Health Care Industry Resists California’s Move to Limit Medical Bills

TL/DR –

Deductibles for single-person health insurance plans have grown 380% (or 8.7% annually) between 2002 and 2022, while family plan deductibles have increased 332% (or 7.8% annually). However, the state’s plan to slow the growth of health spending could mean consumers pay less over time. Critics, however, argue that the spending cap fails to consider uncontrollable factors like inflation and rising pharmaceutical costs, and warn it could lead to reduced access and quality of care.

Sharp Increase in Health Insurance Deductibles

From 2002 to 2022, single-person plan deductibles saw an exponential growth of 380%, an 8.7% average yearly increase. Meanwhile, family plan deductibles increased by 332% or an average of 7.8% annually.

Impact on Consumers

While consumers may not see immediate changes due to the state’s efforts to slow health spending growth, long-term effects could be significant. Health economist Glenn Melnick uses the example of a 25% premium contribution from an employer-based plan: if the premium increase rate slows down, the employee’s contribution would also decrease.

Controversy Over the Spending Cap in California

Medical providers in California, including hospitals and doctors, express concern that the spending cap, based solely on household income and not on actual care costs, could compromise patient care quality and accessibility. Critics argue that factors beyond providers’ control, such as general inflation, rising pharmaceutical costs, and the state’s aging population, are not taken into account.

Ben Johnson, vice president of policy at the California Hospital Association, warns, “The proposed target entirely ignores the drivers of health care spending, forcing providers to cut back on care or face penalties.”

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