Saturday, February 15, 2014

Why I Hate Obamacare...

So when I originally started this blog, I had intended to talk about things besides just parenting and "mommy" issues. So far, that hasn't happened, but there is a political issue that hits home with me that I have to write about and that is.... Obamacare. Otherwise known as the Affordable Care Act, the intent of this law was to allow the 30+ million Americans without coverage to get insurance and for people like my family, whom the government decided had inadequate coverage, to get "better" insurance. Here is my family's situation and I'll let you decide whether the ACA has improved it or not.

My husband is self-employed and thus we buy our own insurance. Until the ACA mandates went into effect, we paid approximately $900 a month for our insurance. We had no deductible, no co-insurance, and our plans covered everything that the ACA mandates. We did not need to designate a PCP or need a referral to see a specialist. The only ACA non-compliant part is that the policy has a max payout of $1 million and other limits, such as $500 a year for diagnostic testing, etc. These were limits that we were completely fine with, and we specifically chose this plan because it was the best fit for our family. I should also add that we are a generally healthy, non-smoking family with no medical issues aside from the occasional ear infection or bout of strep. We also do not qualify for a subsidy on the exchanges.

Fast forward 3 years. We were three of the millions of people who got cancellation notices because our policies were deemed by the government to be substandard. The closest plan we could get to our old plan is $938 per month (not that big of a deal) BUT has a $2000 individual/$4000 family deductible, 40% co-insurance, and a max out of pocket of $6350 individual/ $12,700 family. And that is for a Silver plan. The deductible, co-insurance, and max out of pocket for the Bronze plan is even higher, though the premiums are slightly less.

The argument in favor of why this is better that I most often hear is that "well in the event of a medical catastrophe, you could go bankrupt under your old plan!". Here is why that argument is invalid. Yes, medical expenses account for over half of all bankruptcies. But I would guess that most people assume, as I once did, that those filing for bankrupcty have huge amounts of medical bills, when in fact the average for individuals who had insurance was only $17,749 (according to a bankruptcy study done by Harvard in 2007, the same study that was used time and time again as a justification for why the ACA was needed). By the way, that same study determined that 80% people filing for medical bankruptcies HAD insurance. Since that number was from 2007, it is likely to be a littler higher now, but I couldn't find exact numbers for the average medical debt in bankruptcy now (if anyone else has them, please share).

If I ever end up with medical bills in excess of $1 million dollars, yes this new "improved" insurance may save me from bankruptcy. But given that the average medical debt of bankruptcy filers is only $17,749, it is likely that this will NOT be the case. There are any number of ways to exceed that threshold even with my new, "better" insurance. The coverage factors between the new and old policies were roughly the same, so things that would not have been covered under the old policy still would not be covered under the new. Plus now my provider network is significantly reduced, increasing the likelihood that I might require treatment from an out-of-network provider. Since we are playing the "what if" game, what if I fell ill and was taken, unconscious, to a hospital that is not in my network? I would then be footing the entire bill (or at the very least, 50%- with no max out of pocket limit) which would easily put me into bankruptcy territory. That doesn't even take into account the extra $6350 in in-network medical bills that I would have to pay under the new policy, but not the old. And let's face it, the most likely thing to cause my family a catastrophic injury as healthy young adults (and a child) is a car accident, in which case my auto insurance would be responsible for the first $500k of medical bills, giving me close to $1.5 million in expenses before I would have had to pay anything. The chances of needing more than that are very, very slim and, frankly, a risk we were willing to take. A risk we should have been free to take, but the government said no.

In truth, there are any number of things that can send a person into bankruptcy. The sudden death of a wage-earning spouse for example. Are we next to mandate that everyone carry minimum amounts of life insurance? What if there is an earthquake, are we to over-regulate homeowner's insurance next? I don't live in an earthquake prone area, yet a couple of years ago we did in fact have an earthquake. Had it severely damaged my home, it would not have been covered by my homeowner's policy and we probably would have had to file bankruptcy. Should everyone now be forced to have earthquake insurance on their insurance policies, whether they are likely to need it or not? Or flood insurance for those not in a flood plain? The truth of the matter is, shit happens in life. You can't adequately prepare for every risk that may or may not happen to you, and the government certainly can't prepare you for it either. You can only do the best with what you have. You weighh the risks and make the decision that is best for you at the time, and re-evaluate later should circumstances change. 

What bothers me most about the ACA is that the government is telling me that I don't know what is best for my family. That I'm not intelligent enough to weigh the risks associated with the insurance policy I had, or that I don't have the financial means to cope in the event that it proves to be insufficient. Not only has it interfered with my choice of coverage, it has also interfered with my choice of doctors and hospitals. It has even interfered with our ability to expand our family. It will now cost us approximately $5000 more to have a child than it did when The Climber was born. So I ask you... am I really better off with this new policy?

Perhaps I would be more amenable to the ACA if it was shown to be fulfilling its intended purpose- to get the uninsured coverage and to lower health care costs. So far, it does not seem to be doing much of either. According to various news outlets, the majority of those who've gained coverage on the exchanges are people who have signed up for Medicaid (a large number of which would have been eligible even without the ACA) or people who already had insurance and were either dropped like we were or looking for a better deal. It does not seem to be doing anything to lower medical costs either and seems to in fact be doing the opposite. Higher premiums, larger deductibles, increased co-insurance, and larger out of pocket maximums seem to be the chief complaints. And then there was that pesky study in Oregon that showed emergency room visits actually increased after more people had coverage.

But instead of simply complaining like everyone else, I will offer a two-part solution for reducing medical costs. First, go back to the way it was when health insurance first came about. Have it be for major medical only (catastrophic illness or injury, maternity care, surgery, etc.) and pay everyday medical expenses out of pocket.  Second, regulate the insurance companies ability to "contract-down" what they pay to providers. Yes, a major source of increasing medical costs can be attributed to those who don't pay their bills. But there will always be people who don't pay... that is something that will never go away. But when you have the major insurance companies paying 11% (or less) of the total costs to a provider? Of course they are going to up their prices to make up that loss. Don't even get me started on the low reimbursement rates of Medicare and Medicaid. If providers are able to recoup more of what they bill, eventually costs will go down. And recognize that different providers have different operating costs. An urban Level 1 Trauma Center that is also a teaching hospital, for example, is going to have a much greater overhead than a small, rural hospital and as a result, will always be more expensive. I think a lot of people are quick to blame doctors and hospitals for their exorbitant prices without really understanding what goes into determining those prices.

In the end, has the ACA helped some people? I'm sure the answer to that is yes. Has it hurt more people than it's helped? I would argue that the answer to that is also yes.

No comments:

Post a Comment