“Open Season”

Late October into early November means a lot of important events and seasons to many Americans.  It is time for the World Series, (could the Cubs really win?), the Presidential election, and deer and duck season for hunters!  November 1st starts the “open enrollment” season for healthcare under the Affordable Care Act, aka: “Obamacare”.

November 1st-January 31st are the only 3 months individuals can either sign up for or enroll and apply for a different plan, unless one meets one of the exceptions to this rule.   Some folks will want to change their plan.  Others are being forced to apply for new coverage as their current insurance plan will no longer be available in their state.  (This is the case for many in Missouri as Coventry,  a major provider in this market, has pulled out of the Federal Exchange.)  Still others will be applying for the first time even though it has been a legal requirement to have this coverage but for whatever reason they have decided to not comply in the past.

PENALTY:  The current penalty for not complying (not having) individual health insurance is approximately $700 or 2.5% of gross income.  The IRS is responsible for auditing this part of the plan and now that real penalties are being imposed, many Americans will be impacted, who prior to the penalty phase were not taking this part of the Affordable Care Act seriously enough.  It should be noted that the penalties are still far less in many cases than the premiums charged, so if you are healthy and younger, it would seem not having the coverage is much cheaper than actually complying with the ACA.

AVAILABILITY AND NETWORKS:  As recently as 1 year ago there were four companies providing individual policies on the Federal exchange in Missouri.  Anthem, Cigna, Coventry and United Health Care all provided options but due to mounting losses and fewer applicants than planned especially among younger and healthier applicants (see the small penalty imposed above).  Coventry and United Health Care have pulled out of this market in our state.  Choice of hospital networks has also been somewhat limited as the Anthem plan does not include the BJC (Barnes) hospital network!  Currently Cigna’s plan is only BJC plus St. Anthony’s in south St. Louis county.  In my opinion this is not the end of the world but certainly a change that most consumers have not had to deal with in the past.

PREMIUMS AND COSTS:  Rate increases are substantial this year and will most definitely be getting consumer’s attention!  This must just be in our human nature, many times we just do not pay attention until something really costs us.  An average family of 4 will have a premium of around $1,200 per month.  Even with an average subsidy on the exchange of 50% the out of pocket cost is $550-$600 PER MONTH.  with the Federal government subsidizing the other 50% of the premium.  If we connect those dots,  the subsidies do get repaid by taxpayers at some distant point……at least theoretically!

DEDUCTIBLES:  This is the single biggest issue that individual health consumers are just starting to grapple with as a new reality.  The average out of pocket maximum for on exchange individual plans is $6,850…..that is PER PERSON, PER YEAR!  The deductible alone averages $6,000.  Meaning until you have paid $6,000 per year your insurance is not really “kicking in”.  A real life example this year is a dependent child needing their tonsils removed and the parents paid out of pocket $5,890 for an out patient surgery center, without complications and a 3 hour total time procedure.  Lots of folks say to me, “what is the point of even having insurance with a deductible this high?”  It is very possible to reach two people (thankfully currently the maximum) in a family reaching this amount.  Very conceivably the gross out of pocket for a family COULD be $13,700 PLUS the annual subsidized premium of $6600 for a total cost of $20,300 for a typical family of 4 with an annual household income of $55,000 or so.  I am using a Bronze plan for this discussion. 

THE CURRENT MEDICAID-ACA GAP:  It is possible in Missouri to make too LITTLE money to qualify for any subsidy under the ACA…..AND unbelievably too MUCH to qualify for Medicaid.  Currently this amount is around $12,000 per year of income per person.  If you make less than $12,000 you make too little to receive any subsidy and I think it is easy to infer a person making this little cannot afford to pay the full premium for health insurance.  It seems reasonable and prudent to me that this gap needs to be closed.  The Missouri legislature can expand Medicaid, (which they have declined to do) or the formula for the subsidy should be lowered slightly.  No matter how we slice it up the pie, folks are going to receive care and for the maximum number of citizens to have coverage and be paying something towards that care is both just and economically prudent.

BENEFITS OF THE ACA:  There are many benefits, but I want to touch on just a few of these.  One we have the goal of providing at least SOME MODICUM OF CARE TO ALL CITIZENS.  Issues such as portability of the coverage or removing pre-existing conditions for coverage have been important enhancements.  Many important preventative screenings and tests are covered automatically at no out of pocket costs, these include mammograms, pap tests, colonoscopy, flu shots, immunizations etc…….

FINAL THOUGHTS:  Do you have health coverage?  Do you understand that coverage?  If not, find a health insurance professional to help you get to that level!  Crawford-Butz and Associates will gladly provide you with a recommendation!   Take care of your health to the best of your ability.  So many of the health problems that we Americans experience are life style choices…..I am sure we have all heard it a thousand times before but we smoke too much, eat too much and exercise too little!  I will see you at the YMCA and if you don’t see me, call me and remind me!!!