Before you start celebrating the pending passage of a healthcare bill in Congress, you might want to make sure you have enough savings to offset the huge out of pocket costs coming your way.
Reports out of the Senate Finance Committee on what individuals and people would have to pay is not exactly a reason to pop those corks. Unless, of course, you’re a health insurance CEO already making the down payment on your seventh vacation home.
The Senate Finance Committee, considered to be the top dog on Capitol Hill on drafting the bill in the absence of Sen. Ted Kennedy,
“is considering an income threshold of 300 percent of the poverty level, or $54,930 in gross annual income for a family of three, to keep the legislation’s 10-year cost at $1 trillion.” Or $35,000 for a family of one.
Meaning if you are below that amount, you get a public subsidy to pay part of your premium. If you earn more, you’re on your own.
Premiums averaged $12, 680 for family coverage in 2008, or $4,704 for an individual, according to the Kaiser Family Foundation. That’s a national average; ratchet the number much higher if you live in, say, New York, Los Angeles, or San Francisco.
Even in the heat of the current debate, the insurers are not exactly exercising restraint, as in the report today that Anthem Blue Cross wants to raise rates an average 23 percent and as high as 32 percent on individual health insurance policies in Connecticut.
Next, remember these figures cover only premiums, not all the additional bills that are all-too-familiar for people with insurance now.
How much does that add? More than 17 percent of Americans under 65 already have high deductible plans, and the average deductible alone for those ranged from $1,923 for single policies to $3,883 for family policies, which for the most part you must pay before the insurer pays for anything.
That’s it, right? Not so fast. Then there’s the co-pays, doctor fees, lab fees, late fees if you miss your payment, bills that can literally nickel and dime you to death. Sound far fetched? Consider this added note from the Los Angeles Times:
“A co-pay as little as $10 can prevent a woman from getting a mammogram, according to a study published last year in the New England Journal of Medicine. Many other studies have shown that prescription drug co-pay increases of as little as $5 can dissuade older patients from filing prescriptions.”
Nurses can introduce you to a lot of those patients, people who won’t fill a prescription ordered by their doctor because of the cost, or who will take their meds every other day, or cut their pills in half to share with family members, reducing the effectiveness.
In fact, the story of the past year has been the crisis faced by families with insurance. As evidenced most recently in the study showing medical bills account for 62 percent of personal bankruptcies in the U.S., and three-fourths of those are people with insurance.
If you’re counting on the public option to hold down costs, the Wall Street Journal today quotes White House Chief of Staff reminding us that avenue remains highly tentative.
“The goal is to have a means and a mechanism to keep the private insurers honest,” he said in an interview. “The goal is non-negotiable; the path is” negotiable.
The upshot is the bill expected to pass can force people to buy insurance, but it won’t keep people from going broke when they have to go to the doctor. Or from paying their premium and skipping the needed doctor visits and waiting until they are so sick they end up in an emergency room. Or from just breaking the law and subjecting themselves to the fine.
All of these scenarios have occurred in Massachusetts, the laboratory for individual mandate where the state is reeling from the expense of subsidizing payments to the insurance giants, which responded by capping enrollment and limiting covered services.
There’s plenty of other danger points here as well. Also on the docket in the Senate Finance Committee bill, are:
provisions that could lead to higher insurance rates for adults in the 55-to-64 age category and higher out-of-pocket costs for certain people who buy their own insurance.
And, if you buy the cheapest plan, which you can bet many would, they may set a cap of covering only 65 percent of the premium.
But, don’t worry, they are offering “under one scenario” to limit out-of-pocket costs to “$11,600 for a family and $5,800 for an individual.”
Well, that will be a relief for all those women who already have to because of the $10-co-pays, and the people with the cheap plans that don’t cover such frills as dental work, eye care, or long term care.
Notice that all the plans talk about people who are under 65. That’s because at 65 another option is available, Medicare, which guarantees you basic healthcare coverage regardless of your ability to pay.
Though not a perfect system, it works, and is about to celebrate its 44th anniversary at the end of this month. Too bad Congress and the President have taken the idea of extending Medicare to everyone off the table.