About this series: The individual insurance market
Obtaining insurance is often costly and difficult for people who have to buy their own health plans. Those with high blood pressure, diabetes or other common health issues are routinely rejected for coverage. That will change Oct.1, when the new Health Insurance Marketplace opens. Under the Affordable Care Act, insurers may no longer turn down people or charge them extra because their health record isn’t perfect. Depending on their income, consumers using the exchange may qualify for a tax credit from the government if they can’t get coverage from an employer. Consumers who qualify for help paying for plans, as well as those with pre-existing conditions, are expected to benefit the most.
The situation: Health insurance for his family costs Robert Shlora $2,545 every single month — more than $30,000 a year. For years, Shlora has been unable to shop around for coverage because of pre-existing health issues. Shlora spent years selling insurance. Today, he’s not working and dips into savings to pay for his plan. It covers Shlora, his wife and a 23-year-old son.
Impact of ACA: Shlora is almost certain to find cheaper coverage through the ACA. A high-deductible plan approved for the exchange could cost Shlora as little as $1,100 a month for him and his family. Since he is living on investments and his taxable income is relatively low, Shlora may also qualify for a tax credit that would pay part of the premium.
Shlora’s view: This is certainly more than I ever expected to pay for health insurance. $2,500 a month is ridiculous. That’s more than most people’s house payment. It’s certainly not something I brag about to my golfing buddies – “Oh, gee, guess how much I pay for health insurance!” As a self-employed individual, I probably got hurt more than anyone. People who work for big companies have no clue what it’s like to try and get insurance on your own. It would be a great relief to me to have a set cost and large pool where future rate increases would likely be minimal. I’m 61 years old and I don’t go on Medicare for another four years and frankly it’s no picnic paying the premium, as it is, at $30,000 a year. It’s strictly coming out of savings.
Having spent 38 years since graduating from college being paid to give people advice on health insurance, I find it incredibly ironic and self-deflating to not be able to solve my own personal issue, which has arisen in part because so many insurance companies have decided to pull out of the health insurance market. Because there is limited competition, the underwriting standards are so strict a person can be unacceptable as an underwriting risk for the flimsiest of reasons.
You need to prove that you don’t need the insurance in order for them to accept you! They can charge what they want and cherry-pick the risk. They treat people with six DUIs in the high risk auto pool better than they do people with minor health conditions.
I am perfectly willing to accept a high-deductible plan where I would cover the first $20,000 or even $50,000. God forbid, if my son were to have an aneurysm I do not want the doctor to come in and say, “You do not have insurance, this might cost $500,000 and do you just want us to pull the plug?” Obviously, I would never consider that as an option. All I’m trying to do is basically like you do with your home. Lightning is not going to strike, but you certainly have homeowners insurance.
I know friends of mine who don’t have insurance and I consider them reckless gamblers. I don’t know how you can sleep at night. I’m not looking for people to have a benefit for me! I want to pay my own way. It’s the responsible thing to do.
Politically, I would say I’m an independent with a right-ish bent. I have no bumper stickers. The Affordable Care Act is wonderful in concept but it’s going to be an onerous task to get it implemented. Everybody should be covered by insurance right now. People are just going for free into the emergency room and we’re paying for it ultimately anyway. Certainly, that can’t continue.
The situation: Mayfield owns TechQuidation Inc., a small business based in Woodstock that sells bar-code scanners and consults on supply-chain management and IT maintenance. Mayfield pays $605 a month for a plan that covers him, his wife and their two children with a $1,000 deductible per person. His company employs about a dozen workers and does not offer them a health plan.
Impact of ACA: If Mayfield shops on the exchange, his costs are likely to increase. A plan with a similar deductible will likely cost about$1,000 a month to cover the family. He could keep premiums similar to what he is paying today if he opts for a high-deductible plan.
Mayfield’s view: I have been OK in the individual market. In all honesty, it has not been painful. We have a lot of out-of-pocket expenses, but if I am honest, we chose them, such as chiropractic care or our fitness membership. It’s for our health and that’s probably the major part that is not covered except for dental.
I wish they would have left the insurance market alone. I am paying less in premiums than the group plans. The only thing in the back of my mind – the pervasive thought was – what happens as we age and what if the rates do go through the roof and what if we end up with a pre-existing condition? How much is this going to handcuff me? There are two sides of the coin. The other side is – as bad as that might be for me, how much is it somebody else’s responsibility to take care of me?
I don’t expect somebody else to carry my water. When you are saying the word subsidy to me you are saying I am going to be dependent on someone else. After I left home at 18, mom and dad have helped me out when I needed it, but who wants to be 26 years old and still on your parents’ insurance? What does that say about you not embracing being an adult? I strongly favor Health Savings Accounts. Insuring for major events and saving for the lower cost, ongoing health maintenance items makes sense to me.
If a company wants to offer a health plan, they should offer it and if the employees want to take it they should and everybody should have the choice to do what they want to do. I do not want somebody in Washington, D.C. who maybe never spent a day in what is the real world to me, of creating jobs and trying to meet payroll – I do not think they have any place trying to dictate to me how we approach that. They do not have any experience to build on. They have got textbook knowledge that has proven to be fairly useless.
Let’s not forget that we are in this current mess to a large degree because FDR meddled with the private sector and froze wages in the early 1900’s, forcing companies to find other ways to recruit and retain employees. Companies began offering insurance benefits, people became dependent on these benefits, and now we have progressed — or regressed — to our current mess. Oh, the malaise created by meddling and self-serving politicians.
The individual mandate for health insurance – is that really the role of government to tell a private citizen? I think that’s just an atrocity that we even accept it. It runs counter to my world view.
Dr. Richard Wagner
Lives: Sandy Springs
The situation: Wagner has been a solo-practice pediatrician in Atlanta for three decades. Since he has always been self-employed, he and his wife have bought their own health plans for years. With their three children grown and his wife now eligible for Medicare, the plan covers just Dr. Wagner. He pays $360 a month for a policy with a $5,000 deductible.
Impact of ACA: Wagner will almost certainly have to pay more under the ACA. The cheapest high-deductible plans approved for the exchange would cost Wagner at least $475 a month for a plan with a slightly higher deductible than he has now. His income is too high for a subsidy. He could shop for a plan outside the exchange but prices are expected to be similar.
Wagner’s view: I’m not unhappy with my high-deductible plan. It’s what a lot of people had when I was a kid in the 1950s and 1960s. You paid your $20 or $10 for a doctor’s visit, and then if something happened you had hospital insurance. [Now] people who pay a co-pay have no idea what their doctor is charging or getting paid. They have no earthly idea and because they have no idea they don’t really care all that much. I think that has a lot to do with prices going up. It’s such a game now.
I got an MRI a couple of years ago. It turned out to be nothing. The short version is I went in and I happened to know the tech and I said, “How much is it going to be?” and she said, “$3,500.”
I said, “Oh, God!” She said, “What’s the matter?”
I said, “I have a $5,000 deductible and that’s straight out of my pocket.”
She said, “What did you think it was going to be?”
I said, “I was hoping $1,500,” and she said, “OK.”
That was the cash price. I didn’t know there was such thing. I didn’t know to ask for it. Even me. I didn’t know there was a cash price.
I think we as a country should be able to do health care better than we’re doing it. It’s not just that more people should get health care coverage. There has to be a more efficient way to do it.
About every three years, I change insurance companies. We would get double-digit increases every year and after a couple of years we would say let’s see if somebody else will give us a better deal. The last time we changed was about three years ago. Unfortunately, in August my new company went up 14 percent in one year. I’m sticking with them for now, but we’ll see.
Knock on wood, I do not have diabetes, and I didn’t have a heart attack last year – none of those big things. I get rated up about 25 percent related to mild asthma and that’s it.
For me, I’m certain it’s going to go up this year. Why do I know that? Because it has always gone up! It always goes up. Right? Now, I will tell you that I wouldn’t be surprised if it went up substantially more. After all, the whole ACA is about getting more people under the umbrella who don’t have any money of their own and somebody has to pay for it.
I’m upper middle class so nobody is going to be giving me a subsidy or a tax credit or anything like that. I will look into the exchange. I would be really shocked if I get a better deal than I am getting now.
My insurance company sent me a letter telling me that congressional committees estimated that premiums in Georgia could go up 100 percent because of the law. The letter was really screwy and scary. I read it fairly clearly – it said we’re going to bump your prices no matter what and we’re going to blame it on the president. Who knows whether that’s true or not. I was very turned off – although not enough to change insurance companies yet. I felt like this was half a threat and half a warning. And I really didn’t appreciate it, not just because I’m generally supportive of the ACA but because I thought it was injecting politics into something.
It’s not going to be a perfect system. They’re going to have to make adjustments. There was a certain “leap” about it and when you leap you still have to get your footing when you land on the other side and maybe get your hands dirty because you stumble a little bit. That is the thing that bugs me the most about the politics of this. Nobody is saying okay, this is the new law, let’s see what we can do to work on it. There is so much heel-dragging and obstruction and so many ridiculous predictions.
The situation: Nearly two decades ago, an insurance broker visited Webb’s workplace. The job did not offer coverage, but the business owner wanted to encourage employees to buy their own plans. Webb is glad she did. In the past six years she has been treated for breast cancer, lupus and a broken hip. Since 2008, the cost of Webb’s plan has increased from $674 to $976 a month — even though she has repeatedly upped her deductible. She got a notice that it would increase again this fall to $1,215 monthly. She is single and middle income: she works full-time as a ‘house mom’ in the adult entertainment industry, working backstage managing the performers. Her illnesses have decimated her savings.
Impact of ACA: Webb will almost certainly get a better deal under the ACA. She would be able to buy a plan similar to the one she has now for about half the cost. She could also upgrade to even better coverage and still pay less than she does now. Webb probably makes slightly too much for a tax credit to help pay for her plan. However, if her income dips next year, she could qualify for assistance with her premiums.
Webb’s view: I had health insurance when I was married and then when we divorced it was probably between 5 and 10 years before I met my insurance broker. Every time I would check the price for insurance it was so expensive and I was like, ‘I can wait a little bit longer.’ We had a girl at work that had gotten really, really sick. She was in an accident and it opened our eyes because she was a lot younger and it made me realize every day something can happen. The policy was never less than about $300 or $350 a month. Even back then that was a lot of money.
I have been cancer-free for six years. I was not one of the lucky ones that just skated free after the treatment. Three months after my last chemo treatment I got up one morning and went to stand up and pain shot all the way past my knees — I mean severe pain. It was nerve damage that lasted almost 14 months. It was so devastating. The whole time I had to work. You do have to keep a good attitude. And then, all of the sudden my joints started swelling with severe pain and after six or seven months, that is when I was diagnosed with lupus.
I would have died without my insurance, with everything that has happened. A lot of these doctors and a lot of these specialists will not see you if you do not have insurance. Now starting in October my deductible is going to go higher and my bill is going to be over $1,000. But I have no other option.
Before I got cancer, I had money saved. I had all my bills paid. I owed nothing but my mortgage. Since all this happened my credit cards are maxed, and I do have barely $1,000 in savings. If an emergency happened I do not know what I would do. A lot of people think that where I work is just terrible but when I went out, they did all kinds of fundraisers and they paid my bills. They had buckets at the end of the stages. They did a lot of things for me to make sure I was going to be taken care of. They took a lot of the stress away.
I do not really know what all is going to happen [with the health law]. If I could get a better policy at a lower price that would give me an option that right now I don’t have. I’m barely making it.
There are so many people that can’t get insurance and are walking around uninsured. If they could at least get it affordable, it might not be exactly everything they want but if they were hurt they could go to a hospital.
The big draw of the insurance exchange:
HELP PAYING FOR PREMIUMS
If you can’t obtain affordable health insurance through an employer, you can shop on the insurance exchange. And, depending on your income and family size, there’s a chance the federal government will help pay for your coverage. Families whose incomes fall between 100 percent and 400 percent of the federal poverty line can qualify. Here’s a look, by family size and income ranges, at who is likely to qualify for assistance.
• $11,490 to $45,960 for individuals
• $15,510 to $62,040 for a family of 2
• $19,530 to $78,120 for a family of 3
• $23,550 to $94,200 for a family of 4
• $27,570 to $110,280 for a family of 5
• $31,590 to $126,360 for a family of 6
• $35,610 to $142,440 for a family of 7
• $39,630 to $158,520 for a family of 8
Note: The income figures are based on 2013 numbers and are likely to be slightly higher in 2014.
ON THE EXCHANGE
How much help you can get depends on where your family income falls in the range. Those near the poverty line would be expected to pay just 2 percent of income, while those at the upper limits of the range would have to pay 9.5 percent of their income for the coverage before a subsidy would kick in.
Are you single?: Here’s how much a single person will be expected to pay for coverage, at various income levels, before qualifying for a tax credit to cover the rest of the premium:
Income Amount consumer would pay per year
Got a family?: Here’s how much a family of four will be expected to pay for coverage, at various income levels, before qualifying for a tax credit to cover the rest of the premium.
ABOUT THE TAX CREDIT
The help paying for premiums comes through an “Advanced Premium Tax Credit.” Based on income information, those who qualify can have the credits applied directly to their monthly premiums, so they do not have to wait until tax time to get the savings.
It’s important to know that consumers who can get “affordable” coverage through an employer – even if that’s a spouse’s employer – are not eligible to get a tax credit on the exchange. What’s an “affordable” plan? Under the law, that’s any plan that costs no more than 9.5 percent of the worker’s income. The 9.5 percent threshold applies to the worker only and not to the cost of covering his or her whole family. Put another way: if you earn $50,000 a year, and your insurance costs $4,500, it’s considered affordable – even if it costs you another $5,000 to insure the rest of your family.