Thursday, November 19, 2015

Melvin & The SubPar Plan

Readers may recall when President Obama called out pre-ACA plans as "sub-par;" that is, that they had both unreasonably high out-of-pocket exposure plus high premiums. The ObamaTax was touted as the fix-it for both problems.

Let's take a look at how well that's worked out, shall we?

IB regulars may recall the saga of Melvin and the tricky prescription. Melvin's plan, issued by Medical Mutual of Ohio, is a "grandfathered" HSA plan with a $3000 per person, $6000 per family deductible, then 100% covered after that. We just got his 2016 renewal in the mail, complete with a 14% rate hike. The good news is that that's about half of what I'm seeing with ObamaTax-compliant plans. The bad news (sort of) is that his family's premium is increasing from $516 a month to $586. This includes Melvin, Mrs Melvin, and two Mini-Melvins. If you're looking at that $586 skeptically, I don't blame you: that is a heckuva bargain.

If you're thinking that it's way out of line, well, here's a comparable quote from another carrier (several to choose from, this one seemed the most photogenic, and is right in line with all the others number-wise):

Yes, almost $1200 a month, plus much higher potential out-of-pocket.

On the other hand, it does include "free" birth control and maternity (for his 40-something better half). Some deal.

And this is why The Grey Lady recently reported breathlessly:

"[F]or many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage."

To be fair, the new plans provide "free" colonoscopies in addition to the birth control convenience items and maternity. But most of these plans aren't even HSA-compliant, so there's no opportunity to sock away extra dollars (what few there may be left after paying the grossly inflated premiums). And of course, one wonders how many folks actually take advantage of the "free" routine exams and such.

As we've averred many, many times here at IB, insurance is - well, should be - a risk management tool, and thus cover  big-ticket items, not $9-a-month pills. What did the rocket surgeons in DC think was going to happen when they crammed all those freebies in, while simultaneously proscribing carriers from underwriting new applicants?

Having health insurance may confer access, but what good is that access if one can't afford to actually benefit from it?
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