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Q: What’s worse than a 39% increase in your insurance premiums?

A: That same insurance covering only 48% of your medical expenses.

This was the case for persons buying insurance in the individual market from 2004-2007, according to a new KFF analysis. By now most have heard about the recent premium hikes to individuals in the nongroup market, but less known is what follows the hike; to ‘console’ the victim, insurers will suggest that the beneficiary can avoid this increase by switching to a ‘lower-cost policy’. Known as buy-downs in the industry, moving to the ‘lower-cost policy’ means receiving a higher deductible policy with lesser benefits, or put simply, more money for less coverage. And here is the kicker…the trend is not isolated to the individual market, as employer-based insurance is also seeing a greater take-up of high-deductible plans in the face of increasing costs:

In wonky terms, the amount of medical costs covered by the insurance company is called Actuarial Value (AV). The health reform legislation includes important baselines for insurance AV, based on income level. For example, a family of four earning $88K must have at least 70% of their medical costs covered by their plan while a family earning $33K are only responsible for 3% of costs (where the plan has a 97% AV). Cost sharing is a useful mechanism, though high deductibles can be a significant deterrent for individuals who avoid needed care (particularly low-income individuals).

This is an incredibly useful talking point for those skeptics in your life ‘who are happy with their insurance’, as this trend will directly effect more and more of the population in the years to come, resulting in millions becoming underinsured while foregoing care because of increased financial obligation.