My ObamaCare Decision: Defer Until Next Year!
As recent readers to my blog know, I’ve been going through the process of collecting information to make a decision about my family’s health insurance needs for the future. And since there are so many of you that have been following along, both for entertainment value and for personal information, I figured it was only fair that I publish the decision I made, and why.
To recap: I’ve been buying health insurance for myself and my family on the individual market for the last 12 years (actually longer than that, but there was a break in the middle when we bought a group plan for the company while running Computer NERDZ! in Austin, but I was the point-man on buying that plan, too). We’re fortunate that we’re relatively healthy, and have (almost) always been considered “low risk” by the insurance underwriters. We change plans every year or two when costs start rising, but essentially we’ve always had the same type of plan.
ACA introduces a huge wrinkle into this for us, as I’ve detailed elsewhere. In short: ACA plans are currently priced at about double what our current plan costs us.
Our current insurance plan is set to run through July, 2014, after which it will be canceled if I take the letter I received at face value. At that point I’m still mandated by ACA to carry coverage so I would have to buy an ACA-compliant plan starting August 1, 2014. And unless those prices come down between now and then (in New Hampshire I don’t expect them to change in either direction), I’ll wind up paying nearly double.
My insurance company offered me the chance to renew my current plan early on December 1, 2013. As I understand the law, they are not allowed to renew my existing plan after 2014 starts because it doesn’t fit the ACA requirements (we choose not to carry maternity or mental health prescription coverage – the premium costs don’t pay off even if we needed the coverage), nor will New Hampshire participate in Obama’s attempted one-year cancelation reprieve (some other states will).
Early renewal will raise our premiums by $46/month (from $487 to $533 for a healthy family of four). Eight months of that (December thru July) comes with an opportunity cost of $368. That number actually goes down when you factor in what even a normal 20% renewal increase would cost me if my plan were to be renewed on August 1, 2014. In the end this is a $164 gamble, spread out over 8 months. And that $164 gamble guarantees me an extra four months of coverage on my existing plan. More importantly, it guarantees me predictable coverage (and rates!) up to within a month of the start of 2015, when it’s possible new ACA laws/conditions and, most importantly, rates may go into effect.
I’m hopeful that by 2015 we’ll start to see some reality factored into ACA rates. Right now the insurance companies are doing a lot of guessing (and with all the changes in the law and the politics, I can’t blame them!). No one really knows how many people are actually going to buy coverage despite it being mandated. No one knows who those people will be. NHPR did a helpful infographic where they show how the high risk and individual pools are being merged in our state, and they also predict that in 2016 there will still be 41% of the people not choosing to buy insurance (despite the mandates). If correct, that’s astounding to me. Isn’t the whole point of ACA to ensure everyone is insured?
If anything significant develops that impacts my thinking on this you’ll hear about it from me. But don’t expect daily or even weekly updates now that I’ve made my decision. My goal here is not to preach… just inform about what I’m deciding for myself and my family and why. Either way, I’ll certainly have more to think about (and say!) in 11 months as I decide what to do for 2015.
November 30th, 2013 at 7:01 am
Hi Dave,
I’m glad you get to renew your plan for another year. Unfortunately I’m afraid that in 2015 the costs might be even higher due to a lack of young healthy enrollees. Today I saw Obama say that this plan is good for the young and the entrepreneurs, and I seriously laughed. I had an individual high deductible plan for myself and my son. I’m 30 so the premiums were 112/month and for my son it was 76. We live in the Silicon Valley. Earlier this year I got a letter stating that my son’s plan is now greatly enhanced with maternity care and birth control. I thought that was ridiculous, and then we got letters of cancellation since our plan expires in june. I was doing contract jobs that allowed me to work just a couple days a week, but of course there was no full health insurance. I ended up getting a full time job that offered great insurance for my family. I looked up what premiums we would pay under obamacare and it is around 332/month for me and 192/month for my son, for a WORSE plan. previously my max out of pocket was 5000 a year and emergency room was $150 copay. Now it’s a 40% coinsurance for the emergency room and a 6350/year max out of pocket for the CHEAPEST plan. I still don’t understand why my son would need maternity care. My plan didn’t have pediatric dental, substance abuse, or mental illness care, but I’m really not a crazy druggy with childhood teeth problems so I didn’t need that coverage. This whole thing is insane. I do enjoy my job now quite a bit, but I feel that obamacare is actually gimping the freedom of young entrepreneurs. I made enough money to not qualify for a subsidy, but we were doing quite fine before the law. I saved a lot in my HSA and never used it up. If a serious illness hit then we would have a $5000/year max out of pocket, which I already had in my HSA. So yeah, we’re doing okay, but other families that live in the silicon valley but do not have employer health insurance will take a big hit. $94k for a family of four doesn’t go very far here, and our premiums are probably the most expensive in California. Anyway, I have seen some reports amongst my friends that they will benefit from this law, but generally it’s from those who would get subsidies or had preexisting conditions. So yeah, I guess we are the losers. Good luck. I’ll check back in 2015 to see how you are doing.
December 6th, 2013 at 2:08 pm
Dave,
I just commented in an earlier post about how the government is now in the business of picking winners and losers and enumerated what I think is a small subset of the ways that you have been chosen, time after time, as a loser during the rollout of the ACA. Today it looks like you’re one of the few winners. I say few because you’re in a state where this was allowed (many states have not allowed it) and your plan was with an insurance company that offered it (many insurance companies won’t). So, kudos. And yeah, most importantly, for your family. But a lot of people who have lost their plans in exactly the same way that you have will not be "saved" by the president (though even you admit this in only a temporary bail out). How does your liberal sense of fairness and justice jibe with the fact that the government fixed things for you and another select few and left the rest stuck in what you have already admitted was a bad place? Better yet, can you please explain to me how you feel about the fact that you have that policy, which is now illegal, because the president strong-armed a private company (do you know the definition of fascism) to give you an illegal policy because he’s "fixing" a lie he knowingly told dozens of times in the run up to passing this law, and that he has absolutely no Constitutional authority to alter the law in that way? Do any liberals, any more, even understand what the phrase "constitutional crisis" even means?
But I guess it’s all good if it worked out for you today?
December 6th, 2013 at 2:26 pm
Hey, Merrick — Oh, I’m not happy at all. I just found a (temporary) hack that lets me not have to worry about this until next year. In the mean time I’m going to spend my energy working hard and figuring out how to make a lot more money to pay for the situation I’m stuck in. It’s the one part of this crazy situation that I can personally control (to a degree, anyway!). And if I put on my tinfoil hat (I do emotionally support all conspiracy theories) I realize that’s part of the goal, too: prod those of us who have learned how to make money into making more money and … paying more of it into the system. At least up until the point that we’re paying so much into the system that it’s not worth working hard to earn more anymore. And perhaps THAT’s part of the conspiracy, too. 😉
But I’m NOT happy where any of this is going. And as for my "liberal sense of fairness and justice" — I’m not sure what you mean by that. I certainly didn’t vote for Obama (nor would I have voted for Romney… I wound up voting for one of the Libertarian candidates here on the NH ballot last time around).
Our biggest problem with healthcare is chosen ignorance. No one seems to know or care what doctor’s visits and tests cost. Everyone wants to pay their $30 copay and be blind to the continually rising costs.
There is one thing that does give me hope, though: I have a very intelligent friend who doesn’t make very much money. He’s single and, all together, has never carried health insurance for himself. I had dinner with him the other night and we were talking about ObamaCare and I mentioned, "you know.. it’s going to cost you money, too." He looked puzzled. "Well, you’re now forced to buy health insurance whereas previously you could go without." His reply was, "yes, but I’ll get so much more out of it." When I queried this last part, he explained that he’d now be able to go to the doctor and it would be covered, etc. He’s signed up for a bronze plan. That’s got a pretty high deductible, even with his subsidy, so I think he and a lot of other people are going to get a hard dose of reality when they visit the doctor for the first time under ObamaCare and realize they basically still have to pay out of pocket for the visit.
I explained to my friend that he likely will never hit his deductible, so he’ll be paying premiums and paying for whatever healthcare he chooses to get.
And while I wasn’t necessarily happy to burst my friend’s bubble (ok, I was happy :), I am very much hoping that this brings some general awareness to the costs of care. That’s where we really begin to fix this problem, though I’m not so naïve as to think that it actually will.
So… I’m back to working harder and doing my level best to keep as much of the money I earn for myself, my companies and my employees as possible.
December 12th, 2013 at 3:26 pm
So, I guess you think I wear a tin foil hat?
Glad to hear you didn’t vote for Obama in 2012 – but you didn’t tell us what how you voted in 2008, did you?
I know I don’t really have the right to hijack a thread, per se, but you also avoided discussions of what it means in the bigger picture that Obama, for instance, rail against Republicans for their disrespect for the law, their war on the "people", for suggesting that there are so many problems with the ACA that the mandates should be delayed for a year (and suggesting to do so in the completely Constitutional and appropriate way) then admitting, yes, we completely scewed the pooch and with 3 years and over a billion dollars couldn’t even launch a website, so I’m by fiat doing what I decried as outrageous when the Repubican suggested it – just a few weeks ago – and delaying the mandates and sign-up deadlines – in a completely illegal and extra-Constitutional way.
Do I wear a tinfoil hat because I understand the various authorities and limitations of the various branched of government?
We completely understand you’re unhappy about your temporary hack but I for one and I bet a lot of others are one heck of a lot more interested in how you feel about the fact that your hack is unconstituional. Or would commenting on such qualify as tinfoil hat banter?
December 12th, 2013 at 3:37 pm
Merrick – I’ve never voted for Obama. Not sure where that comment was directed. Are you trying to pigeonhole me as a republican or democrat? If so, good luck! 😉
I think congressional term limits are the answer here. We are no longer represented "by the people." We are represented "by the professional politicians." Our needs are no longer aligned by default. Sure, we could find some politicians who truly are in it "for the people" but… (a) that’s not true of the majority of them and (b) will those that are currently in it for the people remain that way through their careers? Or will they eventually start looking at retirement and prioritize #1 over USA?
You point out some specific examples of the two sides bickering, and if I had to guess I’d say that you’re a Republican supporter and an Obama hater, but that’s just an inference, not an attack.
I hate all sides equally. I dip my toes in when it affects me, but otherwise I have no time for these career politicians. Let someone be a shopkeeper or an attorney, then go spend 4 to 6 years serving the people, then come BACK and be a shopkeeper or attorney, living in the world you just created. Then and only then will we have any chance at getting this right.
December 12th, 2013 at 4:05 pm
Yup, I expect employer-organized plans to become the minority within about 3 years. It’s a major headache for most corporations, and with underwriting not part of the equation anymore there’s no reason for companies to hold these plans. People can buy whatever insurance they want on the open market now. You no longer have to be employed to get covered for a pre-existing condition. There are negatives associated with that for those of us that don’t have pre-existing conditions (and I’ve blogged about them elsewhere), but that is an effect of all this.
For me that’s perhaps the silver lining because it means more people playing in the sandbox I’ve been living in for over a decade. And that will breed some competition and offset the cost increases I’ll (temporarily?) see by the lack of underwriting in the individual market.
I hope. 😉
December 15th, 2013 at 2:36 pm
I’m also taking a wait and see approach. I’m consulting again — after 10 years with the same employer — and have the benefit of paying COBRA rates ( YIKES! ) for a while until things settle down. Based on what was offered through ACA I’m better off paying COBRA for now.
December 15th, 2013 at 2:44 pm
"We are no longer represented "by the people." We are represented "by the professional politicians."
….
"I hate all sides equally. I dip my toes in when it affects me, but otherwise I have no time for these career politicians. Let someone be a shopkeeper or an attorney, then go spend 4 to 6 years serving the people, then come BACK and be a shopkeeper or attorney, living in the world you just created. Then and only then will we have any chance at getting this right."
Agreed!
December 16th, 2013 at 9:05 pm
Hater?
Thogh I appreciate your points on term limits, they miss the fundamental point. We lost the Republic when we lost the Republic. When "democracy" raised it’s ugly head and career politicians did everything they could to promote it is when they took real power. It’s all about buying votes at that point. We didn’t need term limits before the rules were changed to make it a simple popularity contest and term limits treats he symptom and NOT the disease.
As Benjamin Franklin famously said, "Democracy is two wolves and a sheep voting on what’s for lunch."
December 23rd, 2013 at 5:58 am
I appreciate your thoughts, Dave! They’re well thought-through and articulate.
I’m almost 24, the oldest of four siblings, and my parents and I are small business owners/entrepreneurs. Since my dad left the corporate ladder back in 2008 (and consequently leaving his company’s healthcare benefits), we’ve been members of an incredible organization called Samaritan Ministries (http://samaritanministries.org/intro/).
Now it’s an unashamedly Christian organization, but I encourage you to take a look nonetheless.
Here’s a quick sum-up: we pay for nearly every small doctor/dentist/random check-ups out of pocket. Anything up to $300 we pay for.
After that, for anything $300 and up, we submit a need (usually after we go ahead and pay the bill in full.) By the way, you would be absolutely FLOORED to see how hospitals and clinics treat people based on whether or not they have insurance. My mom, for example, needed two blood transfusions and a couple of days stay in the hospital for both instances in 2011. After inquiring, we found that if we had insurance, the total bill would have been $10,000+. From that point, the conversations went thusly – "Oh you don’t have insurance? Ok. Your total then is $5,000. Oh, you can pay $4,200 today? Oh, CASH?! Done."
Then we would submit the bills and all necessary paperwork to SM. Within two weeks, everything was payed for! People we didn’t even know sent get-well cards and very kind notes of encouragement – and checks! Now it is pretty strange getting check after check in the mail with no small amounts written on them, but it worked. Flawlessly.
The best part is that SM is exempt from the ACA.
Great blog as well! Keep up the good work.
December 23rd, 2013 at 6:52 pm
Yet more late rule changes. I guess President Obama is trying to narrow the sheep pool down before the next election…
December 23rd, 2013 at 6:56 pm
Hi Micah,
That’s a great story and thanks for sharing it. I just hope that "rule changes" don’t un-exept you from ACA in the future. And I’m really glad to hear about this option. I wil ldefinitely be looking into Samaritan Industries for family health when the ACA starts eating all corporate plans in the future.
Thanks again!
Merrick
December 23rd, 2013 at 7:33 pm
Oh,. Wait, I didn’t even see this until just now. The administration has extended the enrollment deadline for coverage starting 1 January yet ANOTHER 24 hours. From the Washington Post:
"Over the weekend, government officials and outside IT contractors working on the online marketplace’s computer system made a software change that automatically gives people a Jan. 1 start date for their new coverage as long as they enroll by 11:59 p.m. on Christmas Eve."
I guess employees of insurance companies don’t need their Christmas vacations and insruance companies can clearly now count on the fact that the "rule of law" is a quaint old concept that simply doesn’t apply to them.
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