Self employment has been good to my client Mark. He went from working for "the man" four years ago to building his own small business. Over those years times were tough for Mark and his family. Getting the business off the ground was tough and because of a prior medical condition Mark's wife was uninsurable. The good news was he was able to utilize COBRA and pay an "outrageous" premium of $798 per month for a $3000 single deductible CDHP plan. When it expired in 2011 the family was forced to make a decision. I had advised him with his COBRA decision and now he was calling again hoping to find cost savings and make sure that his wife had insurance.
The good news was we were able to insure the entire family and lower the deductible to $2500 single deductible. The new cost was $498. Mark and his family couldn't be happier. In their opinion it was all because of Obamacare. Fast forward to last month.
With an income of $95,000 per year and a plan that was no longer going to be available because it doesn't meet the law, I encouraged Mark and his family to take an early renewal option to avoid the high costs associated with community rating and new mandated benefits. His 2013 rate was $632 and an early renewal option would only increase the rates to $651.
Against my advice he refused the early renewal. "You've been a great help but I believe in the Affordable Care Act. There is no way that the costs and subsidies will make me any worse off." So we went the other direction and started the process at goodluck.gov. Finally on December 20th we were able to get through the website and pick a plan. The results only shocked one of us.
Starting tomorrow he will have a new plan. It is with one of three insurance companies who are contracted with his wife's specialists but wasn't the lowest cost option. His benefit will be better with a $500 savings in his deductible and the family will get a subsidy estimated at $101 per month.
The problem is the new premium. It will cost him $1142 per month and this includes his subsidy. $5892 per year more than if he had simply early renewed. Unfortunately for Mark and his family Obamacare didn't bring peace and joy this holiday season. Instead it left him with a big lump of coal.