That's Certainly Been My Observation

Even as President Obama reluctantly granted Americans thrown off their health plans quasi-permission to possibly keep them, he called them "the folks who, over time, I think, are going to find that the marketplaces are better." He means the ObamaCare exchanges that are replacing the private insurance market, adding that "it's important that we don't pretend that somehow that's a place worth going back to."

Easy for him to say. The reason this furor will continue even if the website is fixed is that the public is learning that ObamaCare's insurance costs more in return for worse coverage.

Mr. Obama and his liberal allies call the old plans "substandard," but he doesn't mean from the perspective of the consumers who bought them. He means people were free to choose insurance that wasn't designed to serve his social equity and income redistribution goals.
Dealing with my wife's hospital bills lately, I've been struck by how lucky I am to be handling this under the grandfathered plan than under one of the proposed plans that are available from the exchanges (at least, in theory they are available: I haven't met anyone from Georgia who has mentioned successfully signing up for one). For one thing, the hospital we just happened to be nearest was in-network -- common for the old plan, which has the kind of broad networks Blue Cross normally features, but unlikely to prove true under the new plans. Since it was emergency care, that is a significant benefit.

Second, our deductible -- though I always considered it 'catastrophic' coverage -- is less than the $12,700 that I would have to come up with under the Obamacare plans. There's an individual out of pocket limit, too.

Third, the monthly premiums are about half what the cheapest plans on the exchange purport to cost.

So if I had a plan like his, I'd have had less money in the bank (because I'd have to cover higher monthly premiums), in order to pay for a higher total bill (because of a higher deductible). Plus, my wife might have had to have been carted by ambulance goodness-knows-where to find a hospital that would accept her.

No thanks, pal. Your plans for us are not only not better, they are not acceptable.


E Hines said...

Well, I hope your lady makes her recovery in due course and time.

The deductibles of the Obamacare punk-metal plans are what interest me, if only because this more subtle aspect of Obamacare is little discussed.

My wife and I have had for a number of years, courtesy of her employer, a High Deductible plan (so far, it's still legal, too). We chose this plan so that we could have an HSA, and we've been able to accumulate what should have been a substantial amount of money with which to cover a medical emergency.

Let's take a hypothetical poor man and wife who gets a substantial subsidy (which size is proving chimerical, but let's go with Obama's claims, for this discussion) so that he can buy a Silver Plan, which will cover 70% of his and his wife's medical costs--when it actually kicks in. Let's say the subsidy cuts the premium to $200/mo. That's a stretch for a budget, but maybe he can swing it. A typical deductible runs $5,000 (which is more than the High Deductible required for my HSA)--and it resets each year.

If our poor family incurs $4,999 in medical expenses per year, his insurance coverage never will kick in--even though it'll continue to collect his $2,400 per year in premiums (and $3,600 per year in tax-funded subsidies to get to a typical unsubsidized Silver premium) forever. Our poor man and his wife are out nearly $7,400 per year and still have no coverage from their insurance policy, even though they're the proud holders of a Silver Plan.

Some Obamacare Plans' deductibles run as high as $12,000. Per year.

Of course, that's the nature of deductibles; the problem with Obamacare is that the deductible (and the premium, and the specifics covered, and etc) are utterly isolated from the effects of competition and the input of risk transferred. And from customer choice.

Our HSA wouldn't last very long under the Obamacare regime.

Eric Hines

Assistant Village Idiot said...

Be prepared for a string of heart-rending anecdotes about the old plans and how terrible they were. Many of the stories will be true, of course. It is in the nature of the free market that some companies will try to take advantage and some consumers will make poor choices in all innocence.

But the actual questions of whether more people are generally better off, or whether some individuals are getting screwed over by their government, which offers no legal recourse, versus a private entity, which can be sued, will be quietly ignored, until there just aren't enough untamed insurance policies to matter, and all are essentially private distributors of government programs.

Eric Blair said...

I was seeing $16000 deductible plans being discussed (actually being offered) in 2010.

These aren't new, really. It's just that nobody was buying them up till now.

raven said...

Grim , best of wishes for your wife and yourself!
I would happily buy a 16,000 dollar deductible plan If it was priced to the market and my health. I suspect such a plan, free from government qualifications, designed to kick in only in severe issues, would cost very little.
It used to be we had some choice between high premiums and high deductible- now we have to pay
Our choices are going to revolve around what we do to combat this .