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Monday, December 19, 2016

Oregon Obamacare final rates and Republican's Health Savings Accounts proposal is not insurance

In my previous post Obamacare rates in Oregon hurt many voters just in time for the Presidential election (10/8/16), I quoted a good letter to the editor by Kim Wilson, "Letter: The root problem with insurance," Gazette-Times, Oct. 11, 2016, p. A7 posted Oct. 8, 2016, which mentioned the proposed Obamacare rates and made the case that the demand for healthcare is inelastic, because everyone wants to live at all costs, and the supply of healthcare is limited, therefore basic economic theories predict the cost should go towards infinity.

Although I am covered by Medicare health insurance, a person close to me is still having to buy private health insurance until they reach 65 in a couple of years, therefore I was interested to talk to Kim Wilson, whose grandfathered health plan was cancelled when the health insurance company decided to leave the Oregon marketplace, and hear about her actual experience trying to buy Obamacare.

To make a long story short, Kim Wilson told me the final approved rates in Oregon for an Obamacare exchange plan is between $517 to $829 per month for a person who is the age of 60, lives in Benton County, Oregon, is not qualified for the charitable subsidy from taxpayers due to her income level, and who picks the cheapest Obamacare Bronze plans with the largest deductible and co-payments.

The original letter writer Kim Wilson sent me her follow-up letter about her decision of choosing to be uninsured next year based on the very high final approved $617 to $829 Obamacare premiums in Oregon and with an understanding of the law that a maximum penalty for not having insurance is much as 8 percent of a married couple's combined retirement income, even if only one of them is uninsured.

"Some readers didn't believe the proposed Obamacare health insurance premiums for 2017 mentioned in my Oct. 11 letter, "The root problem with insurance," until after I showed them my lowest approved rates of $517 to 829 per month that can be found on the official Oregon Division of Financial Regulation website using the Oregon Division of Financial Regulation "2017 Individual Health Plan Comparison Tool" accessed Dec. 19, 2017 that generates an Excel Spreadsheet listing all of the rates. (Tom's Note the old website went dead after the deadline passed for Obamacare registration in December. The Excel spreadsheet 2017-Oregon-Health-Pricing-Tool-v13.xlsm table generated by her with the tool is specific to to individual and small group Obamacare "Bronze" plans for persons who are age 60, live in Benton County, do not use Tobacco products, and do not yet qualify for Medicare, Medicaid, or a charitable low-income subsidy program.)

The Oct. 25 Gazette-Times' front page story, "'Obamacare' premiums to jump in 2017," reported "an estimated 5 million to 7 million people" share health insurance problems similar to mine, including those with annual incomes little as $30,000.

Until I qualify for Medicare in four years, the total sum of my health insurance premiums, co-pays, and annual deductible payments of $7500 could cost me more than $60,000 before insurance would pay for anything significant.

Even though my spouse is covered by Medicare, and if only I lacked health insurance, my Obamacare penalty could be great as 8 percent of both our retirement incomes, according to the complex IRS tax forms due next year.

Consequently, during the November open enrollment period I'm seriously considering choosing to be uninsured, despite the risk of bankruptcy due to unexpected medical bills, because even after paying the Obamacare penalty I could save an estimated $310 per month to pay for my actual medical care. "

(Quoted from Kim Wilson, "INSERT HEADLINE," Gazette-Times, INSERT DATE, PAGE)

NOTE: The above letter originally mentioned the official State of Oregon Division of Financial Regulation site that provided information on health insurance rates for individual and small group plans under Obamacare, but it now appears to be dead after the deadline passed for Obamacare registration. I was recently able to access on December. Dec, 19, 2016 the official Oregon Division of Financial Regulation website and I linked to the Oregon Division of Financial Regulation "2017 Individual Health Plan Comparison Tool" accessed Dec. 19, 2017 that generated for me an Excel Spreadsheet 2017-Oregon-Health-Pricing-Tool-v13.xlsm table listing all of the rates specific to individual and small group Obamacare "Bronze" plans for persons who are age 60, live in Benton County, do not use Tobacco products, and do not yet qualify for Medicare, Medicaid, or a charitable low-income subsidy program.

I am sure the letter writer Im Wilson has heard how the new President-elect Donald Trump promised during his campaign that he would "repeal and replace" Obamacare, but then Trump right after being elected and during Trump's "60 Minutes" TV interview reversed himself and said he would be keeping the ability to leave your older children on it and keep the feature of being able to sign up for it even if you have a pre-existing condition. I have no idea if Sen. Paul Ryan will still be creating a bill as he promised to repeal and replace Obamacare, or Republicans will at least eliminate the penalty for not having insurance.

As usual for Donald Trump, this flip-flop sounded insane because why would you buy health insurance if you could wait until you got sick? Likewise, on the surface, allowing pre-existing conditions would make it more expensive for health insurance and Trump still did not give any reasons why his plan could be done cheaper, other than he muttered the usual let the marketplace work mantra of Republicans.

The only solution proposed by Trump's Republican sycophants has been to propose using Health Savings Accounts, which are already part of Obamacare and are commonly used by many employers. I don't see how this would be used by people who are in the individual market to save because it is not insurance to prevent being wiped out by an unexpected illness or injury.

For example, I struggle to understand what HSA's would do and why Republicans like them, until I listened to former U.S. Senator Tom Coburn talk about how he and Sen. Orin Hatch had written legislation to control costs. Of course, his political spin on it was that it would be better to give people on Medicaid (the charity-based Government health coverage) a fixed sum of money in a Health Savings Account where they could choose how to spend for their own healthcare, instead of having the government pay for it and decide what should be paid. On the surface, he made this sound noble, but listening to him carefully it became clear to me that it was a polite way to ration healthcare without really providing any insurance that would protect an employee from going broke in the event of an unexpected injury or illness.

When Sen. Coburn was asked how you avoided people signing up when they get sick, he replied that the Trump plans would require you to sign up and stay covered, or else be barred for life from signing up for it. Essentially, it is the Obamacare penalty on steroids. Yes, he is right that this is common in many insurance plans, but it would work only if the costs are truly reasonable and affordable. However, I still do not see how this can be achieved with HSA accounts unless they ration healthcare.

Similarly, it is clear to me that Republicans also want to eliminate the Original Medicare, the standard medical coverage for the old and disabled Americans, by forcing everyone into the existing privatized Medicare plans called "Medicare Advantage" plans that are being heavily advertised during the open enrollment period this fall. The idea that the "marketplace" will drive costs down just has not been proven true by these plans.

So, enough ranting for now until the other shoe has dropped and healthcare in America is destroyed by both Democrats and Republicans.

Some links of interest and other letters to the editor of interest: