ACA Conundrums: Smaller Networks, Low Premiums, High Deductibles

Citizen Wealth Financial Justice Health Care

HealthPOD001New Orleans   As the countdown to enrollment in ACA comes closer with October 1st ringing the opening bell, low to moderate income families and workers without health insurance are facing a quandary of competing claims and conflicting news reports.   I read a report recently of a call from the White House to various groups including navigators in Louisiana that was meant to counteract disinformation ranging from whether or not the servers at HHS would crash on October 1st to how to meet the various obstacles being put on the road to healthcare in Louisiana.   Headlines warn of an advertising assault both pro and con Obamacare that will rival a political campaign.  One that I have seen is a grotesque caricature of Uncle Sam emerging from under the sheet of a gynecological exam of a woman with her legs still up in the air in stirrups is revolting in its creepiness and bad taste.

            In some ways, the reports that some insurers may be building smaller networks of doctors and hospitals that do a better job at controlling costs while giving good care seems a good thing, though the headlines are blaring fear.  I think we want good high quality, affordable care to be incentivized and have more people choose that route with lower premiums.  Certainly in states where there is less choice between companies, this will make the initial year of ACA more challenging, but we may be going in the right direction.

            More worrisome to me are low premium, high deductible plans being offered by some employers to nominally comply with the law’s mandates, while still shifting almost the entire burden of costs to workers.   One healthcare company that Local 100 is negotiating with currently has 45,000 employees and as they point out regularly to me as we argue over healthcare, we only represent 400.   Under constant harangue, they recently shared their power point deck with me describing their “high deductible” plan.  So, yes, it would meet the minimal requirements of the law by allowing all people with pre-existing conditions into the plan and, yes, the premium would be less than $100 for individual employees, but the deductible for the same worker would be $3000, which is exorbitant.   Most workers average more than 30 hours on a 35 hour workweek, but still make between $16000 and $20000 per year.   On the ACA affordability rule the $1080 or so that a worker would pay in premiums would be less than 9.5% of their annual income so would qualify technically as affordable, but geez, what about the deductible.  A worker making as little as $16000 might have to pay over $4000 or 25% of their income before they really got any health care benefits from such a plan.   For the company the calculations probably work out.  If they pay the same $1080 per employee by matching the 50% share on the premium, that’s less than the $2000 fine they would pay by not having a plan in 2015, so they probably think this is all aces. 

            For the workers though it’s a total rip-off, which will force them all to try to do anything they can to get into the Marketplace exchanges where they have a chance of tax credits and cost sharing.   The rules are so unclear for large employers that despite my examination thus far, I’m not sure what happens next?   Technically if a worker is offered job-based insurance that is technically affordable, meaning that it is less than 9.5% of annual income in cost and a qualified health plan in terms of basic benefits, then they are barred from the exchange.  On the other hand with smaller businesses that are mandated to offer coverage with less than 50 employees and more than 30, their plans fail if they cannot get 70% of the employees to agree to come into the plan. 

In the gray area now for larger companies on the one year delay all we can hope is that we can get workers into the exchange now and hope that the greed of the companies finds a just reward under the Act as push comes to shove in 2015.   At least that’s what I’m hoping, but I’ve got to admit that I’m not sure if we’re smiling or screwed as I look at this problem today.   My best advice is enroll in the marketplace in October and hope for the best!