For many Americans, this week has brought a “teachable moment” — and the lesson has been that the catastrophic insurance that you’ve been buying for years has been money poured down the drain. It’s called “junk insurance,” and it can’t be sold to you anymore — just like restaurants can’t save money by selling you fish that’s been left out in the sun for three days, even if they batter it and put so much salt and ranch dressing on it that you can’t taste the rottenness until hours later, when you go home and throw it up.
That sort of thing is illegal now. You’re welcome. Stop complaining about having had to give it up.
Here are a few things to read and get some perspective. First, from Slate‘s Dave Weigel:
[T]he 6 percent of humans likely to lose their plans and pay more constitute millions of Americans, and that even a small number of them can talk to the media about how horrid the experience is. What they need is a long trench warfare campaign of fact-checking and, occasionally, apologizing. Michael Hiltzik, for example, has reported out the tale of Deborah Cavallaro, a Los Angeles woman spiriting around conservative-leaning shows to explain how Obamacare killed her plan.
Her current plan, from Anthem Blue Cross, is a catastrophic coverage plan for which she pays $293 a month as an individual policyholder. It requires her to pay a deductible of $5,000 a year and limits her out-of-pocket costs to $8,500 a year. Her plan also limits her to two doctor visits a year, for which she shoulders a copay of $40 each. After that, she pays the whole cost of subsequent visits… at her age, she’s eligible for a good “silver” plan for $333 a month after the subsidy — $40 a month more than she’s paying now. But the plan is much better than her current plan — the deductible is $2,000, not $5,000. The maximum out-of-pocket expense is $6,350, not $8,500. Her co-pays would be $45 for a primary care visit and $65 for a specialty visit — but all visits would be covered, not just two.
Is that better than her current plan? Yes, by a mile.
But cutting through the fog of the Cavallaro story took several days, and she’s going to have a lot of company.
Or there’s this from … Consumer Reports!
Conisder the case of Diane Barrette, a 56-year-old woman from Winter Haven, Fla. Her story was featured in this CBS News report and endlessly echoed on the Internet. She was upset because Blue Cross Blue Shield of Florida was canceling her $54-a-month “GoBlue plan 91” and offering to replace it with a $591-a-month “Blue Options Essential plan.”
Sounds terrible—except that Barrette’s expiring policy is a textbook example of a junk plan that isn’t real health insurance at all. If she had ever tried to use it for anything more than an occasional doctor visit or inexpensive prescription, she would have ended up with tens or hundreds of thousands of dollars of medical debt.
Here are some of the gory details. (You can see the rest for yourself on this complete plan summary from the insurance company.)
- The plan pays only the first $50 of doctor visits, leaving Ms. Barrette to pay the rest. Specialist visits can cost several hundred dollars.
- Only the first $15 of a prescription is covered. Some prescriptions can cost hundreds or even thousands of dollars a month
- The plan only pays for hospitalization for “complications of pregnancy,” which are unlikely given Ms. Barrette’s age and in any event only the first $50 is covered.
- It pays $50 for a mammogram that can cost several hundred dollars, and only pays $50 apiece for advanced imaging tests such as MRIs and CT scans and then only when used for osteoporosis screening.
“She’s paying $650 a year to be uninsured,” Karen Pollitz, an insurance expert at the nonprofit Kaiser Family Foundation, said. “I have to assume that she never really had to make much of a claim under this policy. She would have lost the house she’s sitting in if something serious had happened. I don’t know if she knows that.”
In fact, had Blue Cross Blue Shield allowed her to keep the plan, she would have been fined for going uninsured in 2014. Limited plans such as these are considered “excepted benefits” that don’t fulfill the new obligation to have health coverage.
Okay, but can’t we be outraged that Ms. Barrette will have to fork over $591 a month for a replacement plan? Actually, no, because she has other and better options than the costly plan Blue Cross Blue Shield wants to put her in. She get real insurance that covers all essential health benefits for well under $200 a month.
She has said her income is about $30,000 a year. It would be nice to look up her choices on HealthCare.gov,which is running the marketplace in Florida. But you can’t do that without actually applying for coverage.
So, using tools available through eHealthinsurance.com (I’ll walk you through this useful resource tomorrow), I determined that she qualifies for a premium subsidy of $320 a month. She can use that to purchase a Humana Direct Silver 4600/6300 plan for $165 a month.
The administration released a report in December 2011 that explained how well the individual insurance market covered those essential benefits. It found: 62 percent didn’t cover maternity care; 34 percent didn’t cover substance abuse services, 18 percent didn’t cover mental health services; and 9 percent didn’t cover prescription drugs. There are also no annual caps and no lifetime limits under the ACA, which almost eliminates the risk of going bankrupt because of medical costs in a way that didn’t exist before the law.
That’s why experts have routinely said that you can’t make an “apples-to-apples” comparison between 2013 and 2014 insurance premiums, because the plans being offered now are much more robust.
And speaking of premiums, the numbers suggest that many of these people who might receive a cancellation letter will have access to the substantial financial help that Obamacare offers.
To be clear, nobody has done an analysis yet of what people who have received a cancellation notice are going to pay for coverage under the ACA. There’s just no way to do that. But we can take a pretty educated guess by looking at the breakdown of the health insurance market provided by the Kaiser Family Foundation.
People making less than 400 percent of the federal poverty level qualify for either tax credits or expanded Medicaid (which, to be clear, has to cover the same set of 10 benefits that private plans have to cover). According to Kaiser, about 60 percent people in the individual insurance market (more than 10 million) have an income within that range, which leaves the other 40 percent (about 4.4 million) who don’t and won’t qualify for help.
So mash this all up — it’s an imperfect science — and Gruber’s prediction that about 3 percent of Americans are actually at risk of ‘losing’ under Obamacare holds up pretty well.
All of this was noted, by the way, back in 2010 when the law passed!
So don’t think that you’re a loser because you have to get real insurance. You’re just not eating battered rotten fish in a strongly flavored salty sauce.
This is your Weekend Open Thread. Talk about that or whatever else you’d like within reasonable bounds of decency and decorum. The Dearthwatch appears below!
Rumor has it that the Register is now only hiding things for seven days rather than for three months or for eternity, which if true is a good step. Regardless, the Orange Lady seems to have more or less settled in a bit more than 2000 ranks lower then when it started. Acceptable losses? Maybe.
We had our best month since January — but are down 100,000 ranks? I suspect that maybe the Alexa algorithm is a little behind the times….