Monday, January 21, 2013

Will You Be Able to Afford Your New Health Insurance?

Last November I wrote about my displeasure with the changes coming in 2013 to medical flexible spending accounts (FSA), the result of more provisions of the Patient Protection and Affordable Care Act (PPACA), a.k.a. Obamacare being implemented.  But those aren't the only changes looming on the horizon.  2014 and 2018 are also years when more big changes are coming.

Increased Out-of-pocket Medical Expenses

I was quite taken aback when I found out the ceiling on health plan out-of-pocket expenses will rise to $6,000 for individuals and $12,000 for families starting in 2014.

First, let's answer the question: So what are out-of-pocket medical expenses?  They include things like deductibles, co-insurance, premiums and co-pays; they are the "cost-sharing" provisions in your health insurance plan.

I logged into our health insurance plan's website to see what our out-of-pocket maximums are for this year and discovered they are no where near the new 2014 $6,000/$12,000 limits.  Then I got worried.  What if my husband's employer decided to raise the out-of-pocket maximums to the new limits in 2014?  How much would we have to pay out-of-pocket before our health insurance benefits actually kicked in?  And how are we going to be able to afford to pay these higher out-of-pocket medical costs?

Harder to Deduct Medical Expenses

Adding insult to injury is that fact that this year, deducting itemized medical expenses on your Federal taxes is going to be much harder.  Before, you could deduct any expenses that where higher than 7.5% of your adjusted gross income.  Starting in 2013, that percentage rises to 10%.

So we are facing higher out-of-pocket medical expenses and a reduced ability to deduct them on our taxes.

New Trend: High Deductible Health Plans

So how did our legislators decide on these new out-of-pocket medical expense guidelines?  They were set based on rates associated with high deductible health plans.

According to Kaiser Health News, high-deductible plans are becoming the new trend in health care coverage. They say that Fortune 500 companies like General Electric, Chrysler, Wells Fargo, American Express, JPMorgan and Whole Foods are all switching the health plans they offer their employees to this model.

Historically, most people who got a high deductible health insurance were healthy.  They didn't think they'd need to use their health insurance, so they choose this option "just in case" something might happen.  Hence these plans were sometimes called catastrophic coverage plans.

Employers like these plans because it means they can contribute less to their employees' health care costs.  In the changing world of health plans, these kinds of plans are now being viewed as "consumer-driven" which adds to their appeal.  Here's how this thinking goes:

If the employee has to pay with their money first to get medical care, then they will:
  1. take better care of themselves to avoid needing medical care 
  2. be more concerned about medical costs and 
  3. opt out of unnecessary tests and procedures when they do go to the doctor

Are These Changes a Recipe for Disaster?

O.K., so I have some questions and concerns.

How is the average patient supposed to "shop" for low-cost, quality medical care when this kind of information is currently not available?  And how are patients supposed to know what medical tests and procedures are needed and which ones aren't?

What will we have to do?  Take our laptops with us to medical appointments and use Dr. Google to figure out if what we are being told is the standard of care?  Or worse, delay care so we can research the alternatives before making a decision?

I think this high deductible health care model is so unfriendly to those of us with chronic illness!  How we all *wish* it were as easy as just "taking better care of ourselves."  We need to see our medical providers just to maintain what reduced quality of life and level of function we do have.

Plus is lower cost medical care really the answer for people living with chronic illness?  Many of us started with general practitioners when we first became ill and quickly learned that we needed specialists in order to get accurate diagnoses and treatments.  Specialists will cost more to see, but in the long run, they are often the only ones who possess the knowledge, expertise and skills needed to keep us stable and functioning to the best of our abilities.

How I View These Newest "Reforms"

So we are all going to be mandated to pay for medical insurance.  Then we are going to have to pay high out-of-pocket costs to access the health care system before that medical insurance kicks in and starts actually paying the bills.  Which means some people will have a whole new problem--will they be able to afford to use their new health insurance?

I think offer health plans that erect financial obstacles to obtaining necessary medical care is ridiculous.  How does this make any sense?  I think these new guidelines and trends will mean that people will forgo medical appointments when they don't have the money to pay out-of-pocket expenses.  And when people put off seeing a doctor because they can't afford it, this increases the number of health complications, trips to the emergency room and hospitalizations.

So is health care reform really helping us or just making things more difficult and complicated?  I have serious doubts that this will make health care more accessible or affordable.  I'd love to hear what you think.

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Migrainista said...

The bill is SO BIG and I'm just not that familiar with many of the details. I know there are some provisions that I'm happy about like the elimination of lifetime maximums. That being said, I also share some of the concerns that you do. I have many doubts about this bill being enough to really make access and affordability much better than it is now. Seems like there are systemic problems that cannot be addressed with these changes.

I do hope there will be resources available so we can group up and get better deals and/or assistance for paying for health care.

A tough issue indeed.

Chronic mom said...

Wow I hadn't heard those part of the bill! This just raises my concerns about healthcare even higher. I wish the bill actually did something to address cost which is the biggest problem right now. I'm lucky my spouse is employed by the government, but even with that supposedly wonderful insurance we paid thousands out of pocket and I know it's even worse for many other people.

Shelley fibro-moms.blogspot.com

Anonymous said...

I work in employee health insurance and in our office we tried to explain to people what this was going to "cost" them. A common response was "Oh how bad can it get?" I think people are just beginning to grasp the gravity of this debocle. I had one client tell me that they thought we were getting affordable healthcare. I reminded her that we were not promised affordable healthcare, just access to healthcare. And for many Americans, it is not going to be affordable. It is a nightmare that could have been averted if the election went the other way. Sadly it's here to stay whether we like it or not. Cathy

Anonymous said...

I had to add more. No this bill doesn't address the major complaint people have with healthcare, it's the cost. But if you look at health insurance like auto insurance, what happens if you have accidents and a speedint ticket? Your rates go up. Health insurance is a risk like any other insurance. Someone has to pay for the cost to treat you. If you had a claim for $200,000 and you paid premiums of $85,000. Who picks up the difference? the health insurance company. One of our biggest cost factors in this country is obesity and the medical effects steming from that disease. We have to change the mind set of the general population to a more health conscious society. Weve have made strides, but not enough, yet. Cathy

Unknown said...

Thanks for all the comments and please keep them coming.

I do feel compelled to address one issue raised here. Obesity is not the sole contributor to higher health care costs. Kaiser Health News has actually identified 7 factors that are driving up health care cost here http://bit.ly/UgGVYv. The article states that we are growing older, sicker and fatter (being overweight isn't even in its own category) and explains: "And two-thirds of adults are either overweight or obese, which can also lead to chronic illness and additional medical spending."

Being overweight or obese does NOT necessarily means you will get sick or die young as the New York Times pointed out earlier this year in their article Our Absurd Fear of Fat:http://nyti.ms/Xv6eng.

Food for thought.

Shannon said...

Fantastic post Selena!

We have also recently had our health care prices increased. Indirectly, through having to pay 20% + dispensing fee of our prescriptions vs paying only the dispensing fee before.

It drives me nuts that The Powers That Be continually blame overweight "sick" people to be so-called lazy burdens on society. Then make it near impossible for us to do something about it.

IF I could afford all the many, many therapeutic options out there available to me, I very well may become well enough to return to work and be a tax paying citizen again.

Oh! The irony in that, right? *shakes head*

The multi-billion dollar weight loss industry and expensive Big Pharma is what keeps the population "sick". No wonder! We are all paying customers.

Enough said!

Ms. Rants said...

There are definitely problems with this bill, and it could end up costing some people more. On the other hand, it can give access to insurance to people who never had that access before. I think that it is a step in the right direction: getting coverage to more people. It is not an end, just a means to an end. I believe that in the long run, we could end up with a much better system. I just hope that we can make it work in the short run, too. I think that too many people don't realize what a large impact health insurance has on many lives. I think more are starting to realize it. So maybe that's another sign that we're moving in the right direction?

Unknown said...

I think universal access to medical care is a good thing. But I'm also concerned about the costs. I'm concerned that the current healthcare bill robs Peter to pay Paul, making it harder for Peter to keep getting the medical care he needs and used to be able to afford. This healthcare bill was supposed to be about BOTH access & affordability. For me personally, I only see my healthcare costs going up and that's not cool.