Personal reflections on Costs of Affordable Care Act policies

My situation of non-employment places me into the individual health insurance market, so I’m very much paying attention to the developments of the roll-out of the Affordable Care Act.

For me, I’m factoring in my participation the in the plans by budgeting the expenses with zero income.

Compared to my earlier individual-market plan, the comparable ACA-compliant plan is about 2.5 times as expensive (150% more) than what I had been paying.   That’s noticeable and discouraging.  But I have come to accept is as a tribute I pay to the government (by way of the insurance companies) for the privilege of living.

In considering how to pay for it, I’d probably drop my cell-phone and cable TV services to help pay for it, if I had those services to begin with.  I don’t so I have to look elsewhere.   I guess I could drop my Internet service and get rid of my car.  Both are sort of optional where I live and the costs about add up to the additional costs imposed by the new law (at least as of today).   If it comes to that, I’d consider it.  Alternatively, I can move to a cheaper place, but that pretty much means leaving the area entirely.

Bottom line is that for my purposes, I don’t like the additional costs but it is not yet at the level where I’d throw in the towel and say I can’t afford it at all.   That may happen later this year if some of the stories about doubling again of the rates that may be needed  to accommodate the older/sicker base picked up in the first year.

I found it curious when I compared plans and added the total year’s premiums plus the total out-of-pocket maximums, there really wasn’t much difference between the different plan levels.  I shopped for health insurance plans before and there was a much larger difference between total expenses in different plans.

I think there is an built in assumption in the plans that you will be sick and need care.   This certainly comes up in debates.   The shock hypothetical is the person getting a low cost plan and not being able to pay the deductible as if there is near certainty that that outcome will happen.  If I were convinced I need a lot of care, I’d get the costly zero deductible plans because it makes more sense to factor in a constant payment rather than a random one: at the end of the year the cost will be about the same.

The point of getting a high deductible plan is because I do not intend to use it.   If something major comes up, then my life is pretty messed up in any case and I factored in that I’d have to make changes to absorb that hit.   The problem with the new plans is that the higher deductible no longer represents a big bargain compared to the lower deductible plans.

One of the problems with the law is an expectation or even a strong encouragement to use medical services.  Certainly the parts concerning preventable care such as multiple low copay doctor visits per year, free annual physicals, free routine diagnostic tests, etc.

This comes under the theory of an ounce of prevention is worth a pound of cure.  I don’t believe that is true, but I’m no longer to able to act on that.   Preventable care is not as free as they are advertised.   A simple doctor’s visit usually costs a half-day of disruption of normal plans due to the wait and transit times.  If there is are free tests, then there is the additional time to check the results on a later day.  That is not so bad unless something concerning shows up.   Most tests have a fairly high rate of false positives and receiving one of those forces you to enter a period of concern that maybe this could be bad.   I’m prone to worry and this kind of news does put a drag on routine living.   I know because it has happened.   Sure, I’m relieved later tests ruled it out, but those tests required additional time to take and there was that period in between that was unnecessarily impacted.

This is trivial griping if in fact I were ill.  And of course at some point I may become ill and I will not be griping about the inconvenience.  But this would be illness care, not preventive care.   Personally, I’d like to avoid medical care as much as possible as I have other things I want to do with my time.  I don’t like the idea that my schedule needs to accommodate fairly frequent routine preventable care (quarterly doctors visits and annual physicals seem excessive).

Another misleading figure is that so-called out of pocket maximums.  First they mention these without mentioning all the premiums.  For someone like myself (unemployed) who is paying everything out of pocket, the premiums are a minimum out of pocket expense with the maximum out of pocket being on top of that.   As I mentioned, when the two are added together there isn’t much different in the different plan levels when comparing the same type of plan such as a PPO.  My objection is that out of pocket maximums are maximum you have to pay for covered expenses, they do not apply to non-covered expenses.   There may be a higher out-of-network maximum that you may need to use for some type of care.   But more worrisome is the wildcard of non-covered expenses, usually involving unapproved expenses that you are responsible for (bill collectors will come after you for) or certain medications not on the list covered by the insurance.

Sometimes these uncovered expenses are high but they get dismissed in the debate because there is an assumption that if you pay anything for something resulting from healthcare it will count toward the deductible or coinsurance.   If the expense is not covered, the cost doesn’t exist to the insurance.  You are on your own.  Some autoimmune medications are extremely expensive and not covered and opting for those could still bankrupt you (despite the promise the medical-care caused bankruptcy is a thing of the past).  Certain other disease-management medications are similar especially if a special formulation is needed to avoid unmanageable side-effects.  Disease-management means it will never cure you, and you’ll be stuck taking it the rest of your life.  If you end up with that kind of problem where health insurance will not help, then all the premiums are pretty much a waste unless you are unlucky to come up with something else that is covered.

The law enforces a limit on risk tolerance.  The argument about sub-standard plans that the patient doesn’t understand pretty much dismisses anyone who is making the conscious choice to balance risk with opportunity to be free from having to work so hard.  Before the new law, there were plans that would cover most remotely possible risks but would be exhausted in the highly unlikely worst case scenarios.   In effect I was agreeing with the idea that if things got that bad then I’m pretty messed up and might as well accept my fate in bankruptcy or no access to care.   Modern medicine can do a lot of amazing things but that doesn’t mean it has to.

The law insists it has to pay for any possible outcome.  It supposes that I wasn’t really honestly making a risk calculation.  It is insulting to be told that I’m gaming the system.  Maybe I will demand it, but that doesn’t mean my demands have to be met.

There are occasional stories of demands for extreme intervention getting met by placing a burden on public.   Usually these are sympathetic cases with added pleas from a nuclear family members (spouse and children).  I don’t have that leverage.  Unless I become some kind of superstar celebrity I’m not not likely to get that kind of attention.

Despite the promise in the plans, it is still possible that such extreme needs will not be met.   One reason extreme care is so expensive is  because of the severely limited capacity of the health care system for that condition.   Having insurance that will cover the expense doesn’t mean there will be an open slot available to give that treatment.   This is true for example in the case of organ transplants.   Insurance is not going to solve the shortage of organs.  If you can’t get that slot, the additional premiums you paid was wasted.

Finally there are a significant number of ways of dying where health care is not going to help at all.   Some number of people will die at the scene of some accident.  Statistically, this is more likely than getting some treatable medical condition that will exhaust reasonable lifetime maximums of a lower cost insurance.  And there is the risk of mass-destruction events that can overwhelm the health care system with urgent care patients.  Health insurance is not going to be of much help in these possible events.

Perhaps it is true that health insurance law has minimal impact on people who are employed.   It has a big impact for people who voluntarily avoid employment.


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