I talk to a lot of people every day about health insurance. We talk a great deal about health care reform basics and available plan options and benefits. We most definitely talk about potential costs. And I’ve discovered the following:
Many believe that health insurance will be practically free
I mean it is called the Affordable Care Act right? And when I think of free, I automatically think “no cost.” Apparently, there are lots of other people who have the same idea. That’s terrifying.
Here’s the cost of Obamacare No One’s Talking About- the out of pocket expense
All available plans will have an out of pocket amount you must satisfy before the insurance company pays 100% of the remaining medical expenses. For example, today you might have a total out of pocket of $3,000 (which often is composed of a deductible and a percentage of remaining expenses- say 80%).
Big whoop, you say, that’s no different than today.
But tell me- isn’t the out of pocket a cost? Money out of my pocket = cost to me = Not free.
Yes, maybe you’ll get significant tax credits that will greatly reduce the premium. Maybe you’ll even get a subsidy that helps offset your out of pocket.
I think there will be a very SMALL percentage that get their health insurance free.
I think most of us will still pay. Something. And something else most have not considered…..
Your Out Of Pocket might be even more than your current plan
All plans 2014 and beyond must achieve a certain “actuarial value”, namely 90%, 80%, 70% or 60%. Without getting too technical, it’s entirely possible that to reach 80% (and it’s mandated by law mind you, so the insurance companies MUST comply), you would have to have an out of pocket amount of $7,000.
Yes, $7,000 is the amount you would pay out of your pocket. Perhaps currently you have a $5,000 out of pocket. Isn’t that a cost? And perhaps one you’ve not considered?
Bankruptcy due to medical bills is still a very real possibility
Let’s face it, even today a $2,000 out of pocket could be financially devastating for many people. Do you think it will get better or worse if out of pocket costs increase?
According to an article from cnbc.com called “Medical Bills Are the Biggest Cause of US Bankruptcies: Study”:
“Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year—making health care the Number 1 cause of such filings….”
Obamacare is not going to eliminate this problem. In fact, if out of pocket amounts actually increase (and you’re not getting any help from the government), I’m confident the bankruptcies due to medical bills will only increase.
Which is pretty damned unfortunate, because it certainly doesn’t live up to its name “Affordable Care Act.”
So if I accomplish anything from this article, I hope it’s that you get your head out of the sand and be aware of the following:
- There ain’t no free lunch.
- You WILL have some cost associated with your health insurance come 2014.
- It might be more than what you have now.