Is The Affordable Care Act Affordable?

Lee C. Rogers DPM

The Affordable Care Act (ACA) isn’t all roses. In fact, it might be half roses and half weeds. However, in California this week, Covered California, the statewide private insurance exchange, released pricing for the individual insurance market. This resulted in both consumers and advocates smelling roses.

While most Americans are covered through employer-sponsored group plans or Medicare, a large percent of uninsured patients are younger and unemployed, self-employed, or are not offered employer-sponsored plans. The ACA created state-run exchanges, which would be set up by October 1, 2013 for implementation on January 1, 2014. These exchanges will include private insurers that wish to cover individuals under the rules that the ACA set up. There are no exclusions for preexisting conditions. There are no lifetime caps, no yearly caps and insurers cannot rescind your policy if you become sick.

Individual plans are historically very exclusive and expensive. Many people who are self-employed unfortunately fall into the individual insurance market. Insurance companies have rejected applicants due to seemingly insignificant prior illnesses, like tonsillitis or even acne. When I first moved to California, I was rejected for individual coverage because I had reactive airway disease as a child. I had to create a group and we covered our partners to avoid the exclusion. Individual policies could be as much as $15,000 per year if you are lucky enough to qualify.

The California exchange will have 13 commercial plans including Anthem Blue Cross/Blue Shield of California and Kaiser Permanente.1 It will give consumers access to about 80 percent of doctors and acute care hospitals in California. Notably absent from the exchange are some big insurers like UnitedHealth, Aetna and Cigna, all of which opted out.

The premiums unveiled last week were lower than expected.2 A 25-year-old could pick one plan with catastrophic coverage for $117 a month or a more comprehensive plan for $147 a month. There are federal tax credits available for those who meet income criteria. For example, a 40-year-old earning 200 percent of the federal poverty level would end up paying only $90 a month. Other plans that have coverage consistent with employer-sponsored plans will be available for less than $4,000 per year.

There are still plenty of problems with the ACA but given the partisanship in Congress, it is unlikely that lawmakers will pass any “technical corrections,” which are common to fix small problems after big bills pass.3


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