The Affordable Care Act and an alternate future

I’m one of those people who had a policy I liked, and I’ve been able to keep it. Sounds great? Not so fast. Look how lack of regulation has affected the premiums I pay per month:

Year Beginning of year End of year (September increase)
2011 $360.87
2012 $405.32 $437.77
2013 $507.67 $559.99
2014 $588.72 $641.04
2015 $845.35
2016 $934.50 $1,180.95
2017 (notified of increase) $1,669.87

 

I cover my daughter and myself, with a $3,500 per year family deductible, a 100% coverage (no co-pay) after the deductible is met, and the plan is Health Savings Account compliant. Nothing being offered to me via HealthCare.gov is even close—all have co-pays and out of pocket maximums that would double my paid out amount because my daughter has a chronic illness where medications and doctor visits total more than $1,000 per month. No matter the plan, we’ll meet the deductible and out of pocket maximums every year.  None of the ACA plans include the three doctors nor the hospital we most frequently use, and the “best” of them equal or exceed our highest monthly cost.

Yes, it’s dismal. I was and remain a supporter of the Affordable Care Act, because so many friends, family, and clients couldn’t have gotten insurance except in a high risk (and high cost) pool before the ACA, due to pre-existing conditions. In fact, I’ve heard more than one story about people staying legally separated but not divorced, so that a spouse could continue health coverage pre-ACA. But without universal participation in health coverage, rates are exploding. Why?

  • Many more sick people are now getting health issues addressed. This has been a bonanza for hospitals, who can now actually get paid, but a drag on insurance companies who now have to cover these people and payments
  • If you have a non-ACA policy that you’ve had for a long time, you’re aging, and you’re likely keeping it because it covers more than the ACA policies, ergo you’re costing the company more
  • There are no breaks on costs—it’s a “free” market after all.
  • Many doctors are exiting acceptance of ACA insurance. These are doctors who want to be able to bill at an even higher rate, and do. Many are choosing to be completely out-of-network, which means the consumer will bear all the higher costs, making the insurance supplementary rather than full coverage.

 

Actually, I think my premiums are a pretty good representation of what we’ll see if we lose the ACA rather than improve it—after all, these premiums are from the unregulated segment of the market. We’re in a horrible mess, particularly in Illinois. I laugh when I hear that vouchers are the solution. My prediction is that this will drive consumer costs up even further, because the system will become  bill +voucher add on. It’s like selling a house by owner to save the commission—the seller think he’s saving the commission, but the buyer also is expecting a lower price because the seller is “saving the commission”. In the end, nobody saves, but everyone gets less service.

I see the terrible effect of these stratospheric increases. My clients who are self-employed, or run small businesses, professional services, or consultancies are being priced not only out of the market but out of running their own businesses by these astounding increases. If we want a climate of business start up, expansion, or new ventures, something has to be done to contain the nuclear explosions. The inability to get individual health coverage for business start ups was one of the benefits the ACA was supposed to provide, but the current toxic effect of sky high premiums is instead crushing those same entrepreneurs.

We planners struggle to estimate foreseeable costs for retirees, entrepreneurs, and early retirees, but I don’t think anyone in 2011 was contemplating a 462% increase in premiums (which is what mine have increased). Just to put that payment in perspective, my 2017 monthly payment for health insurance would support a mortgage of about $350,000. I’m buying a house with no equity to show, and no term end in sight.

From my point of view, the only way to rein in costs and get a rational health care system is a single payer system, sometimes known as Medicare-for-all. Unfortunately, it looks like the current administration and Congress is hell bent on taking us in the other direction—solving the problem by forcing people off health care, or providing poorer and fewer services, rather than focusing on a way to provide better, more efficient care. Unless you can Pay. A. Lot.  Why can every other Western democracy solve this, but not the U.S.?

 

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