3 Variables To Consider When Thinking About Obamacare’s Essential Benefit Plans


Supplemental InsuranceI try to be neutral with this Obamacare drama.  I prefer to people facts rather than political spin.  I believe that the vast majority of Americans are capable of determining what they need better than any out-of-touch politician in D.C.  However,  I must admit that I am sick of politicians only telling one side of the story.

If you listen to the Republicans, Obamacare is the end of the United States as we know it.  As far as they are concerned, the sky will fall on January 1, 2014.

If you listen to Democrats, everything is hunky-dory.  There are no problems, of any sort, coming along.

The truth is somewhere in the middle.

On October 1, 2013 the National Open Enrollment for the Obamacare Essential Benefit Plans will begin.  Here are some facts that the politicians try to down-play.

RATES

Our Health Insurance system, for people who are not on Medicare or Medicaid, is run by private insurance companies.  It is best understood as a bill-paying system.

When you enroll in health insurance, you are paying someone else to pay a portion of your medical bills for you.  (If you want the technical term, it is called Risk Transfer.)

The PPACA, also known as Obamacare, placed numerous new taxes and regulations on private insurance companies.  However, it stopped short of mandating the exact amount that they could charge to perform their bill-paying service.

The rates that Americans will see in September are rates that are calculated based on many variables.  The Obamacare variables are just part of what must be considered.

Private health insurance companies must also consider individual state laws, health care costs, provider networks, etc.

There is no question that when the National Open Enrollment begins, it is likely that you will be able to find a plan with premiums less than what you were expecting.  That assumes that you are willing to cover a lower “Actuarial Value.”

If you have a plan that covers 80% of your mid-range medical costs now, in order to keep a plan with a similar “Actuarial Value” (Gold Level) you will be forced to pay more since the Obamacare law requires insurance companies to cover things that may not already be covered.

BENEFITS

I am sick of hearing one of the justifications that politicians and extremists are parroting for the higher premiums.  They are constantly telling us, “Although premiums are going to increase, it is because Americans will have more benefits than they did before.”

That is true.  The Essential Benefit Plans all cover things that are not already covered, or have limited coverage.

For example, in my state, individual plans are only required to cover “complications of pregnancy.”  Under the Obamacare Essential Benefit Plans full maternity is required to be covered.

Obviously, the new plans provide valuable benefits for women in their child-baring years.  However, it raises the question, “Is it fair to make men, post-menopausal women and sterile females pay for a health insurance benefit that they could never use?”

There is no question that maternity is a nice benefit but is it “essential.”

Another thing that bothers me is that every American must pay for “substance abuse” coverage.  I realize that this type of benefit will help some people but I wonder if it is fair to make someone like me, who does not smoke, drink alcohol or do drugs, pay for that type of coverage?  Once more I am forced to ask, “Is it essential?”

The questions in my mind are moot.  The fact is, whether I like it or not, when my time comes, I have no choice but to pay for one of the Essential Benefit Plans.

SUBSIDIES

Another talking-point that I am sick of hearing is about the “subsidies” and how much they will reduce the cost of health insurance.  When I hear a politician spouting that garbage, without telling the entire truth, I tend to get nauseated.

When you hear some politician tell you that health insurance premiums are not that bad because of the “subsidies,” remember a few things.

  1. The insurance companies do not care where the money comes from.  The premium is not going to change.
  2. The “subsidies” are actually tax-credits based on your income from 2 years ago.  If you make significantly more money in 2014 than you did in 2012 and you took advantage of the “subsidies” you could find yourself with an I.R.S. penalty in 2015.
  3. The “Subsidies” are graduated.  That means that while the federal government may pay most of the premium for the poorest of the poor, if you are a middle-class American, the subsidy for you will only pay a portion of your premium.  You will be responsible for the balance.
  4. Government “subsidies” will not be available to everyone.  If you have the option of getting group health insurance through an employer or as a dependent on someone else’s plan, you will not be eligible for a “subsidy” whether or not you join the group.
  5. Government “subsidies” will only be available for certain plans.  The majority of Americans, who claim a “subsidy,” will be limited to the second least expensive Silver plan that is offered in their state’s exchange.  If you want a different plan, you must pay the entire premium yourself, without any government help.

The next time you hear someone talk about how ruinous or how great Obamacare is going to be, remember that there are two sides to every story.  You need to hear both to make an informed decision.

The conclusion that I have come to is that Obamacare is not as bad as it was predicted to be by the far right.  However, Obamacare is not as good as many of those on the far left claim.

I just find it sad that politicians are willing to play the game of politics with other people’s money and health care.

Strategy 2

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