When it comes to Obamacare, the devil is in the details.
As the years go by, Americans are quickly recognizing that not only is Obamacare not helping them out, it’s actually crushing their paychecks to such an degree they’re finding it necessary to pursue alternatives. This has resulted in a mad dash into non-ACA compliant short-term health insurance plans, or the kind of plans Obamacare was specifically designed to replace.
Before we get into that, it’s important to understand just how unaffordable and useless Obamacare actually is for millions of Americans. First, let’s revisit a few excerpts from last month’s post, The Health Insurance Scam – “Coverage” Doesn’t Mean Affordability or Access:
The Affordable Care Act hasn’t just caused premiums to skyrocket across the country, out-of-pocket costs are also on the rise.
According to Freedom Partners, an Arlington, Va.-based pro free-market non-profit, 41 states are facing higher deductibles in 2016 – 17 of which saw a double-digit hike.
“Higher Obamacare deductibles increase, by hundreds of dollars, what families must pay out of pocket to access their health insurance,”Freedom Partners Senior Policy Adviser Nathan Nascimento said in a statement. “Instead of reducing costs, Obamacare regulations and mandates continue to drive up these costs and make quality care less accessible for hardworking families.”
For some additional insight, let’s turn to a New York Times article published last year titled, Many Say High Deductibles Make Their Health Law Insurance All but Useless:
WASHINGTON — Obama administration officials, urging people to sign up for health insurance under the Affordable Care Act, have trumpeted the low premiums available on the law’s new marketplaces.
But for 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.
“The deductible, $3,000 a year, makes it impossible to actually go to the doctor,” said David R. Reines, 60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. “We have insurance, but can’t afford to use it.”
Brilliant, just brilliant. So what are consumers faced with either an unaffordable and unusable Obamacare plan, or no insurance at all doing? They’re shopping for non-ACA compliant short-term plans.
The Wall Street Journal reports:
A type of limited health coverage with features largely banned by the Affordable Care Act is flourishing, as some consumers grab onto an alternative they say is cheaper than conventional plans sold under the law.
Sales of short-term health insurance are up sharply since the health law’s major provisions took effect in 2014, according to insurance agencies. New sales figures show the temporary policies, traditionally sold to consumers who are trying to fill coverage gaps for a few months, have continued their surge recently—even though people who buy them face mounting financial penalties because the coverage doesn’t meet the ACA’s standards.
Robin Herman, the 34-year-old owner of a marketing firm in San Francisco, bought a short-term policy in December. The monthly cost of her short-term coverage, plus conventional ACA-compliant plans for her two children, is roughly one-quarter of what she would have paid for conventional health plans covering all three of them, she says.
“This is saving me a ton of money for the year,” she said, despite the penalty. Plans that comply with the health law’s rules cost more than her old pre-ACA policy and are “just not affordable,” she said.
“This is exactly the kind of coverage the ACA was designed to get rid of,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation.
Thanks for playin’ America.
The short-term policies’ limits help keep premiums down. A survey by eHealth Inc. this year found that 51% of purchasers cited price as their reason, versus 39% who said they needed only temporary coverage.
EHealth said the number of people applying for short-term policies on its site last year was nearly 147,000, slightly down from 2014 but more than double the figure for 2013, before the ACA took full effect.
HealthMarkets Inc., a national insurance agency, said short-term sales in 2015 were about 150% higher than in 2013. GoHealth LLC, a major health-insurance site, saw a “substantial increase” in short-term policy sales in 2014, and again in 2015, said Michael Mahoney, a senior vice president.
In addition, if consumers develop health problems they can move to ACA plans that cover pre-existing conditions.
Right, so at the moment there appears to be little downside to buying the short-term plans since you can just swap into an Obamacare plan if you develop a serious condition down the road.
That holds a risk for the ACA’s insurance marketplaces. The short-term plans can siphon off healthy people who are needed to help make the ACA insurance business work. Those consumers then add to the costs of ACA plans if they buy coverage only when they have health needs. “You cause some real problems for the market,” said Timothy S. Jost, a professor at Washington and Lee University.
Obamacare is unraveling before our very eyes. Don’t say you weren’t warned…