Good News Bad News

There sure are highs and lows when it comes to Obamacare news.

GOOD NEWS

I heard from a self-employed person in Benson that he got signed up through healthcare.gov for a Health Net Silver plan for $61 per month (after his subsidy). Because he lives in Cochise county his plan is a PPO that has the large, state-wide Health Net network. So he can see doctors in Tucson or anywhere else in Arizona.

Clay works hard at his business, but he has not had health insurance for a long time. I think he’s pretty healthy, but he hasn’t been to a doctor  in quite a while.  Now he can get preventive screenings and other services that will keep him healthy.

AFFORDABLE PREMIUMS IN TUCSON

I have helped several people enroll in health insurance plans without a subsidy. The premiums have been pretty reasonable and allowed these people to change from bare-bones, high-deductible plans to either a Gold plan or a Silver plan with unlimited doctor visits for a co-pay. Their new plans will be much better than what they have had and their premiums will be close to what they have been paying.

People enrolling without a subsidy can go directly through the insurance company. Enrolling is “like signing up for a library card” according to my clients.  That means it is really quick and easy.

BAD NEWS

On Facebook I hear news of friends and family around the country, and I heard some bad news from my old neighborhood in Connecticut.

A woman who is probably 63 years old and married is really upset about Obamacare because she and her husband are getting the shaft.  Their health insurance is being cancelled so they must buy a new plan offered through the Connecticut Exchange.  They don’t qualify for a subsidy, so their already-high health insurance premiums are going even higher – to over $18,000 per year!!!

I don’t know what this couple’s income is, but it is higher than the $62,000 cut-off for getting a subsidy. If their income is $65,000 and their health insurance premium is $18,000, that comes to 27% of their income!!! Holy cow! That is crazy expensive – but that is because health insurance in Connecticut is expensive and always has been.

It seems to me that the income limit for getting a subsidy in Connecticut and other expensive states should be higher than in Arizona. Paying 27% of their income for health insurance is most certainly not affordable.  So what happened to the Affordable Care Act for this woman (who was a supporter of Obamacare before she got slammed by it)?

In Tucson, a couple, both aged 63, can get a Platinum HMO plan with no deductible for around $1,000 per month. Or they can get a Silver HMO plan with a $1,500 deductible for $757 per month. And this is without a subsidy.

QUESTION

Why is healthcare so much more expensive in Connecticut than in Arizona?  I guess doctors need to make more money in Connecticut because housing is more expensive and taxes are higher there. So where does that leave their patients who can’t afford to pay for health insurance that will allow them to see those rich doctors?

SOLUTION

A fix to this problem for middle-class families in Connecticut is to raise the income limit for getting a subsidy. The subsidy should be based on the cost of health insurance where a person lives.  The rule in the Affordable Care Act is that a person should not have to spend more than 9.5% of their income on health insurance.  That woman from my old neighborhood in Connecticut would be happy to spend 15% of her income on her health insurance – but she’s paying much, much more – and it is not affordable for her and her husband.

I heard today that the Obama Administration will allow people like this woman in Connecticut to buy a catastrophic plan in 2014. But this woman and her husband do not want a catastrophic plan!!  Geeze. I sound like Fox News.

Dear President Obama:  Please don’t make me sound like Fox News.  Please fix the subsidy so it matches the high cost of health insurance in Connecticut and other states.

Dear Republicans in Congress: Please put aside the politics and work with Democrats to fix the problems with the Affordable Care Act.  The idea of people being required to buy health insurance through private companies (and not the government) was a Republican idea. It is working in Massachusetts.  I think it will work in Arizona and other states where health insurance premiums are affordable.  Please help people in Connecticut and other expensive states get affordable health insurance too.

 

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9 Responses to "Good News Bad News"

  1. Whew2 says:

    It has been suggested that health insurance be available across state lines. It has been my experience that competition improves the quality of product available and provides for a more competitive price structure. Wonder why it hasn’t been implemented?

  2. Denise_Early says:

    So folks in Connecticut should be able to buy an Arizona plan? That would raise rates for people in Arizona. And all health insurance plans are based on networks. The bigger the network, the bigger the premium. These are two reasons why “buying health insurance across state lines” doesn’t work. You can’t charge Arizona premiums and then have people get healthcare services at Connecticut prices.

    The idea of buying an insurance plan from Mississippi (in the past) was that the plan would be bare-bones, which was allowed in MS but not Arizona or CT. Now all plans must meet certain standards, so that MS plan will no longer be the super-cheap, lousy plan that used to be offered.

    The Affordable Care Act does allow for plan to be sold “across state lines”. That makes sense in regions like New England or NY/NJ. I just read that a Massachusetts plan is going to be offered in New Hampshire.

  3. Denise_Early says:

    This woman is pretty freaked out about the cost of her health insurance. And people who live in my old neighborhood do not make a lot of money. Not everybody in CT and Massachusetts makes a lot of money. I’ve lived in both states.

  4. Whew2 says:

    I appreciate your thoughts but you are only looking at the beginning of the process. Over time the inequity between CT & MS would be ironed out. The chance to have access to the entire market would bring about innovations in both pricing and delivery.

  5. BajaDemocrats says:

    Don’t most health insurance plans have a specific list of care providers who accept the insurance, as part of an HMO or Preferred Provider network? So enrollees in a CT plan would only get a list of care providers within CT? And if a resident of CT could buy an AZ plan they would only get a list of care providers within AZ?

  6. Denise_Early says:

    The only answer I can see to the pricing differences around the country is “single payer”. Medicare is a “single payer” and it pays higher fees to doctors in CT than it does to doctors and hospitals in Arizona and Mississippi. When it comes to paying Medicare Advantage plans, Arizona plans get about $800 per person per month from Medicare. In Florida, Advantage plans gets paid about $1100 per person per month. So you can see the big difference in reimbursement rates, even from a “single payer”.

    The key to bringing down health insurance premiums is to bring down the cost of health care. The Affordable Care takes some steps in this direction, but not much. The US is the only developed country in which the government doesn’t set the price for health care. We like our “free market” system. Unfortunately, this free market system means Americans pay twice as much for care as any other country.

  7. Denise_Early says:

    You are correct about HMOs. PPOs. “Preferred Provider Organizations would “prefer” that you go to doctors in their network, but you have the option to go out-of-network. You pay a higher co-pay if you go out-of-network, but you have that option.

    Going back to my Medicare experience, there used to be more Medicare Advantage plans that were PPOs, but each year the premium would go up and up. I guess the out-of-network option made these plans more costly to the insurance companies. Now there are very few PPO Medicare Advantage plans offered in Arizona, and they cost $125 per month and more.

    It looks like allowing people to go out-f-network means higher costs for the insurance company.

  8. Whew2 says:

    I don’t pretend to have all of the answers but it is becoming more obvious to the public that the ACA may not either.
    http://www.weeklystandard.com/blogs/obamacare-falling-apart-our-eyes_771566.html#

  9. Whew2 says:

    I have not taken a political slant in my remarks concerning this article you wrote. Since you have opened the door I will share a slant that might surprise you. I believe both the Dems and the Reps are in cahoots to sell out the American public at the behest of Big Business. If you wonder about that statement, think about how the POTUS makes changes to passed legislation without being challenged formally. What could be seen as a Republican advantage is being ignored.

    Business sees a benefit, they used to entice workers, turning into an expense. Companies around the world are shedding that responsibility and pushing it onto the public. Sadly, except in rare cases the quality of care is diminishing. Having many years experience working with our healthcare industry, I am aware of many instances where the wealthy come to the US for care. One king of a country whose own healthcare system is staffed with American doctors and RN’s would take over an entire floor of a major Houston hospital. Now we will watch the best go downhill.
    As for your comment about the failure of our free market system, let me suggest it is not free market. Our market is able to be manipulated because it is not consumer driven. There are a few politicians that are calling for consumer sanity being brought back into the market but with the demonizing and name calling I don’t know if they can be heard.

    You have a passion I admire and a knowledge of Medicare that I have recommended to others but understanding the distribution system that is healthcare requires more study.

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