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Healthcare.gov

There’s been a lot of talk in the news right now about the implementation of the new Affordable Care Act (aka Obamacare).  As you should have seen, the healthcare marketplace opened up October 1 and people have been attempting to sign up for healthcare through the new exchange.  In all the mess of the news about all the website glitches and the absurb numbers that people were receiving after signing up, I figured I’d visit the site myself just so I could get an estimate of how much it would cost me if I no longer had insurance available through my employer.

In the application process, it wants to know how old you are, or rather which category you fit in.  I’m not exactly sure if this means everyone under the age of 50 will pay the same rate or not, but this definitely seems to lead us in that direction, even if the “fine print” says that it’s based on specific ages.

Age

After a few more simple questions, it informs me of the different plan levels that are offered and a brief description of what they mean.  As told in the law, the minimum amount of a premium that insurance companies are now required to cover is 60%.  This level of coverage is their Bronze coverage.  The rest can be seen below.

Plan Levels

So I’m finally done with the fairly simple and easy process, and I get my results for what my insurance would cost.  The cheapest result is as follows…

Costs

At first glace, this price is higher than what I’m currently paying through my employer, however it isn’t higher than I would be paying if I had to pay the full amount of my plan.  So ok, I’d say it was a decent price.  But let’s look at the details.  It is estimated that Out-of-Pocket costs for the Silver level plans would be $6,350 a year, but it informs you that lower levels of coverage would have higher amounts.  So let’s try to be fairly proportional and say that the Bronze plan contained an out-of-pocket cost limit of $8,000 (although some reports have said up to $12,000).  Alright so the maximum I’d have to pay out-of-pocket is fairly high, but if I don’t have any major medical needs in a year, which as a healthy 24 year old I shouldn’t,  that number should never even come into consideration really.  So the last number I want to look at is the deductible.  Now my current health insurance plan has a deductible of around $500 dollars before insurance begins to kick in, and I understand that’s about as low as it gets.  The average estimated deductible so far for the Bronze level plan is $4,500!  For those who are currently not purchasing health insurance and may not fully understand the deductible, this is typically the amount you are required to pay out of pocket each year before your insurance will kick in.  In the case of the Bronze plan, after you pay $4,500, they will then cover 60% of your premiums until you hit another out-of-pocket limit of $8,000.

But wait, they are offering government subsidies for people who can’t afford these outrageous plans.  It’ll all be cheaper, right?  Well there’s a link to take you to another calculator where you can estimate your federal subsidy each year.  After entering all of my info, I was told that I would qualify for $0 worth of federal asssistance of medical costs.

Subsidy2

So let’s review.  My monthly premium under the new law would be (and we’re rounding for simplicity) $265.  That equates to $3,180 per year.  My deductible would be (estimated based on current average) $4,500 per year, so before I even was offered the sharing pool, I’d have to pay that amount out of pocket every time I received a bill.  The total deductible combined with my monthly premium would amount to $7,680 per year, and I haven’t received the first benefit of owning this insurance.  At this point, every doctor’s visit after this would cost me roughly 40% of the actual bill (since the Bronze coverage is 60% of premium) up to an out-0f-pocket cost of an estimated $8,000.

I wanted to compare this more closely to what I’m currently being offered.  As previously stated, my current costs are “subsidized” by my employer so I pay a cheaper rate.  But I’ll calulate it for the full rate price just to try and keep things fair.  It is my understanding my monthly plan costs roughly $400 for me per month, or $4,800 per year.  The annual deductible before I can receive benefit from this plan is only $500.  So to compare, the current plan I have asks for $5,300 out of pocket before they will step in compared to the new plan of $7,680, a roughly 45% increase.  Not only this, but after the deductible has been met, my current plan covers anywhere from 80-100% of my healthcare costs depending on the type of service.  The annual out-of-pocket maximum is nearly cut in half as well.

Now it doesn’t take a (Insert intelligent profession here) to comprehend that this new healthcare is not “Affordable” at all.  For a seemingly healthful 24 year old, the new healthcare plan would break the bank and for what?  Do I really need to pay that much?  I rarely even go to the doctor.  I just calculated that without health insurance, I, as a healthy 24 year old individual, would have spent roughly $1,500-2,000 dollars this year.  Most normal years for me would include a visit to the eye doctor, family practice once or twice, and maybe dentist for less than $1,000 per year.  So why in the world would I even want to buy health insurance?  At it’s peak, the maximum “tax” penalty I would pay for not cooperating in the program would be $695 for an individual.  I know for me, this would definitely be a serious consideration if I didn’t have the wonderful opportunity and offering I have through my employer.

So what does all this mean?  Well first of all, this new healthcare is extremely expensive!  The sad part is, these initial costs are based on estimates.  These companies are having to project how many people will sign up for coverage and among those numbers, how many people will be healthy young people in comparison to older people with serious pre-existing conditions.  The fact is, if after a year or two not enough healthy people are signing up for this new healthcare and they’re paying the fine instead, those who are in the insurance pool will see rates rise even higher as there won’t be enough funds coming in to pay for all the medical expenses for the older and the sicker.

This whole healthcare push as a whole has been very poorly executed and administered.  Roughly $600 million dollars (your tax dollars) was spent designing and implementing the new healthcare.gov website, and it’s already have some MAJOR issues.  There are too many broken pieces of this legislation that no one is willing to slow down and address because people are trying to push a political agenda.  The scary thing is, we’re now moving on to another major issue in this country, Immigration Reform, where the current bill that has already passed the Senate and is now being addressed in the House is just as flawed as the healthcare bill.  I believe it’s very important for us as a community, state, and nation to pay close attention to what’s going on with this healthcare overhaul and speak out against the things that we can see are obviously broken and flawed, as well as be knowledgeable about Immigration Reform before it gets pushed through Congress as well.  For more information on the Immigration bill, see this link for all the details including full bill text.  Get educated on the issues and on what Congress is doing and call your representatives when you want them to vote a certain way.  That’s what they’re there for is to vote based on their constituency, not on their own.  If we pressure them enough, they fear re-election more than anything else so I assure you they’ll listen.

If you’ve gone through the process of estimating your health insurance costs, or if you’ve even gone as far as fully applying, let us know what your rates and deductibles were so that we can fully see this new law in action.  Leave any information you have or just your thoughts in the comments below.

Sources:

https://www.healthcare.gov/

http://www.healthpocket.com/individual-health-insurance/bronze-health-plans#.UmqJa_nkv-s

http://www.healthpocket.com/healthcare-research/infostat/obamacare-bronze-plan-study/#.UmqKZPnkv-s

http://kff.org/interactive/subsidy-calculator/

http://www.csmonitor.com/USA/DC-Decoder/2013/1001/Obamacare-101-What-to-know-if-you-opt-out-of-buying-health-insurance

Comments

Keith McWilliams
Reply

Right on. It’s difficult to understand the justification of this entire process. Why the rush to implement healthcare reform. Take the time to do it right.
Why was a no-bid contract awarded to CGI Federal for site construction? Why did it cost so much more to build the site compared to other similarly sized sites? And the biggest question of all, what is the American public going to do about the lies surrounding the AFA. (i.e., you can keep your plan, costs will go do, nothing will change unless you want it to)

Zachary Magee
Reply

Well Keith you and I both can see past the curtains and understand that it’s being rushed so that they can get what they want out of it. Our gov’t leaders aren’t interested in making healthcare affordable and competitive, they simply want control of it. If they have control of our healthcare, they have enormous amounts of control over our lives (more so than they already do). The American public as a majority is too naive and too ignorant to do anything about this though. I’m not sure how to convince enough people in order to make any difference and cause a change.

Keith McWilliams
Reply

Just know why you take the positions you take and maintain strong convictions is all that we can do. And if the opportunity arises, we must be willing to answer God’s call.

For a point of reference. Using the same process you used in your article (just browsing the market place as an under 49) in Tennessee the advertised rate is $113 for a Bronze Plan. For the same rate as a Bronze plan in MS (~$220) you can receive a gold plan in Tennessee. The under 49 estimate is based on a 27 year old non-smoker with no pre-existing conditions.

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