The Kaiser Family Foundation is reporting on the loss of ACA enhanced subsidies and the problems many families face keeping coverage. The article, As Insurance Prices Rise, Families Puzzle Over Options is a series of anecdotes about families who face unaffordable “Affordable Care Act” health plans. Something that is missing in the debate is why ACA plans are so unaffordable. Hint: it is due to all the mandated benefits and costly insurance regulations.
In one anecdote, a couple of married freelancers – podcasters and storytellers – found the price of their Silver plan rose to $801 a month. This sounds low because ACA coverage for me alone would be around $801 a month for a bronze plan. In another anecdote a family thought about dropping coverage for the parents and only insuring their kids. While coverage for kids is inexpensive, adults will likely need it more. They had been paying $2,000 a month for an ACA Gold Plan, but with the expiration of the subsidies the plan would cost $900 more, or nearly $3000 a month. A Gold plan sounds extravagant for taxpayers to subsidize. Yet, Bronze plans are largely worthless with enrollees likely paying all their medical care out of pocket while still paying high premiums. The family later bought a cheaper plan costing only $1,200 a month. Yet, $14,400 a year ($1,200 x 12) is far less than the average family employer plan costing $25,572 according to Kaiser Family Foundation.
In another example, a holistic wellness provider from Rhode Island lost her $0 deductible Silver plan when its cost doubled to $220 a month. She had planned to marry this year but if she were to marry, the cost would be $700 a month. (Yes, Obamacare penalizes marriage.)
There are undoubtedly millions of stories like these. One constant in all these anecdotes is rigid regulations that prevents affordable health coverage that meets the needs of most Americans. Obamacare was tailored to provide extreme cross subsidies. Because of the cost, about 86% of enrollees choose Bronze (30%) or Silver (56%) plans, with average deductibles ranging from $7,200 to $3,700 respectively. While there are no annual and lifetime limits on benefits, nearly 90% of enrollees do not surpass their deductible. Thus, most are paying their medical bills out of pocket and functionally uninsured.
Also absent are any discussions about ways to reform the health care system. Besides rigid health insurance rules, the health care system is expensive for many other reasons. These are hardly talked about. Hospital consolidation, takeover by private equity, the list goes on.
A recent article in the journal, Health Affairs, talked about peddling so-called junk insurance. The definition of junk plans is anything that does not align with Obamacare regulations. The following is an excerpt from Health Affairs Forefront:
These non-ACA compliant products can be harmful in three ways: because they are not subject to most state and federal health insurance standards, they often come with major coverage limitations, including skimpy benefits and an array of exclusions; these products are often misleadingly marketed as alternatives to ACA Marketplace coverage but the products being sold are not major medical coverage at all, creating a false and confusing comparison; and these non-ACA products are often marketed toward relatively healthy individuals, siphoning off these populations from the individual market and exacerbating the affordability issues in that market.
In other words, the authors are afraid people who decide Obamacare is a bad deal may turn to plans that better align with their household budgets, medical needs, and health risk. That said, state insurance regulators should act against any brokers or firms misrepresenting the products they are selling. More from Health Affairs:
State policy makers can… put guardrails and protections around them through legislation or regulation. In the immediate term, though, state insurance regulators can ramp up oversight of these non-ACA compliant products and more aggressively monitor deceptive marketing practices.
Regardless of the coverage, benefits and benefit limitations should be transparent and acknowledged by the applicant. Annual and lifetime limits should be disclosed clearly. Networks should also be sufficient to get care when needed. Allowing Americans to select health plans that meet their needs should be the goal, not protecting Obamacare from competition.
KFF Health New: As Insurance Prices Rise, Families Puzzle Over Options
Health Affairs Forefront: The Peddling Of “Junk Plans” To Consumers Facing Higher Insurance Premiums
Thanks for posting the above article on so-called “junk insurance” vs. the ACA. Here are a few comments:
1. The “fixed indemnity” plans really are junk, if that is the only coverage someone is getting.
Entering the hospital with a $1000 indemnity benefit is to be effectively uinsured.
2. Short term plans pay more or less full benefits. I had my wife on short term plans for her last five years before Medicare. We could not afford the premiums for standard insurance, just like the people in these articles. Now, she had to be healthy to get one of these plans.
3. Health ministry plans also have underwriting, but after that they seem to work OK. I am skeptical when they brag about their ability to negotiate lower prices from hospitals though.
I have said this before, but the greatest good for the greatest number would come from:
A. Let healthy people buy underwritten plans
B. Let sick people buy into Medicare, with federal subsidies
Use the money that is now shoveled into ACA subsidies for the Medicare subsidies noted above.
The Urban Institute studied this kind of ‘Medicare Buy-In” extensively in 2021……..
The Effects of Medicare Buy-In
Policies for Older Adults on Health
Insurance Coverage and Health
Care Spending
The key questions for the federal budget would be how many people would want a buy-in, and what subsidy they should get.
The unsubsidized “premium” was estimated to be $8900 a year. If the average insured got a subsidy of $4500 and 5 million people signed up, that would only cost the Gov’t $20 billion a year.