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People who buy their health insurance in the Obamacare marketplaces are facing huge price increases for the next year. That is because the federal government is set to contribute much less toward people's premiums. But why are those premiums so expensive to begin with? NPR health policy correspondent Selena Simmons-Duffin explains.
SELENA SIMMONS-DUFFIN, BYLINE: The stories of what people are looking at for their premiums next year are staggering. For instance, why is it that a 64-year-old in West Virginia would have to pay $2,000 every month for an Affordable Care Act plan? Cynthia Cox with the nonpartisan health research organization KFF says it's pretty simple.
CYNTHIA COX: Obamacare insurance premiums are high because American health insurance premiums are high.
SIMMONS-DUFFIN: She says the premiums are actually about the same as employer health plans. It's just that in those plans, workers don't have to shoulder the whole cost. Cox says it's true that premiums were lower before the Affordable Care Act was passed. But back then, people with preexisting conditions couldn't buy those plans at all, and they often didn't cover very much.
COX: For example, health plans often might not cover pregnancy or even prescription drugs.
SIMMONS-DUFFIN: OK, so health plans now cover more people and more things, but it still seems like a lot of money for coverage, much more than people pay in other countries.
COX: I think it's a common misunderstanding that health insurance profits are what drives health care costs.
SIMMONS-DUFFIN: Perhaps surprisingly, Americans pay more for health insurance than people in other countries mostly because our hospitals and doctors charge more.
COX: A hospital visit in the United States costs more. A doctor's visit costs more. The same prescription drug costs more.
SIMMONS-DUFFIN: She says it's not like Americans are going to the doctor or having longer hospital stays. In fact...
COX: We have slightly fewer doctors' visits and slightly shorter hospital stays than people in similarly large and wealthy countries do. But we are just paying higher prices for that care that we get.
SIMMONS-DUFFIN: For the last few years, the 24 million people who buy their own insurance have been shielded from some of these high costs. These small business owners and farmers and ranchers have had access to these comprehensive health plans while only paying part of the premium costs, with taxpayers paying the rest, kind of like employees of big businesses pay part of their premiums and companies pay the rest. Now, that federal financial help is shrinking unless Congress works out a bipartisan deal in the next few weeks. People have until December 15 to pick a plan that begins in the new year. Lawmakers are currently home for the Thanksgiving holiday. Selena Simmons-Duffin, NPR News, Washington.
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