Navigating the Affordable Care Act

As my university job ends, and I continue to juggle medical issues, I have been scrambling to understanding insurance options.

My husband, Jerry, has decent insurance available for himself, but it gets cost prohibitive if he adds a spouse.  So part of the answer is we’re going to have separate policies.

My options are:

• Husband’s insurance, which is crap for me
• COBRA from the university, which will be incredibly expensive even factoring in the fact that I have met my deductible and out-of-pocket max for the year.  COBRA premiums are awful.
• The Health Insurance Marketplace set up by the Affordable Care Act (ACA)

As an Aside: I try very hard to not call the ACA “Obamacare,” as the term developed as a pejorative and is heavily politically charged.    It makes the ACA about a single political figure while deflecting that fact that it’s actually about affordable health care.

I’ve encountered a few issues:

• Vast amounts of misinformation, often created maliciously but now spread by recipients of such misinformation.
• The website is every bit as dumb as people say
• The Marketplace (also known as the Exchange) has not been properly explained even by its supporters

The following is my understanding of the Marketplace, including research and significant first-hand experience. I don’t claim to be perfect, but I hope it helps others navigate the new system.

Also, please understand that the ACA offers many plans (my area has 84) which vary significantly from location to location.  The examples I use come from experience of living in Wisconsin.

Over-Stressing Subsidies

I think the subsidies have actually been over-emphasized, because a lot of people are left with the impression they can’t use the Marketplace if they don’t quality for a tax break (subsidy).  That’s 100% wrong.  I don’t qualify for a tax break, but I’m still getting insurance.

If you qualify for a tax break, that amount will be included in premium estimate on the ACA website (healthcare.gov).  For example, a single 40 year old making $30,000/year can get a Bronze plan for about $100, while those who do not qualify for the break can get it for about $200.

Marketplace Insurance is Insurance

This baffled me for the longest time, and I have no one to blame but myself.  Politically, people have been using this statement to emphasize this is not government-run health care.  Insurance bought from the Marketplace works exactly like insurance bought through your employer, and it is managed by private insurance companies (Blue Cross, Humana, United, Cigna, Aetna, etc.) just like other insurance.

But the statement means more than that.  The Marketplace has an open enrollment period, just like other insurances.  During these phases, anyone (except those on Medicare) can purchase insurance from the Marketplace, even if they don’t qualify for tax-breaks and even if their employer offers insurance.

Wait, what? “I thought this was only for people without insurance.”  Nope.  This is about competitiveness.  If you find the Marketplace offers more affordable insurance, get the insurance.

The Marketplace is not just for low-income people, the unemployed and the under-employed.  This is an incredibly important point.

Special Enrollment Periods

The next open enrollment starts Nov. 15.  In the meantime, you may qualify for a Special Enrollment Period (SEP), just like with other insurances.  SEPs are awarded for “qualifying life events” such as

• Birth or adoption of a child
• Divorce
• Marriage
• Loss of employer-sponsored coverage
• Etc.

Here’s where things got tricky.  My job is ending, so my husband and I are losing insurance.  However, I can go on COBRA.  Does that mean I didn’t really lose coverage?  No, because my employer doesn’t contribute to COBRA premiums (that’s why it’s so expensive).  COBRA is not employer-sponsored.

My husband can get insurance for both of us through his job.  Does that mean I can’t use the Marketplace?  No.  I’ve lost my employer-sponsored coverage.  That triggers the SEP, regardless what else is available, both at Jerry’s place of work and in the Marketplace.  I can buy or not buy what I want.

I had to bother multiple phone reps to get all that drilled into my brain.

What happens when I get a new job that offers insurance? I can choose to stay on my Marketplace insurance, or I can use the one through my employer.  Just like my husband is not required to go on my new insurance.  We can both stay where we are, if we want.

This is how traditional insurance works, and this is how Marketplace insurance works, because Marketplace insurance is insurance.

Opt Out States

In the last month, I have encountered two people who thought states “opting out” meant people within the state had no access to the Marketplace.  This is also 100% wrong.

The “opt out” option for states actually concerns Medicaid.  States were expected to expand their Medicaid programs under the ACA.  However, the Supreme Court said states could not be compelled to do so.  Opt out states are states that didn’t expand Medicaid, which is meant to cover those who do not make enough to afford insurance.

What most people think of a state opting out is the choice to not run their own Marketplace. In these states, people simply use the federally run Marketplace.

You absolutely have access to a Marketplace in all 50 states, regardless whether or not your state “opted-out.”

Website Nightmares

How bad is it?  If you call for assistance and complain about the website, the phone reps will probably agree with you.  They may even spontaneously apologize for it.

I originally couldn’t get it to work at all past the log-in screen.  The answer was to switch from Firefox to Internet Explorer, which for me is like having to give up your cellphone for a rotary dial.

It’s difficult to navigate.  The questions are not always terribly clear.  Many of them relate to applying for tax credits, although that’s not obvious.  I never could figure out how to tell it I am going through a life event(losing my job) which makes me eligible for a SEP.  Luckily, I called the hotline and they granted me the SEP so I could continue my online application.

On the other hand, once you can view the policies, they’re very nicely laid out so you can scan summaries and then compare selected plans side by side.  I found that feature immensely helpful.

Phone Reps

I also give high praises to the phone reps.  They understand the chaos of the website.  Of the three I spoke with, all had a good grasp of the basics, which is their job.  One was particularly well-versed in things.  All were willing to send me to a supervisor when I requested it, and the supervisors were quite willing to spend considerable time helping me understand.

I don’t say that very often about phone reps.

It’s Too Expensive!

Many people have complained that the ACA has made insurance more expensive.  That may be the case for some.  But there are many others who find the ACA a tremendous improvement to their insurance situation.  There are people who insist the ACA won’t work for them even though they’ve never looked at a single plan.

Complaint One: I don’t need maternity and mental health coverage

The ACA is requiring insurance to cover a variety of services.  More services means more costs.  Yes, we don’t all need all of them, but anytime you buy insurance, you buy coverage for things you’ll never use.

Moreover, you don’t know what you’re going to need.  Yes, a man doesn’t need maternity care, but even if you’re in great health now, things happen.  Mental issues can develop.  A bus can hit you.  You can have a heart attack without warning signs.  These things are the point of insurance.  Insurance companies only started covering things like doctor visits and lab work because they figured out that those relatively small costs often saves them from paying for catastrophic medical events.

And while insurance can be expensive, catastrophic events (heart attacks, strokes, serious accidents, organ failure, etc.) bankrupt families.  Any surgery is almost assuredly going to cost tens of thousands of dollars.  My hysterectomy was $30,000.  My mother’s stroke/brain tumor was in the hundreds of thousands of dollars.  Thankfully, both of us had insurance.

Complaint Two:  That deductible is huge!

Insurance is complicated,  My husband goes cross-eyed trying to understand benefits.  So let’s make sure everyone is on the same page here.

Premium: The amount you pay for your insurance policy.  The Marketplace lists them as a monthly rate.

Deductible: The amount of money you pay out-of-pocket for medical services before insurance will cover anything.

Out-Of-Pocket Maximum: The most you will pay for medical services in a year.  Past that point, insurance pays everything.

Co-Pays:  A fee you might be able to pay for prescriptions and/or doctor visits even before the deductible is met.  Many policies offer generic drugs for $10, for example, regardless of deductible.  Once you meet the out-of-pocket maximum, co-pays disappear as insurance pays for everything.

Generally speaking, the lower the premium, the larger the deductible.  So the next question is: how often do you go to the doctor?  My husband generally only has his yearly checkup, which is now always free as per the ACA.  If you’re like my husband, the deductible doesn’t matter.  Whether it’s $500 or $6000, he’s unlikely to meet it, so it makes sense to go with low premium and high deductible.

If you’re like me, however, a $6000 deductible will bankrupt you.  So, instead, I pay a higher premium.  For $400 a month, I have a $500 deductible for the year.  So I have to pay the first $500 in medical costs (not counting a check-up, which is free, and prescriptions, which have reasonable co-pays).  After the deductible is met, I only pay 20% of my medical bills, up to an out-of-pocket maximum of $1250, at which point I don’t pay for anything for the rest of the year (except for my premium).

Examples of different plans:

	Monthly Premium	Yearly Deductible	Yearly Out-Of-Pocket Max	Minimum Yearly Cost (Premium Only)	Yearly Cost Before Deductible (Includes Premium)	Total OOP Max (Includes Premium)
Bronze	200	5000	6000	2400	7400	8400
Silver	267	1500	6350	3204	4704	9554
Platinum	442	500	1250	5304	5804	6554

If you get the above Bronze plan, and you never get sick, you will pay $2400/year in premiums.  However, no matter how bad your health becomes, you will not pay more than $8400 – a big chunk of change, but not the tens of thousands of dollars you might incur without insurance.

If I get the Silver plan, I will pay $700 more in premiums, but if I have some moderate bills, insurance starts covering most of it at $4700 (deductible plus premium) rather than the Bronze plan’s $7400.

Now, I personally know I will have significant expenses, so I am willing to pay $5300/year in premiums, which is way more than the other two plans.  However, insurance starts covering most costs almost immediately due to that $500 deductible (which I am guaranteed to exceed every year), and if I’m really sick, I stop paying after $6554, which is far less than the Bronze and Silver plans.  That’s a real possibility for me, while it isn’t for the average person.  Most of my medical expenditures are on the insurance premium in exchange for paying very little beyond that premium.

And, again, tax credits can lower these example premiums.

Where’s My Free Health Care?

No one ever promised free health care.  Even in countries with “free health care” a.k.a. “socialized medicine” a.k.a. “universal health care,” people are paying taxes to support it.  Nothing in life is free, and any possibility of universal health care was killed years before the ACA was passed.

Yet critics continue to use this as evidence of the failure of the ACA. The only people who claim Obama promised free health care are his critics.

Insurance Company Discounts

This is not directly related to the ACA, but it’s important enough to mention here.

Every insurance company negotiates deals with medical providers, meaning they pay less money that you would on your own for the same procedure.  Here’s how it works:

Dr. Smith wants to charge $150 for an office visit. ZZZ Insurance says they will only pay $120.  If Smith says no, ZZZ will not take him as an in-network doctor, and ZZZ policy holders will find an in-network doctor rather than Dr. Smith.  Now, ZZZ is a pretty small company, so Smith might tell them to shove it.  However, when a larger company comes along, he’ll be more likely to take a deal because it will give him access to large numbers of patients.

This discount between insurance and medical providers can be staggering, easily thousands of dollars in the case of hospital stays and surgeries. One service involved in my surgery was billed at $6882.  On my explanation of benefits from the insurance company, that number is under “Charged.”  Under “Allowed” is $3266.67.

Since I’ve already met my out-of pocket max, they will pay the entire $3266.67 and I will pay nothing.

If I was under my out-of-pocket max, I would have to pay some portion of that.

And if I had no insurance at all, I would pay $6882, more than twice what the insurance company was charged.

That alone is a reason to consider health insurance.