Human interest stories about people whose insurance costs are "skyrocketing" under the ACA are starting to blossom. These articles are at best misstating what’s going on or--at worst--deliberately misleading consumers about the Obamacare changes. If I may:
1) Most Americans--including me--are insured by their employers who, in turn, get tax incentives to subsidize their employees' insurance. In my case, I pay about 20% of my premium. My employer covers about 80% of my total plan's cost. That's pretty typical.
My cost is going up by about $20 next January. Is that annoying? Yes. Is it good for me? Yes! To comply with the ACA my insurance has to change to cover pediatric care (including vision & dental); emergency services and hospitalization; maternity and newborn care; lab services; rehabilitative care; preventative care including free screenings and physicals; mental health and substance abuse treatment; and prescription drug coverage.
Plus! There's no lifetime cap on benefits and they can't terminate or change my plan suddenly if, say, one of us got sick. Or it's possible my son will need treatment for dyspraxia. Before the ACA, there was a lifetime cap on how much treatment my insurance would pay for. Or consider someone with a chronic disease. Now that person can't exhaust their benefits.
I mention this because it's the insurance most people are familiar with. About 80% of people with insurance have policies subsidized by their employers. So, when they see stories about rising premiums and see their own premiums increase, like mine, they're undoubtedly concerned.
There's a second type of market, though. Individual plans for the self-employed or for people who don't have an employer-provided plan.
Importantly, this market hasn't been "in the light," so to speak. A lot of the complications and changes that are getting media attention are simply things on the individual market seeing the light of day.
Which brings me to...
2) The policies being cancelled are mostly limited to the individual market. A lot of them are low premium, high deductible plans with low lifetime caps. For instance, some plans might be $56 a month. But they cover, essentially, nothing. If a person with a catastrophic plan like that gets sick they're shit outta luck. Their insurance might pay, say, $10,000 (being generous) and the rest of the $200,000 falls on the patient's shoulders.
The policies are being cancelled because they don't meet the minimum requirements under the ACA. Those plans have to actually, you know, provide benefits. These junk plans are grandfathered if they existed before March, 2010 and haven't changed since.
So, I understand the sticker shock and I get the frustration when people see premiums go from $70 a month to maybe $300 or more.
On the other hand, the ACA offers a federally funded expansion of Medicaid for low income families, children, and the elderly. Almost all Democratic state legislatures have expanded the coverage and are accepting the additional funds. Some Republican-controlled states like Ohio have expanded Medicaid and are accepting the funds. Most Republican states have not. So their residents are going to be stuck between getting Medicaid and getting help paying for a private plan.
Which is another major point. Depending on someone's income, the sticker price of a private plan isn't what someone would actually pay. Someone getting a $400 a month plan might qualify for subsidies that lower their monthly total to $80 a month. Much easier to handle.
Still an extra cost? Yes. But, much cheaper than betting against getting sick, having a child, needing medication, or having an accident. Statistically speaking it's like betting red on a roulette table with only four red spots.
Don't get me wrong. I understand the concerns. And even the idea that you should be "free" not to buy insurance and take that bet. But, if you do, you're only making everyone else's bills higher.
It's frustrating that the headlines are *technically* correct but extremely misleading. They don't mention those expanded benefits. They don't point out that insurers canceling plans or raising costs exponentially are private insurers padding their bottom lines. Or, in some cases, trying to defraud their customers (http://talkingpointsmemo.com/dc/insurance-companies-misleading-letters-obamacare).
End rant.
