My mom recently called me in a panic because she and my father lost their insurance. My dad was covered through his job, but because of a buy-out, the new employer decided to change to a more "cost-effective" insurance option that's becoming increasingly popular because of the ACA and the so called "cadillac tax" that takes effect in 2018. To avoid being taxed because of offering employees health insurance plans that are expensive, more employers are scraping the bottom of the barrel and coming up with bronze-level plans, or high deductible plans.
With these high deductible plans, an employee must meet an out-of-pocket deductible that often falls into the $4,000 - $12,000 range before the insurance kicks in. While they are meeting these high deductibles, they are still paying health insurance premiums.
For an older individual that gets several prescriptions and goes to the doctor frequently, meeting the deductible may be realistic. However, for healthy, young individuals, that's just not going to happen. For many young families, meeting a $6,000 deductible while paying health insurance premiums is more than the family budget can sustain.
To help offset costs, employees are encouraged to set up an HSA account to pay for the deductible. While the money is from pre-tax dollars, it's still shrinking the paycheck while health insurance premiums are still being withdrawn. For many people, meeting the deductible won't ever happen, so the premiums are basically just a waste since they are paying out of pocket for doctor's visits, prescription drugs and other health care costs.
Lets look at a family with young children for example. The family consists of a dad, a mom and two young kids. They get insurance through the dad's employer, who suddenly begins only offering high deductible plans. They previously had an HMO. Under the HMO, they paid $500 per paycheck for health insurance, or $13,000 per year. Under the new high deductible plan, they'll pay $300 per paycheck for a total of $7,800 per year. Unfortunately, their plan has a deductible of $6000 for the family, so they actually need to pay $13,800 before the insurance pays out. That's not any better than the HMO, but now the family tries to avoid seeing the doctor for sick visits in an attempt to save money and as a result, a small condition may blossom into something much worse. A fever in a toddler could wind up being an ear infection that costs them their hearing because the parents tried to wait it out to see if it was worth spending the $185 on an office visit.
You see, if you need to spend several thousand dollars out of pocket before your health insurance kicks in, it's a lot like not having health insurance. Most families won't ever meet the deductibles required for insurance benefits to begin. As a result, people are going to avoid seeing the doctor and seeking treatment until conditions have deteriorated greatly. The people that will suffer the most are children, since young families are often strapped for cash.
As a parent, I can say that when I had my first child I was worried about everything. I brought her in to the doctor over mysterious rashes and fevers that were sometimes serious and sometimes nothing. I had no idea what was from teething and what was a sign of an ear infection and my doctor didn't want to dispense advice over the phone for fear of malpractice. When finances were tight, I was able to justify the $25. I could find places in the budget to make it up. If the cost had been $185, I wouldn't have been able to find places in the budget to make up the difference and I would have really had to think twice about bringing her in, potentially putting her health at risk if it was the time she had an ear infection or the time the rash turned out to be a penicillin allergy.
Back to my parents. My dad is a heart patient. He had 6 bypasses in 2007 and had a valve repaired at the same time. He sees a cardiologist once or twice a year for a check up and takes a host of expensive medications to regular blood pressure and other complications of heart disease. My mom also takes medications and sees the doctor regularly for her conditions. Under their new high deductible plan, those medications won't be covered anymore. Neither will the visits to the doctors until they meet their out of pocket deductible. Furthermore, the premium for their new health insurance won't be significantly less than their old health insurance. The increase in medication costs is greater than the savings on the cost of the plan, which means they'll be paying more.
My mom has already made plans to stop taking non-essential medications, like those for allergies, migraines and basically everything that's not life-threatening. My dad on the other hand will probably have a heart attack if he stops taking his medications. He's not sure how he's going to afford them and he's too young for Medicare. To help make up the cost, they're considering dropping their insurance and taking the penalty. That way, they can negotiate costs with their providers directly and save the money they would spend on premiums to go towards medications and doctors visits.
It's like my mom said, they want to take away all of the benefits of health insurance, but not the cost.
Unfortunately, somehow through all of this, my mom still doesn't see how the changes in their insurance and coverage is a direct result of the ACA. She still maintains that Obama is a great president and she still identifies with the Democratic party. She even tried to blame this one on the Republicans, which I couldn't figure out since Democrats were in charge when this was forced through. The ACA is the main reason I no longer identify with the Democratic party - they really didn't have anyone's best interest at mind when they forced through a huge law like that without thinking of the consequences. It's easy for politicians to play with everyone else's health insurance when they themselves use a different system.
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