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Will You Be Able to Afford Your New Health Insurance?

Posted Jan 21 2013 10:04am
Last November I wrote about my displeasure with the changes coming in 2013 to medical flexible spending accounts (FSA), the result of more provisions of the Patient Protection and Affordable Care Act (PPACA), a.k.a. Obamacare being implemented.  But those aren't the only changes looming on the horizon.  2014 and 2018 are also years when more big changes are coming.

I was quite taken aback when I found out the ceiling on health plan out-of-pocket expenses will rise to $6,000 for individuals and $12,000 for families starting in 2014.

First, let's answer the question: So what are out-of-pocket medical expenses?  They include things like deductibles, co-insurance, premiums and co-pays; they are the "cost-sharing" provisions in your health insurance plan.

I logged into our health insurance plan's website to see what our out-of-pocket maximums are for this year and discovered they are no where near the new 2014 $6,000/$12,000 limits.  Then I got worried.  What if my husband's employer decided to raise the out-of-pocket maximums to the new limits in 2014?  How much would we have to pay out-of-pocket before our health insurance benefits actually kicked in?  And how are we going to be able to afford to pay these higher out-of-pocket medical costs?

Adding insult to injury is that fact that this year, deducting itemized medical expenses on your Federal taxes is going to be much harder.  Before, you could deduct any expenses that where higher than 7.5% of your adjusted gross income.  Starting in 2013, that percentage rises to 10%.

So we are facing higher out-of-pocket medical expenses and a reduced ability to deduct them on our taxes.

So how did our legislators decide on these new out-of-pocket medical expense guidelines?  They were set based on rates associated with high deductible health plans.

According to Kaiser Health News , high-deductible plans are becoming the new trend in health care coverage. They say that Fortune 500 companies like General Electric, Chrysler, Wells Fargo, American Express, JPMorgan and Whole Foods are all switching the health plans they offer their employees to this model.

Historically, most people who got a high deductible health insurance were healthy.  They didn't think they'd need to use their health insurance, so they choose this option "just in case" something might happen.  Hence these plans were sometimes called catastrophic coverage plans.

Employers like these plans because it means they can contribute less to their employees' health care costs.  In the changing world of health plans, these kinds of plans are now being viewed as "consumer-driven" which adds to their appeal.  Here's how this thinking goes
If the employee has to pay with their money first to get medical care, then they will:
  1. take better care of themselves to avoid needing medical care 
  2. be more concerned about medical costs and 
  3. opt out of unnecessary tests and procedures when they do go to the doctor

O.K., so I have some questions and concerns.

How is the average patient supposed to "shop" for low-cost, quality medical care when this kind of information is currently not available?  And how are patients supposed to know what medical tests and procedures are needed and which ones aren't?

What will we have to do?  Take our laptops with us to medical appointments and use Dr. Google to figure out if what we are being told is the standard of care?  Or worse, delay care so we can research the alternatives before making a decision?

I think this high deductible health care model is so unfriendly to those of us with chronic illness!  How we all *wish* it were as easy as just "taking better care of ourselves."  We need to see our medical providers just to maintain what reduced quality of life and level of function we do have.

Plus is lower cost medical care really the answer for people living with chronic illness?  Many of us started with general practitioners when we first became ill and quickly learned that we needed specialists in order to get accurate diagnoses and treatments.  Specialists will cost more to see, but in the long run, they are often the only ones who possess the knowledge, expertise and skills needed to keep us stable and functioning to the best of our abilities.

So we are all going to be mandated to pay for medical insurance.  Then we are going to have to pay high out-of-pocket costs to access the health care system before that medical insurance kicks in and starts actually paying the bills.  Which means some people will have a whole new problem--will they be able to afford to use their new health insurance?

I think offer health plans that erect financial obstacles to obtaining necessary medical care is ridiculous.  How does this make any sense?  I think these new guidelines and trends will mean that people will forgo medical appointments when they don't have the money to pay out-of-pocket expenses.  And when people put off seeing a doctor because they can't afford it, this increases the number of health complications, trips to the emergency room and hospitalizations.

So is health care reform really helping us or just making things more difficult and complicated?  I have serious doubts that this will make health care more accessible or affordable.  I'd love to hear what you think.

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