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How to Spot a Fake Obamacare Horror Story

How to Spot a Fake Obamacare Horror Story

Written by Igor Volsky

Since insurers have begun informing beneficiaries that their health care plans do not meet the new federal requirements of Obamacare, and will be either cancelled or significantly altered, the media has profiled countless middle class Americans who claim that the new health care law will force them to pay more for coverage.

Deborah Cavallaro, for instance, a real estate agent from Los Angeles, was enrolled in an individual plan that cost her just $293 per month. Under Obamacare, Cavallaro says she’ll have to pay over $400 for coverage she doesn’t need or want. But a higher premium doesn’t tell the whole story: while Cavallaro may spend more each month, she’ll be buying more comprehensive insurance with fewer out-of-pocket costs, better benefits that will cover more and cost her less if she actually falls ill, and much more robust consumer protections.

So before you buy into the sticker shock hysteria, here are four questions you should ask:

1. What does the old plan actually cover? Most of the policies in the existing individual health care market — which are currently issuing notices — offer low premiums, but also come with skimpy benefits and high out-of-pocket costs. These plans often have low limits for outpatient treatment, hospitalization or don’t offer any benefits for procedures like colonoscopy, chemotherapy or mental health treatment. Insurers market these policies to young and healthy people who don’t use their coverage — and never know the true extent of their benefits. (The market is also fairly mobile, with just 17 percent of individual subscribers purchasing the same plan for two years or longer).

Under the Affordable Care Act, insurers cover 10 essential categories of benefits, offering far more comprehensive coverage than what’s available in most individual insurance plans.

2. Did this person go to the exchanges? Insurers informing policy holders that their health care costs will go up often direct beneficiaries to their other brand products without telling them about competitive options and prices available through the exchanges. Cavallaro, for instance, got a quote from a broker, but did not explore the available options on her own.

Prices are lowest in areas with the most insurer competition. An analysis from the McKinsey Center for U.S. Health System Reform found that “new entrants into the market make up 26 percent of all insurers,” and “tend to price their plans lower than the median premiums in their market.” The average premium in the exchanges is 16 percent lower than previously projected.

3. Yes, the premium is low, but what are the co-pays and deductibles? This coverage often forces individuals who do use care to meet high deductibles — the amount you pay out-of-pocket before your insurance kicks in — pay high co-pays and co-insurance or limit the number of doctor visits that are allowed. Cavallaro, for instance, must meet a deductible of $5,000 a year and has an out-of-pocket cap of $8,500 a year. The plan covers just two doctors’ visits and each include a $40 co-pay.

As the LA Times’ Michael Hiltzik points out in California, Cavallaro could sign-up for a Silver level plan with a $2,000 deductible, maximum out-of-pocket cost of $6,350, pay $45 for a primary care visit and $65 for a specialty visit — “but all visits would be covered, not just two.”

The health law sets exchange enrollees’ maximum annual out-of-pocket costs at $6,350, and silver plans have deductibles ranging from $1,500 to $5,000.

4. Does this person qualify for subsidies? Americans between 100 and 400 percent of the federal poverty line ($46,000 for an individual, or about $78,000 for a family of three) qualify for tax credits under the law. Six of the 7 million individuals who are expected to sign up for insurance through the exchange will receive an average tax credit of $5,290 per year.

Cavallaro “qualifies her for a hefty federal premium subsidy,” Hiltzik reports and can purchase a silver plan for $333, $40 more than she’s paying now. A cheaper bronze plan would be in the $200s.

This post was originally published in ThinkProgress

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Photo credit: Thinkstock

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146 comments

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3:05PM PST on Nov 7, 2013

ty

7:28PM PST on Nov 6, 2013

Obama care sucks! We were lied to, that if you liked your insurance plan you have, that you'd be able to keep it. Now it turns out that to be a false statement, a lie. People's insurance policies are being cancelled and they are "FORCED" to choose one of his plans. What a liar we have for our president.

12:19PM PST on Nov 6, 2013

Last thought, I am an accountant and pay health insurance for the company I work for, premiums have increased every single year since that I have been doing this job, and that is over 12 years, the reason that insurance companies have increased premiums is because doctors and hospitals build into their charges all of the people they treat probono, people who come to the emergency rooms sick, some dieing, with no insurance. Nothing is free, someone has to pay, and if you have insurance you are already paying for the uninsured. Sorry folks there is no free lunch. I have insurance, people with out insurance get off my back and pay for your own medical, get your own insurance, I am tired of hearing that you don't need it, while you put my insurance costs in jeopardy by being uninsured.

12:13PM PST on Nov 6, 2013

Let's see $293.00 a month for two office visits with a $40.00 copay, a $5,000. deductible, and a $8,500. out of pocket cap. vs $450.00 (let's say) a month for any number of office visits with a $45. copay, a $2,000 deductible, and a $6,350 out of pocket cap. Let's add up the monies

Current plan costs $3516.00 per year, but has a $3,000 higher deductible, that makes it $6,516.00, plus let's figure 5 office visits a year $90.00 plus pay the full amount for each visit thereafter at about $150.00 per visit, total $450.00,
New plan costs $5400 per year, but you save $3,000 in the deductibles, and let's just figure 5 office visits a year at $45.00 that would be $225.00.
then let's figure the difference in out of pocket caps....$8500.00 vs $6,350.00
The savings on out of pocket is $2,150.00
The difference in premiums based on $293.00 and (random figure for over $400.00) of $450.00 per month is $1,884.00, and by the way this is tax deductible.
For me it is like taking minimum car insurance, vs covering enough to insure oneself against real lose.

12:01PM PST on Nov 6, 2013

I read a story about a patient loosing their Doctor because of loosing her insurance. Then it suddenly struck me, that if all of the polocies that do not meet the standards set by law are cancelled, and all the doctors patient's loose these health plans, and the Doctors are not going to accept the new health plans that the insurance companies are now going to offer on the exchanges, who are the Doctor's patients going to be. It is illogical that Doctors will not accept the new insurance plans, most of them are being underwritten by the same insurance companies that are cancelling the polocies that don't meet the new criteria. Years ago, I shopped for personal health insurance, it was called catastrophic, extremely pricey for the insurance that was being offered, it did not cover office visits, only hospitalization, and that with an extremely high deductible, and out of pocket expense level, reviewing the policy I opted not to pay for something I did not consider worth having.

7:30PM PST on Nov 5, 2013

Gosh, hope John doesn't plan on using Social Security, Medicare, or Medicaid. That's for sure the government telling you what to do medically.

Please let me know where you drive. Since you don't want to obey the government, I don't want to be around when you drive.

There's a lot more but you get the drift.

6:29PM PST on Nov 5, 2013

Exactly, Cheryl L !!! ........ Maybe John, himself, was one of the ones from the UFO mentioned on his Avatar ???

6:13PM PST on Nov 5, 2013

ty

5:14PM PST on Nov 4, 2013

Humm?

2:43PM PST on Nov 4, 2013

John H. --- You're spouting and spewing, yet you don't give details as to what happened and exactly how did you get screwed over on the policy you had? Or are you just another Republican spewing hatred towards the President and you have no problem with your insurance at all? Unless you've got specifics and can compare apples to apples and give us this huge increase you've gotten ... you're just blowing hot air and hatred.

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