cost
Those covered by Medicare and Medicaid have their premiums covered by the government. But there are other costs for most insured people (which we’ll get to in a moment).
For those with employer-provided insurance, in 2019 the average cost of premiums for family coverage in employer-provided plans was $20,576, according to research by the Kaiser Family Foundation. Of that amount, employees chipped in an average of $6,015 in payroll deductions, with employers paying the rest.
For those buying on the ACA exchanges, the average annual premium in 2019 for family coverage was $13,848, according to an Ehealth index report. Most people are eligible for tax credits and government subsidies of their premiums.
How the other substantial costs break down
Insurance premiums are not the only costs of health care. Most plans, including Medicare, require Americans to pay out of their own pockets for care in the form of both deductibles and copays.
Deductibles are familiar to Canadians from car insurance plans — that’s the amount a person has to pay themselves before their insurance kicks in. In the case of American health insurance, deductibles are usually annual amounts people are responsible for before their insurance pays anything.
Copays are an amount people pay themselves for each procedure after their insurance kicks in — for instance, a flat amount paid per visit to the doctor in addition to what the insurance will pay. These are capped by annual maximums.
What’s the bottom line on the actual cost?
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The Millman Medical Index for 2019 estimated the average total cost of health care for a family of four with employer-provided insurance — including premiums, deductibles, and copays — at $28,386.
For an average family of four earning $65,000 and buying insurance on the Obamacare marketplace, according to a Kaiser Family Foundation calculator, a benchmark “silver”-tier plan, including premiums and out-of-pocket maximum expenses, would cost $21,734. After a tax-credit subsidy for such a family, the total annual cost would be $11,893.
Those on government Medicare pay an individual average out-of-pocket annual cost of $5,450.
What’s all this about “choosing your doctor” and “networks”?
Most health insurance plans have negotiated rates with specific doctors and hospitals, and limit their coverage to those networks of providers. The system gets quite complicated — there are different types of plans (EPOs, HMOs, POS, and PPO plan types) with different rules, but most require a subscriber to find a doctor or facility that is “in network” — that is, has a contract with their insurance company — in order to have treatment covered.
This is one of the things Americans fear about changing insurance companies or plans — that they will need to change medical providers.
What is proposed to change?
Democratic presidential candidates Bernie Sanders and Elizabeth Warren both say they’d replace the entire system with a Canadian-style single-payer government system called “Medicare for All,” which would cover all Americans, and virtually eliminate deductibles, copays and networks. Their proposals would also cover prescription drugs, and the Sanders plan includes dental coverage.
Most of the other Democratic candidates oppose this. While cost is one factor, another is polls suggesting many Americans like the coverage they currently have from their employers.
The other Democrats favour some version of an expanded Obamacare plan that includes a “public option,” under which people could choose to buy into the Medicare plan as an alternative to private plans or their employer-provided insurance.
Republicans have been trying to repeal the Affordable Care Act, and have been challenging it in court (an appeal court this past week found its requirement for everyone to buy insurance was unconstitutional, and sent it back to a lower court to see if the act could survive at all without that requirement).
President Donald Trump, as both a candidate and as president, has bashed Obamacare while promising better coverage; earlier this year, he promised the Republicans would become known as the “Party of Healthcare.” However, while trying to repeal and challenge the existing system in court, he has failed to introduce a plan that would deliver on his promises to cover everyone, including those with pre-existing conditions.