After numerous attempts, today I was able to see my affordable health care options on the healthcare.gov site.
As a self-employed individual, I currently do not have health insurance. I could have continued coverage through COBRA when I left my full-time employment, but the premiums were about $700 per month, which was more than I could afford.
Unfortunately, because I run a moderately successful business, I make a decent living. It’s not exorbitant by any means. I pay a modest rent. I saved up enough cash to buy a used Ford Escape with over 160,000 miles on it. I have a ParentPlus loan to pay off, plus some old credit card debt, and I pay all of my own taxes. Even so, my income level is just enough to make me ineligible for the subsidies for the insurance premiums being offered through the AHCA.
(If it matters as you continue reading this, let it be known that I’m a registered Democrat, a moderate liberal, and given the current state of the Republican party, plan on staying with that designation.)
The coverage I had through my former employer was a standard PPO plan. I had a $500 deductible, $20 copay for office visits, $15 prescription plan, 80% of total costs were covered, and a maximum out of pocket (OOP) expense of $2500. No dental. No vision. Still, it was a good plan.
Under the former plan, had I continued it through COBRA, the annual premium would have been $8,400. Assuming I had a bad health year that made maximum use of the coverage and required an office visit every two weeks for an entire year, by the end of 12 months I would have shelled out:
- $8400 (annual premium) + $500 (deductible) + $520 (office visits) + $2000 (max OOP minus deductible) = $11,420. Note this assumes that despite my clearly poor health, I did not need prescriptions.
Under the cheapest Bronze plan in my county/state, the annual premium is $5,844 with a $5,500 deductible, the maximum OOP is $6,350, and the plan pays 60% of the total health care costs. Where it gets tricky is that this particular plan does not use a copay. It uses a 10% coinsurance, but for the sake of comparing apples to apples, I’ll keep the $20 copay scenario. Making the same assumptions as above, that I’ll reach the limits of my coverage by the end of a 12 month period, I would pay:
- $5844 (annual premium) + $5,500 (deductible) + $520 (office visits) + $850 (max OOP minus deductible) = $12,714. That’s $1,294 more than the coverage provided through COBRA and with a 60/40 split versus an 80/20 split.
Alternatively, I could assume that I have a typical year of reasonably good health where I only visit the doctor twice in a year, do not need any lab tests or other studies, and no hospitalization. In this scenario, I would make out better with the AHCA plan because no matter what, I’m paying $20 for the office visit, and I wouldn’t hit the deductible under either plan. But, as is true of ALL insurance of ANY type, I’m paying premiums for a service I will likely never use over the course of a year. Not saying this is a bad thing, i.e, I do want the auto insurance to be active the day my car gets wrecked or stolen, but it does factor in when determining what is affordable.
The reality of my experience thus far without any health insurance has been a visit to the doctor for a particular problem (not a free preventative care visit) with some needed blood tests and a prescription.
As a new patient with this particular physician, the first office visit cost is $160. However, because I was paying cash, the fee dropped down to $60. The cost of the blood tests at the lab was set at $135. Because I was paying cash, the lab only charged me $45. The reason both the doctor and the lab were able to offer me the lower cash rate is because 1) their overhead dropped considerably with no need to code the visit and submit a claim form; and 2) the cash rate already paid them more than they would be reimbursed by an insurance company. It was a win/win.
This is where I struggle with the whole concept of the AHCA. First of all, I appreciate the fact that for those who qualify for the subsidies, this is not a terrible deal. With a subsidy, my annual premiums would drop quite a bit. The monthly rate would be affordable. However, I’d still be looking at needing to put out $5,500 in a year to meet the deductible. If you’re living at income levels that qualify for the subsidy, this is a HUGE amount of money. On the other hand, I have also had the experience of spending 18 hours in an ER resulting in a whopping $16,000 bill from the hospital and this was over 15 years ago. Sure, I’m still screwed if I have to pay $5,500, but $16,000 would be insurmountable.
Therefore, I’m not saying it won’t help anyone. But I’m also not jumping on the “best thing ever to happen to this country since Social Security” bandwagon either. And here’s why….
What really bothers me about the AHCA is the default assumption that in order to get any sort of decent healthcare, you MUST have insurance. Why is that? Why is it a GIVEN that insurance companies MUST be involved at ALL levels of care in order for the average person to be able to pay for their health care?
Reconsider my recent experience. Assume I have to repeat this same visit next year, only this time, I’ll have my AHCA plan. Neither the doctor nor the lab will be able to offer me a cash rate because technically, I have insurance. They know I have insurance because it’s required. They MUST code my visit and submit a claim form, which means their overhead goes up. If I follow the actual rules of the cheapest Bronze plan (remember the coinsurance? that doesn’t kick in until the deductible has been met) I will not have met the $5,500 deductible, so I will bear the full cost of the visit. My OOP expenses will be:
- $160 (doctor’s visit) + $135 (lab work) = $295
versus the $105 I paid out this year for the same services. And that extra $190? That pushes this visit into “not affordable” territory because the same month I’m paying for this visit, I’m also paying $487 in premiums. The total outlay for health care in the month I visited the doctor and had some minor blood tests done will be:
- $295 (OOP expense) + $487 (monthly premium) = $782
Even with a modestly successful business and decent income, $782 in one month added to other monthly expenses such as rent, food, gas for the car, and utilities is not affordable. And the only thing that has changed about this visit – the only new factor not present in the original scenario – is the insurance. At the lower levels of health care, insurance IS what drives up the cost.
What really sticks in my craw about this (among many other things) is that with the mandate that requires me to make this purchase, I have lost any ability and opportunity to negotiate a better rate with my health care providers. Will health insurance coverage help me if I’m ever in an accident or am struck down by a serious illness? Absolutely. And I am totally on board with the idea that no one in this country should be kept away from receiving life-saving treatment based on their ability to pay.
On the other hand, when it comes to the average level of health care most people need, I’ve been painted into an unaffordable corner. It will cost me more to be treated for minor health issues with insurance than without. And now there’s nothing I can do about that.
(On a side note, while everyone is touting the 100% coverage for annual physical exams, everything I said so far would apply if the physician found anything wrong with you as a result of that physical. The 100% coverage is awesome as long as you come out with a clean bill of health. Once they discover you have diabetes or chronic hypertension, things get to be more costly.)
It seems to me that one way to make routine or typical non-preventative health care more affordable for more people is to get the insurance companies out of this level of care. There are ways to do this without putting physicians at financial risk and without lowering the quality of care. (What about pre-tax dollar health care savings accounts? What about sliding scale fees for non-emergent treatments?) In fact, I would suggest that the financial risks for physicians has become higher under AHCA as even mid-level income patients are no more able to pay for $295 in medical care plus premiums than they were without insurance, given the high deductibles associated with these plans. What troubles me is that no one seems to be interested in figuring out how to do it. How do you get the insurance companies out of the business of low-level health care?
There are other problems as well. Because I’m supposed to have the option of purchasing a separate insurance plan outside of the marketplace if I so choose, I went looking for alternatives. The first place I visited was the AARP website. AARP used to offer primary health insurance at group rates to its members. Now it does not. Instead, the site only offers a Medicare supplement plan and refers me back to the healthcare.gov marketplace if I want a full major medical plan. Why? Because the AARP doesn’t see the need to take on the expense of administering a group health care plan when someone else will pick it up. Is the AHCA plan better or worse than what AARP used to offer? No idea. They cut the plan.
I next went to einsurance.com, which claims it will help me find the best coverage available for the self-employed. The result? A list of the same AHCA plans available on the healthcare.gov site. There are no other options presented.
Finally, I went to the National Association for the Self-Employed website. I can’t look at their plans yet because first I have to pay $120 per year for a membership. I’m afraid to invest that money because I suspect the options for individual health care in my state will be exactly the same as the AHCA plans and there will be no other companies offering alternative plans.
I’m not seeing the promised options here.
My Significant Other works full-time for a small company. His company currently offers a health care plan and picks up part of the premium. His cost is around $100 per month. He has been put on notice that this plan will likely be phased out next year because the company is small enough to reduce its staff to less than 50 full-time employees, using part-time and temporary staff to pick up the slack when things are busy, which exempts them from having to offer health insurance to their employees. Again, the company does not see any need to bear the burden of administering a separate health care plan when someone else is willing to do it for them. Frankly, as a business owner myself, I can relate to this concept. Thus, my SO could potentially end up paying over $5,000 per year for a lesser plan when he’s only paying $1,200 a year for better coverage.
And as long as I’m ranting, I think it’s worth pointing out that companies started offering health care plans to their employees because it helped the company remain competitive. Plans were offered as an add-on to salary compensation to “sweeten the deal” to prevent desirable employees taking jobs with competitors. It was never suggested that companies had an obligation to take care of this aspect of the lives of their employees. In fact, many companies used the offering of health benefits as a way to control their salary costs. They could get away with offering a lower salary if the health benefits were better than anywhere else. Given that the trend has long since been moving away employees staying with one company for the full duration of their careers, the rationale for a company to invest in their employees’ long-term health is even less than it was 20 years ago and yet, suggesting a company not be required to offer comprehensive health care benefits to employees appears to be some sort of blasphemy.
As noted above, I definitely appreciate and support the notion of affordable health care for all. I’m well aware we have to start somewhere. What I don’t support is a model that keeps insurance companies involved at all levels when the evidence suggests it is their involvement that is specifically driving up the costs. What I also don’t support is the mandate that eliminates any impetus for anyone else, such as AARP or NASA, to offer other alternatives that may work better for my situation.
For those that are benefiting from the AHCA, I think that’s great; however, I also think we’re a long way off from actually solving the problem.