Choosing the right health care plan for you or your family can seem daunting. Add COVID-19 to the mix and no doubt you look at health care differently. While many health insurance companies have waived co-pay and treatment in some cases for COVID-19, other conditions you or your family may be dealing with are still handled per your current plans evidence of coverage.
Added to this, we are in an election year, where the Republicans are suggesting to repeal and dismantle the Affordable Care Act (ACA) and Democrats want to evaluate what is working and what is not with ACA, and make changes as is appropriate.
Both options may affect the plans you can choose from, the care your family can receive and ultimately how this impacts your budget.
For more information on where the presidential candidates stand: Savvy Health Care Consumer – Health Care Reform
Making Smart Decisions
The cost of health care has risen over the years, averaging 8%-10% of a families annual income. Understanding the different plan types, metal tiers, deductibles and asking the right questions regarding the fine print and what they cover and what they don’t, based on your family’s needs is essential.
Refer to average monthly/annual charge per state: Value Penguin: Average Cost of Health Insurance 2020 You can also find average charge by metal tier and plan type.
For additional reference on plan types and understanding basics refer to:
Health Care Enrollment – Understanding Plan Types
Understanding the different plans while factoring in the potential impact of the future of ACA can be hard to navigate and predict the impact to your finances. As you are evaluating and casting your vote for 2020, consider the positive and negative experiences of two families with ACA.
The ACA – A Story of Two Families
ACA Impacts – The Negative
One couple Jennifer and Keith have been impacted with higher premiums and out-of-pocket costs and taxpayer dollars being spent, but not in a way that provided their family with relief. Jennifer and Keith are in their 40s and have two teenage daughters. With Keith being self-employed and Jennifer working for a nonprofit, they purchase their health care on their own in the state of North Carolina.
Pre ACA
They paid approximately $7200 for an annual policy with good benefits, but with limited mental and maternity benefits. In addition, they went through a screening process applying for health insurance as these companies were allowed to do so pre-ACA, thankfully they were able to get coverage. Others may not have been able to purchase a plan since insurance companies could screen potential members and deny coverage if they were at high risk for illness or pre-existing conditions.
After ACA
With the consumer protections (pre-existing conditions) and all people covered, inevitably insurance would be more expensive due to covering medical expenses for individuals who have never had coverage leaving insurance companies to increase their premiums. For Jennifer and Keith their premiums did go up to $9,600 being that they fell in the one-third of the population that would be impacted with an increase. They were also affected in that insurance companies were pulling out of markets, leaving limited options for consumers. Jennifer and Keith experienced this and chose a new plan, and one of the only options available leaving them with a $12,000 annual premium that increased over the years to $20,000 with a $10,000 deductible leaving their family concerned if any serious medical injury occurred, this could be a huge financial burden for them.
Why the increase? Insurance companies did not judge the market accurately considering healthy people signing up versus opting for paying the penalty for no insurance and the newly insured needing more healthcare than accounted for, resulting in a loss for the insurance companies and an increase in premiums.
Jennifer and Keith appreciated the goals of ACA to provide insurance for all, but the impacts to some were not considered and impacted their family financially
ACA Impacts – The Positive
Claire and Allen who also live in North Carolina say the ACA had provided options that have allowed care for their daughter by getting life changing health care, while making it affordable and not causing financial devastation for their family.
Claire became pregnant and experienced issues resulting in a difficult delivery requiring a blood transfusion, surgery, rehabilitation and medication. Their daughter Holly experienced several health problems, including cancer of the eye. Allen has a congenital condition, predisposed to skin cancer including monitoring and semi-annual biopsies.
Because of job changes and illness, Claire and Allen did not have employer insurance and had to purchase plans through the ACA. They also qualified for a tax credit minimizing the burden of the monthly payment, and they also qualified for assistance with out-of-pocket costs. They ended up paying $3000 annually for their premium.
Pre ACA
Claire and Allen would struggle with getting an insurance company to cover them, given pre-existing conditions and high risk for illness. If they found an insurance company, their premiums could potentially be $10K plus with a significant deductible. The family could not afford the care for Claire possibly resulting in blindness or spread of cancer. Without Allen monitoring his skin condition, it could result in a higher risk and more expensive cancer to treat such as melanoma.
The more expensive the treatment, the higher the premiums the insurance payers charge impacting ALL policy holders.
After ACA
While the plan helped, it had limitations. Claire and Allen dealt with the insurance company for the first year, going back and forth as they refused to authorize the surgery Claire needed. There was no mental health option to allow Claire to be treated for postpartum depression.
The plan had its positives in that it included the specialists needed, and most of their medical bills were covered with minimal impact to the family budget.
Their experience with ACA has been positive and if this care wasn’t an option, they would likely go without some treatment, preventative care and rely on community centers for help.
Winners and Losers – Repeal of ACA
I always state I am not promoting either side, merely providing information that I hope is helpful to consumers to make the best health care decisions.
If ACA is repealed while some may find relief, others would have to go without care.
There are some proposals on the table by the Republicans:
- Redirect the financial assistance the ACA provides.
- Eliminating tax credits and replace with flat credits that would vary by age yet limited to cover the rising cost of health care.
- No assistance for out-of-pocket costs.
- Limit mental health and potentially no longer covering pre-existing conditions, still up for debate.
- Create alternatives for coverage and reduce high premiums.
The ACA was the first significant change in health care since Medicare was created in 1965. There is no doubt opportunity for improvement is needed, but to repeal could be a drastic impact to consumers and the health care industry. Perhaps reevaluating what is working and what is not and finding solutions that benefit ALL is a pragmatic approach to address both the positive and negative of the ACA.
Additional Sources:
Affordable Care Act Repealed: What it could mean to you
The Story of Two Families and the Real Impact of Obamacare Repeal