Testing ObamaCare On-Line; Deductibles

Updates

October 15, 2013: talk about perfect timing. I posted the note below yesterday. Today, Bloomberg is reporting that more patients are now paying up-front before seeing their physician, as deductibles spread. Exactly as noted below. And once the 47% who would never vote for Mitt Romney now learn how insurance works, I assume most new ObamaCare enrollees will cancel after about three months of paying their premiums. Again, the better plans have $12,000 of annual deductibles. From the linked article:

When Barbara Retkowski went to a Cape Coral, Florida, health clinic in August to treat a blood condition, she figured the center would bill her insurance company. Instead, it demanded payment upfront.  

Earlier in the year, another clinic insisted she pay her entire remaining insurance deductible for the year -- more than $1,000 -- before the doctor would even see her.
“I was surprised and frustrated,” Retkowski, a 59-year-old retiree, said in an interview. “I had to pull money out of my savings.”

The practice of upfront payment for non-emergency care has been spreading in the U.S. as deductibles rise. Now, the advent of the Patient Protection and Affordable Care Act is likely to accelerate that trend.

Many of the plans offered through the law’s insurance exchanges have low initial premiums to attract customers, while carrying significant deductibles and other out-of-pocket cost sharing. The second-lowest tier of Obamacare plans in California, for example, carries a $2,000 annual deductible.

My original post was wrong on one count: I thought clinics would waive the deductible, happy to get the 90% from the insurance company. But I guess the clinics have learned that insurance companies do not pay until after the deductibles are met. 

Original Post

 

I went to both the California and the Texas on-line health care exchanges where one can see the cost of the health care programs offered and then check to see if one is eligible for subsidies (I am not eligible for subsidies).

The interesting thing: I was able to shop for a health care policy BEFORE submitting my income data or any personal data in both Texas and California. In fact, one can play around with various ages and sexes just for the fun of it. Here is the Texas site. Make up your family, your ages, and start shopping.

It was interesting to see how much health care in either state is going to cost. The "best" plans in California and Texas are both about $1,000/month with a $12,000 annual deductible for two adults, husband and wife, each over the age of 55. We would pay $1,000 a month and then pay no costs after the $12,000 annual deductible is paid. 

Forbes suggests that the Obama administration knew that folks would be shocked at how expensive health care was going to be:

On average, the cheapest plan offered in a given state, under Obamacare, will be 99 percent more expensive for men, and 62 percent more expensive for women, than the cheapest plan offered under the old system. And those disparities are even wider for healthy people.

Forbes suggests that is the reason the Obama administration requires one to enroll before one can begin shopping. One has to supply personal information including social security number and income before beginning to shop.

It's an interesting article.

Two points that the article may or may not discuss; I scanned it quickly:

• Obamacare will not cover the poorest of the poor. One has to have some income to qualify.
• even with subsidies, the poorest of the poor who are eligible are unlikely to sign up

Here's the example Forbes provided:

So, by analyzing your income first, if you qualify for heavy subsidies, the website can advertise those subsidies to you instead of just hitting you with Obamacare’s steep premiums. For example, the site could advertise plans that “$0″ or “$30″ instead of explaining that the plan really costs $200, and you’re getting a subsidy of $200 or $170. But you’ll have to be at or near the poverty line to gain subsidies of that size; most people will either not qualify for a subsidy, or qualify for a small one that, net-net, doesn’t make up for the law’s cost hikes.

Forbes focused on whether one would qualify for the subsidy in the first place. The fact is, once you have your insurance policy, rich or poor, you have the same co-pays and/or deductibles as everyone else in any given plan. My hunch is that anyone who qualifies for a $30 premium (regardless of the true cost of the plan) is not going to be able to make the co-pay or the deductible. My hunch is that that clinic will waive the co-pay/deductible; the clinic will be happy to get 90% of the cost of the visit back from the insurance company. But that assumes the individual who qualifies for the $30 premium actually pays the premium. My hunch is, at best, a healthy individual on the margin (financially) will pay two or three months before dropping out. The only financially marginal enrollees will be folks with pre-existing conditions in which they will get thousands of dollars of care in exchange for a $30 premium. It doesn't take a rocket scientist to note this system will not last long.

Under ObamaCare, one can start to sign up now. As of January 1, 2014, the insurance companies underwriting these subsidized policies will start having to pay physicians, clinics, and hospitals for the bills that start to come in. I think by July 1, 2014, we will know how ObamaCare has worked out.

The good news: there are some incredibly inexpensive plans for healthy males and healthy females born after 1980.

Back to something else the Forbes article did not mention: once enrolled, the federal government now has additional digital data regarding your status, regardless of whether you complete the process to actually purchase insurance. Do you remember the story on the first ObamaCare enrollee? He enrolled, but said he did not purchase any insurance. He wasn't ready to buy any insurance; he just wanted to check things out. He was the $28,000/year free-lance movie director out in California, who, until now, had his health insurance paid for by his dad. My hunch is he will not purchase a health insurance policy in 2014. He's healthy.