Social Commentary

Navigating Change in Health Insurance — Part 6

December Garden
December Garden

LAKE MACBRIDE— On Dec. 15, 2013 the person from the health insurance exchange with whom I spoke on Nov. 20 called back to say the website was fixed so that I could modify the income on our application. I deleted my old application, refiled, and we were qualified for a family policy on the exchange, with 30 different offerings to consider. We picked one, and are waiting for the payment to clear the bank to be assured that we are signed up. We canceled our current policy in anticipation of the new one. What changed? We can’t afford to turn down the tax credit which makes the policy affordable.

That is not to say the change was a perfect deal. The new policy cost is 28.5 percent more expensive than our current one would have been, and the coverage is less, with a higher deductible and maximum out of pocket. Without the government tax credit, we would have kept our current coverage for another year until Wellmark recalculated the cost of full compliance with the Affordable Care Act and raised their premium accordingly. Then we would participate in open enrollment to weigh our options.

In addition, the tax credit is based upon our projected income. If we generate more income than planned, we are required to report it, and that could trigger a change in our tax credit eligibility. Let’s say we are super successful and generate a lot of income in 2014. We will be stuck with a policy not as good as what we had, and paying more. Is it possible one of us could secure employment for a company with health insurance benefits? It is possible, but unlikely in the current low wage-no benefit job environment.

The saving grace is there is open enrollment each year in the health insurance exchange. I don’t like the idea of switching insurance companies every year, but at our age, we are filling the gap before Medicare kicks in at age 65. When one has lived as many years as we have, taking a one-year chance on a policy compliant with the Affordable Care Act is a controlled experiment in managing our health care costs, one with little downside if we pay attention to our income vis á vis the tax credit. The policy we picked includes our current doctors and health care providers, so operationally there is no change in care.

What bothers me about the situation is the benefit is more to the insurance providers than to citizens. We will pay more to an insurance company we would not normally have picked, with most of the money coming from the U.S. government.

This is the first time in my life outside the military to have participated in a government program, and I don’t like it. Why? It is a first step toward an inevitable dependency on government programs like Social Security and Medicare, and I have always tried to make my own way. When considering the points of entry I’ve had into the workplace— after military service, after graduate school, after a long career in transportation— there has never been an opportunity for a job that would have led to a different result. In the post-Reagan era the perquisites of working for a company have one-by-one been eliminated or diminished.

With the decision about health care made, this will be the last in the series of posts. It’s time to go on living, reminded again of how much we are on our own in a turbulent world. At least we have the quiet of winter and the solace it can provide to comfort us.

Social Commentary

Navigating Change in Health Insurance — Part 5

Obamacare Upheld
Obamacare Upheld

LAKE MACBRIDE— According to the Dec. 11, 2013 issue of the New York Times, “nearly 365,000 people picked a health insurance plan through state and federal exchanges established by the Affordable Care Act (ACA) through the end of November. While the pace of enrollment picked up last month, it is still a fraction of the 1.2 million target that the Obama administration had set for the first two months.” In Iowa, the target was 6,970 individuals enrolled with only 11 percent attainment (757 individuals). What’s going on?

In 2012, the American Community Survey,  found the number of uninsured people in Iowa was 254,275 uninsured, or 8.4 percent of our population. I’m not a statistician, but enrolling about 7,000 by Nov. 30 seems a reasonable target. Out of the whole, there are some, where household income exceeds $50,000 (91,073 uninsured), and non-citizens (28,901 uninsured), who would not be eligible. Nonetheless, enrolling only 757 individuals is an embarrassingly low number.

The enrollment period for coverage Jan. 1, 2014 was extended after the website trouble until Dec. 23, so some may have delayed to use this time. I submit, at its core, the problem is a cultural issue, rather than policy. Here are my thoughts:

People I know don’t understand health insurance is mandatory in 2014, and if they do, the perception is there is no reason to get it given the slight penalties.

Wellmark, the largest health insurance company in Iowa is not in the exchange, indicating that if one has insurance where the policy is grandfathered, it may be better to wait to change policies until Wellmark enters the exchange for the 2015 calendar year

The exchange requires some married couples to move from a joint policy to individual policies. That doesn’t seem right, and it was not explained well, if at all. Why change unless one understands this aspect of the ACA?

The folks at the exchange I spoke with were not prepared to deal with the idea that some people do not know how much income they will have in 2014, thus creating uncertainty about the amount of the tax credit, and how much will be paid out of pocket. Uncertainty for this and other reasons will be an obstacle to enrollment.

There have been success stories about people who have benefited from the Affordable Care Act, using expanded Medicaid and the insurance exchanges. On the ground level, the failure to attain targeted enrollments seems to be a failure on the part of government to recognize that enrolling in the exchange is not intuitive, and that people who may qualify for insurance may also need persuasion. This is particularly true given the all-out assault on the Affordable Care Act by some Iowans, including Rep. Steve King (R-Kiron).

Too, where is Organizing for Action? While enrolling people in the Affordable Care Act may not be their primary mission (Organizing for Action is the grassroots movement to pass legislation relating to the Obama administration’s agenda), failure to gain a better degree of compliance with the ACA will result in a policy failure for the administration, and hinder OFA’s progress going forward. OFA has a self interest in the success or failure of the ACA. Having missed identifying the need for persuasion, it seems doubtful anyone in the administration picked up the phone to call OFA.

With the deadline for Jan. 1 2014 coverage less than two weeks away, what’s a person to do?  For me, that means keeping the policy I have for another year, even if we qualify for a less expensive policy on the exchange. For the tens of thousands of Iowans who don’t have health insurance it remains to be seen. While the benefits of the ACA are pretty clear, even those who would be helped the most by the law are just not buying it.

Click on the links to read Part 1, Part 2, Part 3 and Part 4.

Social Commentary

Navigating Change in Health Insurance — Part 4

Kathleen Sebelius in Cedar Rapids (2008)
Kathleen Sebelius (2008)

LAKE MACBRIDE— The folks at the insurance exchange caught me in the barn yard, and we had a conversation about the challenges of not knowing what my 2014 income will be. The operator said, “we didn’t anticipate that people wouldn’t know how much they would earn in 2014.” She said they were working on the software to enable us to revise our application and someone would call me back when it was fixed. It has been a couple of weeks since that conversation, so we are in a holding pattern.

The impact of the Affordable Care Act (ACA) on most people I know is nil, mostly because they already have a health insurance policy that complies with the ACA. The requirement to get health insurance is vaguely understood, and there have been zero times someone has talked about the financial penalties for not having insurance. There has been no impetus for people to sign up for a policy any different from before the open enrollment period began Oct. 1.

There is a fee for not having health insurance, and it ranges from $95 or one percent of income up to the cost of buying a specific plan (whichever is higher) in 2014, up to $695 or 2.5 percent of income in 2016. People who pay a fee will also be required to pay the entire cost of their health care. What isn’t clear is how emergency rooms will deal with the group of patients who show up at their doors for treatment without insurance— something else people are not talking about.

What we know is the Dec. 15 deadline to change policies for Jan. 1 will be here soon, and action will be required. The easy decision would be to keep our current health insurance policy. That postpones things for a year, providing time for the bugs to work out of the system. It’s our default position.

When the exchange calls me back, I’ll re-do our application, which will finalize eligibility and costs, and enable us to make a decision to change or hold our policy for another year. Until then, we watch, learn and wait.

Click on the links to read Part 1, Part 2 and Part 3.

Social Commentary

Navigating Change in Health Insurance — Part 3

Obamacare Upheld
Obamacare Upheld

LAKE MACBRIDE—Like many, I worked hard during the post-911 Bush administration to elect a Democratic president. Investing a lot of myself in politics through the 2004, 2006 and 2008 election cycles, I’m not ready to give up on President Barack Obama now. Not even close. Including this time of implementation of the Affordable Care Act (ACA), something that has already made my individual health insurance policy better.

There are open questions about the changes. As answers are found, in almost every case, the news has been good. For example, my doctor is in the exchange and the exchange policy costs look to be substantially lower that my current policy, with better coverage. Even so, some don’t think the reality of the Obamacare roll out is as good as it is. (ACA = Obamacare, in case you missed it).

Heritage Action, the political action wing of the conservative Heritage Foundation wants us to be scared of the ACA, asserting a basic falsehood about it. “Scarier than any Halloween costume or ghost story, millions of Americans are receiving letters in the mail from their insurance companies saying that their health insurance will be dropped or that their premiums will skyrocket,” Heritage Action wrote in an email the day before Halloween.

What they don’t say is that those being dropped from current  health insurance policies are being done so because the coverage does not meet the standards of the ACA, and the insurance company has chosen not to align the policy with the new law. This is about the insurance company providing cut rate coverage at too high a price, not anonymous health insurance policy holders who can’t see past their own nose.

By my read, it appears that policy holders, pretty uniformly, will get a better deal under the ACA. The impact of the ACA will be to level the playing field so that a health insurance policy has the basic provisions outlined by the new law, disallowing insurance companies from providing mediocre coverage.

Despite their noise, the naysayers provide no alternative to the ACA. What they must know is that as the actuality of the ACA is revealed, the more people will like it, rendering their scare tactics irrelevant. There is evidence insurance companies will like it too.

I was stunned by the rate increase we received from Wellmark Blue Cross and Blue Shield on our individual policy. At 6.8 percent it is the lowest annual rate increase we have had since first buying the policy in 2009. According to a notice from Wellmark, “the only increase to your premium will be an adjustment to account for the new federal fees and taxes required by the ACA.” What the insurance company is saying is that except for Obamacare, they didn’t need a rate increase this year. Can the reform measures really be that good for insurance companies?

There are still a lot of questions to answer about health insurance reform as the ACA rolls out. It is pretty clear that the president will take a hit in the polls over it, whether it is warranted or not. As I have written in my two previous posts, getting facts and working through them is essential, and there is no hurry to make a bad decision. So far, navigating the implementation of the ACA looks like clear sailing.

Social Commentary

Navigating Health Insurance Change – Part 2

Insurance Agent Office
Insurance Agent Office

LAKE MACBRIDE— While gaining an understanding of how the health insurance exchanges may change our family budget, I decided to wait until the government worked through the initial computer problems evident at the start-up of open enrollment. Last night, the glitches seemed resolved.

I logged on to, created an account, applied, determined eligibility to choose a plan from the market place, live chatted with an agent who offered to have a specialist call me within 48 hours, and was ready to hit enroll on a plan (I didn’t) in less than 40 minutes. Given the challenges of the questions asked, the online experience met expectations.

When saying there were challenges, what I mean is  a projection of 2014 household income is required to complete the application. That may be easy for a wage worker in steady employment, but for self-employed people it can be a bit of a WAG (wild-ass guess).  Most people who work low wage jobs are focused on getting through the present and income forecasting is unfamiliar territory. We know how much we need to earn, but that is different from creating an accurate forecast of what we will earn, which is the question the ACA application asks.

There is an option to check a box that says, “I don’t know.” Because of the tax implications of the ACA, more specificity in the application can make it easier come tax time. That is, what we submit on the application impacts what, if any, tax credits might be available for the year. If we get it wrong, we will have to reconcile the tax credits taken to subsidize premiums with the government based on actual income. If income is understated, we may have to reimburse the government for part of the tax credit. The tax credits are an important consideration in the application process, as it impacts net health insurance policy pricing.  I plan to discuss this aspect of the application process with an ACA specialist in hope of getting it right, so I can take the tax credit now, and not have to reimburse it when we file our 2014 tax return.

Something else that wasn’t expected was that only one of the two of us was eligible for a policy through the exchange. We expected to change to a family policy, not two individual policies and this introduced another variable in the evaluation process. After resolving how to project income for 2014, I will ask my individual health insurance policy agent about costs for a replacement policy for one of us. Based on similar situations with which we are familiar, we could still save about $100 to $200 per month over our current health insurance premiums. It is worth pursuing.

As I mentioned in the first post about navigating the change in health insurance, getting facts and working through them is essential, and there is no hurry to make a bad decision. In a society where instant gratification is the expected norm, spending this time runs against the grain. However, it is the only rational way to make a decision, and some of us still believe using reason and common sense when making a decision that impacts our family still matters.

Social Commentary

Navigating Health Insurance Change

Wellmark PhotoLAKE MACBRIDE— As a self-employed writer and farm hand, having health insurance means buying an individual policy in the marketplace. The implementation of the Affordable Care Act’s (ACA) health insurance exchanges and initial open enrollment beginning Oct. 1 was a precipitating event for me and for others. There will be changes and some of them have little to do with the ACA.

There is a pent up demand in business to shed the cost of providing health insurance for employees, or to make it a fixed financial benefit. Already after Oct. 1, there is anecdotal evidence that small businesses are pulling the plug on group policies, and large businesses, like Mercy Medical Center in Cedar Rapids, are changing the rules for insurance benefits to exclude part time employees who are currently covered. If there is a way to stabilize or reduce the cost of having employees, businesses will find it, and the ACA appears to be providing the whipping post for moving forward to meet this long-standing want. Corporations and small businesses appreciate the opportunity this major cultural event represents. The days of employers providing health care to employees as a basic benefit are ending, if not over.

Wellmark Blue Cross and Blue Shield, Iowa’s largest health insurance provider, decided not to join the Iowa health insurance exchange during the first year. The expectation is the company will apply to be part of the exchange beginning Jan.1, 2015. In an interview with the Cedar Rapids Gazette last July, Wellmark CEO John Forsyth said, “the company was concerned about the lack of information available and the roll out of the exchange in Iowa.” Forsyth was skeptical of the federal government’s ability to implement the ACA smoothly. In addition to some website glitches in early October, some of the rule-making is incomplete. Wellmark’s decision is understandable from a business perspective, and the impact is that the network of health care providers available in the exchange during 2014 may be significantly reduced without Wellmark’s participation.

What’s a person with an individual health insurance policy to do? Wait. First, wait until December to look at joining the exchange on Jan. 1, 2014. Perhaps some of the details like provider coverage will be better identified to make the consequences of changing more understandable. Second, someone who has a grandfathered plan (no changes in policy since President Obama signed the ACA), may not want to change until there is more certainty about the outcome. The open enrollment period goes through March 2014 during the first year. Take advantage of that extra time. Third, resist the efforts of Wellmark and other providers to rush a decision to remain the same, or lock in rates. Whether or not the Iowa insurance exchange will offer lower rates for equal coverage is uncertain. No reason to make a decision until one gets enough facts about the rates and coverage, and compares apples to apples.

There were five insurance company sales representatives in a health care reform seminar last week, compared to yours truly as the only member present. Organizations who sell health insurance have a lot to lose with implementation of the ACA, and the move to a marketplace. These insurance agents answered all of my questions, and the information provided will help in making a decision about health insurance. Getting facts and working through them, as I did, is essential in navigating change in health insurance, and there is no hurry to make a bad decision.