Dose of Reality: ACHIA's a bad deal unless you're desperate

In the March 2010 Dose of Reality, Davis takes on ACHIA and the sudden spate of cheery ads and announcements publicizing Alaska's Comprehensive Health Insurance Association:

These ads stress the idea that every Alaskan already has the ability to buy health insurance. Why do you suppose that is? Could it be that the ads are a propaganda ploy trying to promote the idea that we don’t really need health care reform just because it promises that everyone will be able to get insurance despite pre-existing conditions? Also, we might ask, why are so few Alaskans enrolled in the ACHIA program?

Davis tackled the ACHIA program in an earlier article, too, in February 2009, describing how the program works.

Insuring the Uninsurable

In February's Dose of Reality, Davis looks at the some 60,000 Alaskans who are refused health insurance by the for-profit industry and the alternative they are provided by the state: health insurance so expensive that almost no one has purchased it:

The cheapest ACHIA policy is a PPO plan with a deductible of $15,000 and maximum out-of-pocket expense of $25,000. A person twenty-five years old can buy this policy for $1,848 per year, but it costs a sixty-year-old person $6,384. Each of those persons is at risk for another $25,000, the out-of-pocket maximum, and each will have to pay the $15,000 deductible before receiving any benefit whatsoever from the policy. Thus the twenty-five-year-old will pay out only $1,848 for health care if he needs no health care during the year (all money goes to policy premiums) but at worst he might have to pay out another $25,000 for the health care he needs before the policy covers all costs thereafter. Thus, his worst-case expenses are $26,848 per year.

How many 25-year-olds can afford $15,000 in deductibles?