'I can't afford that': Premiums soar under health law for those on individual market

News-DemocratNovember 2, 2013 

— Those insurance company letters have been landing with a thud in metro-east mailboxes for weeks now.

Sharon Reed, of Mascoutah, got hers from Blue Cross/Blue Shield of Illinois a few weeks ago. It informed her that, beginning Jan. 1, her monthly premium would shoot up to $472.19 from the current $255.61 -- an increase of almost 85 percent.

Reed, 62, doesn't know how she's going to pay for her higher premiums.

"I'm going to have to go to the government for assistance," Reed said. "I can't afford that. I can barely afford the $255.61 a month."

Reed is among the roughly 9 million Americans -- or about 3 percent of the nation's population -- who subscribe to individual insurance plans and who will be paying substantially more in health insurance costs next year as a direct result of the Affordable Care Act, also known as Obamacare.

Reed, like many other health insurance customers, is finding out first-hand how far off the mark President Barack Obama was when he promised that Americans who liked their insurance plans could keep them under the health care overhaul he spearheaded.

Reed will pay more for insurance because she will be required to buy a higher-quality policy than her current plan -- one that meets ACA's much tougher requirements for individual plans, such as banning any plan that requires individuals who get sick to pay more than $6,350 annually in out-of-pocket expenses.

Reed, however, doesn't see the logic of her being forced to pay for a higher-quality insurance plan that she doesn't want and that contains features she doesn't need.

"If I have to get government assistance to pay for this, how is this going to help taxpayers whatsoever?" she asked.

Problem is, Reed right now has no way to find out how much in assistance, if any, she is qualified to receive. Healthcare.gov, the government website that is the portal to the Affordable Care Act for most Americans, is plagued by glitches and remains inaccessible to most consumers.

Jim Brasfield, a professor of management and political science at Webster University, in Webster Groves, Mo., said the website's problems might not be a big deal for Obamacare, especially if they're fixed in the next month or so.

But if they're not, he said, "then that's going to be hugely fatal to the long-term future of it."

Jim Rachell, 71, a retired AT&T worker from Freeburg, is ready to throw the towel in on Obamacare right now.

Rachell said he's been notified by his former employer that his annual health insurance premiums will increase by nearly $1,700 next year. Currently, he's paying $22 per month for supplemental health insurance offered by Blue Cross/Blue Shield.

Beginning in January, his monthly premium shoots up to $162 -- an increase of more than 730 percent.

"I'm sure that AT&T did not have to raise them that much," Rachell said. "What I'm saying is that Obamacare gave them the means to do it."

Defenders of health overhaul concede that millions of Americans who subscribe to health insurance on the individual market will end up paying a lot more for health insurance because of ACA.

In many ways that's a good thing because the plans they were paying for, whether they knew it or not, were deeply flawed, or in Brasfield's words, like "Swiss cheese" -- full of holes.

"But people don't know until they need it," he said. "They think they have such a great deal on fire insurance, better than their neighbors. But if their house burns down on Tuesday, the insurance company says, 'Sorry, you have a Monday-Wednesday-Friday policy."

The ACA has two major goals.

First, moving a large percentage of the 47 million Americans lacking health insurance into some sort of coverage, whether into an expanded Medicaid programs, the federally -paid program for the poor, or through individual health plans subsidized with tax credits, which gradually taper out for an individual earning $44,000 annually.

Brasfield said it's reasonable to expect at least 30 million of the 47 million Americans not currently covered by health insurance will be covered by some type of plan because of the Affordable Care Act.

Second, the overhaul aims to flatten and slow -- but not reverse -- the nation's total health care spending. Last year, Americans spent nearly $2 trillion on health care of all kinds, accounting for about 18 percent of the nation's gross domestic product.

"If five years from now we're still at about 17.5 percent" of GDP spending, "which is where we've been in the last year or so, bending and flattening the cost curve, that will be seen as a real gain," Brasfield said. "Because if you don't have that, if the trajectory goes back to where it's been over the last 50 years, inching up each year, we're going to see ourselves over 20 percent of GDP."

Jonathan Gruber, the Massachusetts Institute of Technology economist who is one of the law's chief architects, acknowledged that it's creating "winners" and "losers" in the marketplace.

But 97 percent of Americans will either see no change in their health care costs or get better coverage. That leaves about 3 percent who will be paying a lot more for higher quality coverage, Gruber told The New Yorker magazine recently.

"We have to as a society be able to accept that," he told the magazine. "Don't get me wrong, that's a shame, but no law in the history of America makes everyone better off."

But the fact the Obama White House downplayed the sticker shock so many Americans would be seeing does not reflect well on the law's roll-out, or auger well for its future, according to Anthony Lo Sasso, a health economist at the University of Illinois at Chicago.

"They were certainly disingenuous in their messaging about how you can keep your plan if you like it," Lo Sasso said. "It was very clear that a regulatory decision was made to basically not grandfather in existing non-group plans, or the vast majority of them ... I think the way was sneaky, a little bit underhanded."

But the big test for the ACA still awaits in the months ahead, when tens of millions of Americans who previously weren't covered by health insurance suddely find themselves in untested health delivery systems.

"Are there delays?" Lo Sasso said. "Are they having trouble getting appointments? Do they have to wait until June to get that appointment? ...Will the doctors they want be covered by their plan?"

Belleville News-Democrat is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service