By Mary Katherine Ham
Thursday, October 27, 2016
Like many other Americans, I got a letter last week. This
letter is becoming an annual tradition, arriving on my doorstep in October to
inform me of my Obamacare insurance premium hike.
Last year, the letter said my Bronze plan, purchased on
the marketplace formed by the, ahem,
Affordable Care Act, would increase by almost 60 percent.
This year, my premium is going up 96 percent. Ninety-six percent. My monthly payment,
which was the amount of a decent car payment, is now the size of a moderate
mortgage. The president refers to these for thousands of citizens as “a few
bugs” when to us it feels like a flameout.
For this astronomical payment, I get a plan with an
astronomical deductible that my healthy family of three will likely never hit
except in the most catastrophic of circumstances.
Let’s rewind to my pre-Obamacare health care situation.
Throughout my life and career, I have had both employer-based coverage and
significant periods during which I bought private insurance with high
deductibles and low premiums. During the run-up to Obamacare, President Obama
referred to these plans as “junk” plans, but my family and I received perfectly
good care and service through them. We were responsible, healthy citizens
consuming a small amount of health care, paying out of pocket for most of it,
and making sure we weren’t deadbeats should something catastrophic come to
pass. Our health insurance was a rational and responsible purchase.
The President’s
Huge, Broken Promises
When President Obama sold Obamacare to the American
people, he promised three things. 1) That we could keep our plans if we liked
them. 2) That the new system would offer competition between great options
through an Obamacare marketplace, and 3) That our premiums would go down. Not
“go up slower” or “go up but eventually go down,” but go down— $2,500 was the
figure.
The letter I got last week is a betrayal of every one of
those promises. I did not get to keep the plan I liked. The new system does not
offer competition between great options through an Obamacare marketplace. And
my premiums have gone up more than 150 percent in two years.
This was all predictable and predicted, by many
(including me!).
Hillary Clinton conceded this reality at the second
debate in response to an audience question about the Affordable Care Act. She
said, in effect, “It’s not affordable, but it does other stuff.”
“Well, I think Donald was about to say he’s going to
solve it by repealing it and getting rid of the Affordable Care Act. And I’m
going to fix it, because I agree with you. Premiums have gotten too high.
Copays, deductibles, prescription drug costs, and I’ve laid out a series of
actions that we can take to try to get those costs down.”
As most apologists for the law do, she listed the handful
of things people like the sound of— more people insured, no pre-existing
conditions, lifetime limits on out-of-pocket costs, stay on your parents’
insurance until you’re 26!
But those benefits came with added costs, mandates, and
overhead, and we’re now seeing the fruits of the whole law in a 25-percent average rate increase. When congressional
Democrats were constructing the worst legislative Jenga tower of all time, they
called critics’ predictions “lies.”
But here we are with lower-than-expected participation in
exchanges, extremely low numbers of healthy young people in the risk pools, and
insurance companies jacking up rates or exiting the exchange entirely in an
attempt to remain solvent under the weight of increasing benefits for
increasingly older, sicker customers.
This in turn leads to less competition on the exchanges,
which leads to fewer young and healthy people buying into these terrible and
terribly expensive products. The Department of Health and Human Services
determined one of every five people shopping on Obamacare’s exchange has only
one insurer to choose. This is what the death spiral you may vaguely recall the
president dismissing in 2009 looks like.
Buying Really
Expensive Junk
I have many blessings, two of which are the means to pay
for health insurance and the good fortune not to need much of it. As a result,
in the post-Obamacare world, I am a prime gouging target. I’m seeing a 96
percent increase because I am healthy, unsubsidized, and getting fewer and
fewer choices. My health care company abandoned the lowest-tier Bronze option
entirely in its attempt to stay solvent, funneling me into a Silver plan with
higher levels of care I don’t need at a higher price I don’t want.
My individual deductible is more than two times the high
deductible on my old “junk” plan. My family’s deductible is ten times what the
IRS defines as a high deductible. I now pay a high premium for a
high-deductible plan, while also paying co-pays and out-of-pocket costs,
meaning my plan is both junkier and more expensive.
Two points follow from this, neither of which has
anything to do with feeling bad for me. But my 96-percent increase in premiums
is a useful, unvarnished look at Obamacare’s effects. One, if this is a
hardship for me—if I’m sitting around thinking about all the lost opportunity
and savings in that giant monthly sum— so are many others who have far less
than I do. Even with subsidized premiums, many are finding they can’t afford
their deductibles, making their “affordable” health insurance useless.
Mr. Fanning, the North Texan, said
he and his wife had a policy with a monthly premium of about $500 and an annual
deductible of about $10,000 after taking account of financial assistance. Their
income is about $32,000 a year.
The Fannings dropped the policy in
July after he had a one-night hospital stay and she had tests for kidney
problems, and the bills started to roll in.
Josie Gibb of Albuquerque pays about
$400 a month in premiums, after subsidies, for a silver-level insurance plan
with a deductible of $6,000. ‘The deductible,’ she said, ‘is so high that I
have to pay for everything all year — visits with a gynecologist, a
dermatologist, all blood work, all tests. It’s really just a catastrophic
policy.’
Further, the system simply funnels customers into far
more expensive plans every year unless they go to the semi-functional exchange
during November and December to look around for something else. How many miss
the letter and open enrollment thanks to living their lives between
Thanksgiving and Christmas and end up with a New Year’s present in the form of
a new bill they can’t afford?
Punished For
Rejecting Expensive Junk
Two, is it any wonder exchange enrollment isn’t what the
Obama administration hoped and needed it to be? Putting aside the embarrassing
launch debacle (also predictable and predicted by me!), the law has created
products that aren’t worth buying. I’m a responsible citizen and single parent
of two young children. Let’s think about the incentives this system presents.
It would make far more economic sense to pay the tax
penalty for not having insurance, save the monthly payment, and squirrel it
away for a catastrophic event that may never occur. Should a catastrophic event
occur, work out a payment plan with doctors and hospitals, for which you’d use
the squirreled away premiums until the next open enrollment period, at which
point you just jump right back into a plan again because they can’t keep you
out for preexisting conditions. Should a catastrophic event never occur, you’ve
got no small part of a college education put away. My health insurance used to
be a rational and responsible purchase. It’s beginning to feel like neither.
There are plenty of young, healthy people the system
needs who are finding the same. As the New
York Times reported last year at this time:
Alexis C. Phillips, 29, of Houston,
is the kind of consumer federal officials would like to enroll this fall. But
after reviewing the available plans, she said, she concluded: ‘The deductibles
are ridiculously high. I will never be able to go over the deductible unless
something catastrophic happened to me. I’m
better off not purchasing that insurance and saving the money in case something
bad happens.’
Those who support the law during its meltdown suggest
jacking up the cost of rejecting this terrible product to make it more painful
than the cost of the terrible product. To them, we are but Westley in the Pit
of Despair and they are the technocratic torturer at the switch puzzling just
how much pain they can inflict without going full Humperdinck and killing the
strapping, young patient.
That’s how the Affordable Care Act became neither
affordable nor care. It’s almost as if you could have predicted it. Inconceivable!
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