In a previous post, Cluster wrote:
Now don’t get me wrong, if the ACA would have increased competition and allowed me to shop from a cafeteria menu of coverages and policies at lower premiums and reasonable deductibles – I would be for that. But that would have been a free market approach. As it is, the ACA is a Statist approach, so choices will fewer and costs will be higher. At least for most of us.
I wonder if Cluster has actually investigated coverage on ObamaCare.
I am currently semi-retired, meaning I work 20 hours a week. A nice thing about this is that I retain all of my employer-provided benefits, including health care. (And you thought all employers were cutting out health care for their part-timers, didn’t you. :-)) Of course, I’ve been thinking of retiring completely for a while.
One of the biggest concerns related to retiring early is health care. Typically, an early corporate retiree will go on COBRA in order to continue their company-provided health care coverage for as long as possible. The retiree enjoys the exact same health care he had as an employee, but must pay all of the costs, including the portion that was previously paid by the employer. In my case, the monthly cost to continue health care via COBRA would be $907 per month. (This is the cost to cover myself only.)
COBRA lasts a maximum of 18 months. Once COBRA eligibility is used up, a retiree younger than age 65 must seek out health care on the individual market. Prior to ObamaCare, this was a somewhat daunting task filled with unknowns. The problem was that in California, where I live, insurance companies were under no obligation to provide individual insurance, regardless of costs. People in their fifties and early sixties are exactly the kinds of people that insurers avoided on the individual market. For example, the Kaiser Permanente website explained,
“[T]hese plans [individual and family coverage] do go through medical review and those with serious pre-existing health conditions are often denied. The only automatic denial stated by Kaiser underwriters is current pregnancy, but those with serious health conditions such as cancer, HIV, heart problems, obesity, etc. are often denied. If denied, your only chance of getting healthcare coverage may be to find employment (for you or your spouse) that offers a group medical plan or to apply for Medicare or Medi-Cal.”
It’s hard to reach the age of 55 or 60 without some history that would be deemed a pre-existing condition. And most retirees need to consider both their own health as well as that of their spouse.
Acknowledging the uncertainty of the individual market for retirees, my company has for the past several years offered a retiree health care plan through Aetna for retiring employees 55 years of age or older. The main selling point of the plan is that there is no medical underwriting. All retiring employees are accepted regardless of their current health status or their history.
The cost of the Aetna plan is $1538 per month with an annual deductible of $3950 and maximum out of pocket of $6250 in-network, $10,000 out-of-network. After the deductible has been paid, I would then generally pay 20% of the services provided, though for some services I would pay 40%. This is just to cover myself. Sounds like a good deal, doesn’t it?
Now we have ObamaCare. I live in California, which set up its own exchange, Covered California. I went to coveredca.com and checked out the plans. Several insurance companies offer them; There are 26 plans available to someone my age living in my area. The most expensive coverage is a Platimum 90 plan. No deductible at all. Maximum out of pocket of $4000. $20-$40 copay, though no copay for preventative care. (Aetna would charge me 40% for preventative care.) I can get a Platinum 90 plan for $785 per month–about half the cost of the Aetna plan. This is sounding pretty good.
But let’s look for a plan with similar characteristics to the Aetna one. That would roughly be a Bronze 60 plan with a deductible of $5000 and maximum out-of-pocket of $6350. I can get one of those for as little as $464 per month. All of these plans have the same main selling point of that Aetna one–no one can be denied coverage. They just cost a lot less. I’m liking this. A lot.
Now let’s look at Cluster’s situation. I happen to know in which state and county Cluster lives. That state chose not to set up its own exchange, so I shopped for Cluster plans on healthcare.gov. Assuming Cluster is age 50 or over, there are 119 plans available available to him, ranging in price from $178 to $567 per month. What were you saying about competition, Cluster?
There are a lot of choices, but Cluster could get a Platinum plan with $20/$40 co-pays and a deductible of $2000 for $348 per month. A Bronze plan can be had for $237 a month. These prices assume that Cluster would not qualify for any subsidies. Only Cluster could tell us how that compares to his current plan, but as a Californian, I’m thinking I should move into Cluster’s old house when he leaves the country.
I notice they’ve been making improvements to healthcare.gov. A couple of weeks ago, it wasn’t possible to shop for plans without going through the application process. Now you can. It’s actually quite easy and I was able to find 119 plans for Cluster in about a minute.
Apparently, a minute is too long for many people to learn about their options. Instead, they’d rather go on television and demonstrate their ignorance to the rest of us. An example is a recent piece on Sean Hannity’s show about the ObamaCare “train wreck”–his favorite phrase these days. He interviewed six people who recounted their ObamaCare “horror stories,” including tales of “canceled policies, premium hikes, restrictions on the freedom to see a doctor of their choice, financial burdens upon their small businesses and so on.” As journalist Eric Stern put it upon viewing the segment, “none of it smelled right to me.” So he decided to investigate.
It turns out that none of the folks on Hannity’s show had bothered to look into their ObamaCare options. One couple, Paul and Michelle Cox, who own a small business, complained to Hannity that “they can’t grow their construction business and they have kept their employees below a certain number of hours, so that they are part-timers,” all because of ObamaCare. But as Stern points out in his article,
Obamacare has no effect on businesses with 49 employees or less. But in our brief conversation on the phone, Paul revealed that he has only four employees. Why the cutback on his workforce? “Well,” he said, “I haven’t been forced to do so, it’s just that I’ve chosen to do so. I have to deal with increased costs.” What costs? And how, I asked him, is any of it due to Obamacare? There was a long pause, after which he said he’d call me back. He never did.
None of this matters to Hannity, of course, as he depends upon the ignorance of others for a living. And it may not matter to Cluster, as he may well have perfectly fine health care coverage and no need to shop for something different. I wouldn’t look too hard myself, either, if I wasn’t contemplating leaving the corporate cocoon. But hopefully Cluster has, or will, do his own research so that he can come to an informed opinion. I hardly think he’s in the same category as the Hannity know-nothings. As for me? I’m liking what I see.