While Congress postures and pundits postulate, the public is actually getting its first taste of post-ACA (Affordable Care Act) health insurance. The program officially starts in January 2014. However, the California Health Insurance Exchange has had its maiden run in 2014 and is offering very specific prices for an array of plans. Everyone seems to have taken a deep breath as we all await the law’s impact upon insurance prices. Without claiming any psychic powers, I can predict with a high degree of certainty that my health care costs will drop considerably……however others may not be that fortunate. Here’s how to find out about your health insurance premium future:
The key point, folks: the Health Insurance Exchanges are focused upon providing health insurance for the relatively small number of Americans who don’t have health coverage through their jobs and/or government programs (Medicare, for example). But it isn’t just limited to those 30 million Americans who are uninsured. As I began to write this blog, I received a letter from my current insurer, Anthem/Blue Cross. The company informed me that due to ACA, it was discontinuing my current health plan for which I pay $291 per month (Smartsense Plus 6000 STD RX). It recommended a comparable ACA-compliant program for me called Core DirectAccess-CAAO. The cost of this allegedly comparable plan: $488 per month. Ouch! Looks like I’m now, technically, uninsured as of January 1. Fortunately, I never was all that excited about Anthem/Blue Cross and this sealed the deal for me. Goodbye Anthem, hello Covered California. I was ready to start shopping!
In October 2014, we started at Covered California’s web site to comparison shop. This is the consumer portal for the California Health Insurance Exchange set up to comply with the ACA. We plugged in some basic information about my location, age and income. Voila! We were presented with a number of different plans with different plan details. The bad news: there was no plan offered that was identical in copay, deductible and other terms to our previous Anthem ‘Smartsense‘ plan. So comparison proved to be a challenge between pre-ACA and post-ACA plans. However, Covered California offered two program categories (Bronze and Silver) that were sufficiently close enough to the ‘Smartsense‘ plan so we checked the premiums for the eight plans offered in those categories. The premiums ranged between $450-$500 depending upon the provider. Double ouch!
However, there was some good news. There’s the premium and then the premium after your tax credit and the difference was dramatic. As a result of the ability to get tax credits for the ACA plans, my monthly cost for both of these plans dropped to $200-300 per month, depending upon which plan and provider we chose. (No way we’re choosing Anthem/Blue Cross — that’s for sure!) This amounted as much as a 30% drop in my medical costs for an almost comparable plan. Out of pocket savings: $1,200. Wow! If you choose not to avail yourself of the tax credit, you can get direct Federal premium assistance, where the government will send the subsidy directly to the insurer thus reducing your out of pocket costs. You can learn more about premium assistance at the Covered California website.
There’s been a lot of media attention about the failures of the health exchange websites (“debacle” is thrown around a lot). We can report that one month after we notified Covered California of my intent to buy health insurance through the exchange, I received an email indicating that the enrollment was now open. It was a fairly straightforward process and took about 40 minutes. We made ourfirst monthly payment (which was $201 per month for a Silver-tiered product) and then waited. Within two weeks of completing the process, we received a phone call from the health insurance carrier (Sharp) and the following week, received our cards. The process wasn’t perfect, but with some perseverance it worked and I’m saving $100 per month while getting insurance coverage with lower co-pays and deductibles.
We strongly urge individuals earning less than $45,960 or families earning less than $94,200 to explore whether you are eligible for financial assistance in purchasing coverage through the exchange. The level of financial aid you receive will be based on your income and your family’s size. The savings could be thousands of dollars a year. The ACA also allows for cost-sharing assistance, which reduces your co-pays, coinsurance and deductibles. Cost-sharing assistance is available to people with income between 100-250% of the Federal Poverty Line. For an individual, that would mean where your income is no higher than $29,000. Remember to inquire about your eligibility for this assistance program. For more information on the elements of the ACA programs, Enroll America has developed an excellent web-based resource.
So for all those doom-saying pundits who view the ACA as the scourge of all that is good and righteous — none of you are going to get any portion of the $1200 that we save each year. As to those who stuck out their neck and supported ACA — like Hillary Clinton who first floated the idea almost 20 years ago and Barack Obama who renewed the fight and took the punches — thanks for the savings. If you don’t live in California, it is worth visiting Consumer Union’s website about health insurance options. But that’s just me and my circumstances may differ from those of other consumers. As with most any reform, there will be some winners and losers. The likely winners are people with moderate or low income who can use the tax credits to reduce their health insurance costs.
According to the Los Angeles Times in an October 2016 report, Obamacare has worked in California. The state has recorded some of the nation’s most dramatic gains in health coverage since 2013 while building a competitive insurance marketplace that offers consumers enhanced protections from high medical bills.Californians, unlike people in many states, have many insurance choices. That means that even with rising premiums, the vast majority of consumers should be able to find a plan that costs them, at most, 5% more than they are paying this year. The Times reports that between 2013 and 2015, the share of working-age adults in California without coverage plummeted from 23.7% to 11.1%, according to federal data. Only three states saw larger declines over the same period.The new coverage has dramatically improved patients’ access to medical care and reduced financial strains, other research indicates. More than three-quarters of newly insured Californians said their health needs are now being met,according to a recent survey by the nonprofit Kaiser Family Foundation.
Other Options for Insurance Customers
For those consumers who have moderately high incomes, the California Health Insurance Exchange programs may not be as economically attractive. However, there will continue to be private insurance programs sold through other markets that may be more affordable than those sold through the Health Insurance Exchanges. There are a number of insurance shopping sites that will continue to sell unsubsidized health insurance plans. Also, the White House announced that consumers who currently have health coverage can maintain those policies through 2014, even if they don’t comply with ACA. So you can preserve your current plan at its current cost for one additional year, as the health insurance markets work through the new program.
And if you are under the age of 40, we continue to strongly recommend Health Savings Accounts (HSA). The HSA allows you to make an annual tax-deductible contribution for current and future health care costs. What you don’t use remains tax-free and can be used for future health care costs until you turn 65. For young, relatively healthy people, HSA is a very good cost-proposition. Also, we believe it to be ideal for self-employed individuals and families. There’s more information about the benefits of an HSA account at this blog.
We’ll be learning more in the coming months about the impacts of the ACA upon health insurance costs and we’ll share what we can with you. What seems apparent currently is that the ACA is functioning as it was designed to function. (for more about this, check out my blog about the need for health insurance reform) For those trying to figure out whether ACA is good or bad, we recommend that you disregard the pundits and politicians for the time-being. The proof will be in the tasting of the premiums.
For those you are interested in learning the true facts about Obamacare and its impact upon consumers, here’s a video blog that I recommend: