Patient Protection and Affordable Care Act

I have been a big fan of getting my health insurance from independent policies instead of going through my employer.  This goes back to the early 1980s where I voluntarily followed an “indiviual mandate” to keep myself on some policy.   I was able to extend my pre-ACA so-called sub-standard policy so that I have until December of this year.  I have been reviewing the policies available and found them to be 2-3 times more expensive than my current plan but it is more of a matter of adjusting budgets: what I pay in health insurance will not go into other things.  No big deal.  So on the whole, I would say I don’t sufficiently motivated to argue for its repeal or revision.  Speaking only personally, I am not going to object to it.

Nevertheless, I feel annoyed at how it is portrayed.  Again, I’ve been using independent market insurance for most of my life but in particular during my youth.  In other words, I insured during my young-invincible phase.  I got individual insurance (actually it was a group plan through my professional society) explicitly to isolate the insurance from any employment.  The reason is to be able to be free to make employment related decisions without regard to health insurance coverage.  In particular to be able to be free to leave employment when it no longer makes sense for me.

Before ACA, I chose insurance plans based on a compromise between affordable monthly premiums (100% certain they would have to be paid) to coverage and deductibles (less certain that I will need to use them) and overall limitations of networks, annual and lifetime maximums.   The lower monthly premiums allowed me more time to live on savings without needing a paycheck.  During periods of unemployment, I would want low hassles for immediate care if something were to come up that would exceed a high deductible I would feel comfortable to pay out of pocket.  These compromises are continued to be available in new policies.

What is different is the choice for accepting a lifetime or annual maximum, a limitation on some extreme conditions, and non coverage for preventive care or mental health coverage.  These latter options I feel are the primary driver for the added costs.    Of these, I think the required coverage for routine wellness preventive coverage and mental health coverage are a big factor in the increase in costs compared to my pre-ACA insurance.   In the case of preventive wellness care, it becomes an almost certain cost that will have to be paid from the coverage.  In the case of mental health (therapy), when it is started it requires weekly sessions that costs equate to nearly the cost of the premium.   I’m all in favor of these wellness care periodic exams and occasional mental health sessions, but I prefer to budget them separately.  I prefer to minimize these while others prefer to take full advantage of them.  The net result is that I am helping to subsidize those who take these benefits that I consider at least somewhat optional.

I am very sympathetic to people needing coverage for life-shortening but curable or manageable diseases.  I’m willing to pay higher premiums to be sure these less fortunate people are covered.   However, I would like to associate with plans that are more reluctant to use health insurance to pay for routine wellness related visits including monitoring manageable chronic conditions.   It is the fact that the law forbids my choice in this matter is what I find objectionable.

For now, I’m ok with it.  I have looked at the plans and recognize the basic divisions of the different levels.  I recall the arguments starting with the idea that the gold level plan is appropriate for most people with platinum for those more accustomed to more generous plans, and silver for those needing more economical plans.   Bronze and catastrophic plans were added later for much more budget constrained with the idea that eventually they will move up to the higher plans.  Within these plans, cost-wise the closest to my pre-ACA plan is in the Bronze area although requiring a move to a HMO instead of PPO.   Despite the higher costs, I’ll probably go with a Silver or Gold plan.

However, I am not ok with the idea that I would have been stuck with these choices when I was younger.   Starting early in a career with little savings, these plans pretty much cut off the option of not working for long periods.   It is my nature to want to avoid burdening any body and that includes accepting subsidies from government: I will force myself to work in order to avoid taking advantage of government entitlements.   I have priced the plans in my area for people half my age and they are ridiculously high for someone who wants the freedom to not work.  I would not take subsidies nor would I accept medicaid, I would pay full price and that would not be acceptable and that would mean tipping the balance to keeping a job — the same kind of job-lock of relying on an employer plan.  At least in my experience, I very much regret that my government is preventing the options of more affordable and age-appropriate insurance policies for young people starting their careers that likely be completely unlike their initial employer’s business.

Another observation about the health insurance is that it is month-to-month.  My premium only applies to the current month.  Whatever expenses I incur during the month are covered by the premium of just that month.  All of the history of previous payments has no relevance to paying current expenses.  If I go 10 years at a gold level and then due to budget constraints drop to a bronze level before needing care, my coverage will be at the bronze level.   More than that, the expenses are paid basically from everyone else in the same plan paying their premiums for that month.  This assumes that when I do need care, there will be a majority of policy holders in my plan who do not need care.  If the plan doesn’t have the right mix of healthy and unhealthy people, then it would not be able to pay expenses.   Since this all goes to risk calculations, what about the risks that lots of people drop out of health insurance before I need care?  What about the risk of a pandemic that would either cause most subscribers to need care at the same time, or most not being able to pay their premiums.   I mention these only as a risk that the health insurance may not be available when I need it just as worthless to me as a scenario where I would need care before it could be practically delivered.   Health insurance can not cover every possible scenario of my needing health care.  This is an argument that there is some upper limit of the value of this insurance.  If I’m in an accident and die before an ambulance reaches me, my health insurance did me no good at all.  The calculation of the relative risks and potential value of health care I will receive is very complicated.  I am not confident I can calculate the precise best price for the potential risk and benefit.  I am also not confident that my government can.

I am moved by the fact that there are some people who need health care and are not getting it because of lack of insurance.  I am also willing the dismiss the problem of some people who are consuming health care services excessively or unnecessarily.  So let me be charitable and provide a fund to pay for current health needs for people who currently need them.   Health insurance doesn’t quite do this.  I repeat my above observation that the current month’s premiums are used to pay for the current month’s expenses of others in my plan.  I would like to approach health insurance with a charitable mind and so I would pay for the highest costing plan that I can afford.  But it doesn’t work charitably because that plan only pays for other who participate at that level.  Instead, I read people with known health problems signing up for the lowest premium plans.   I don’t argue with their choice, but my charitable mind is not helpful because my money is in a different plan or my charitable value would amount to less with by participating in their plan.  Furthermore, my charity may be misplaced in any case because those in my plan may have sufficient assets that not really need my help.

I have no way of knowing the charitable benefit of my premium so I have to pick the health insurance based purely on my own assessment of my risk for need for health care.  That assessment is difficult to me because I don’t really understand what I am paying for.  Any expenses I need for this month will come from premiums paid by my co-plan subscribers this month.  Meanwhile, from a purely selfish risk assessment, the available options do not quality as insurance.  I’m reluctant to use optional non urgent health care and I’m generally healthy with a relatively low risk lifestyle.  From a purely insurance point of view, I’d place a reasonable premium at about the level of my pre-ACA plan or about 30-40% of the available ACA options.  If the options exceed justified expenses for insurance, then the options are something more than insurance.  In fact it is more than personal insurance and as discussed above it doesn’t qualify as charity.  The excess is a transfer of wealth to others I have no reasonable way of knowing they are using health care responsibly and budgeting their health care responsibly with their other expenses.

Personally, I will go along.  I will do this not because of any economic terms (in terms of dollars) but instead because I have other things I want to be doing with my time.  The increased costs only means that I have less time to get that done.

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