The Affordable Health Care Act

I have tried to avoid this one as I strive to stay out of the emotion filled political issues and instead look at other issues like my last post on Medicare but as I finished writing that one, I received some information in the mail from Blue Cross that I felt had to be commented upon.

I received a package entitled “Health Care Reform is Coming”. It does on to state - Health care Reform will be different for everybody. (I thought it was going to equalize everybody.) So here it is. (I am adding my comments in a different color so you can tell the difference between what they said and what I say)”

Some of the benefits already existed, so new or expanded benefits are listed in bold:

• Ambulatory Patient Services
• Emergency Services
• Hospitalization
• Maternity and newborn care not automatically covered.
• Increased benefits for mental health and substance use disorder services including behavioral health treatment.
• Prescription drugs.
• Rehabilitative and habilitative services and devices.
• Laboratory services.
• Preventive and wellness services and chronic disease management.
• Pediatric services including oral and vision care.

< So if I am not insane (hope not), just born or a child (hah), or expecting a child (blow my brains out at this point in life), then I really don't get anything. >

Additionally, all new health care compliant plans now have an annual cap on out of pocket expenses (estimated $6350 for single and $12,700 for family).

< Oh joy! $12,700 is all I will have to spend out of pocket AFTER I pay for the premiums! With premiums close to $1000 a month now and $12,700 out of pocket I won't have to worry about house payments or groceries anymore! Get real who can afford $24,00 a year in insurance premiums AND out of pocket expenses? I thought this was the Affordable Heath care Act, not the Run Them into Bankruptcy Act. More on money and premiums and money in a moment. >

Terms defined:

Federal Poverty Level (FPL) – A measure of income level (by family size) that determines eligibility for premium tax credits. For example, a family of four that makes less than $94,200 a year may be eligible for help.

< Moment is here. $94,200 is poverty level for a family for four!!??? It that is poverty I am buried in poverty. The news reported the other day that the average (not median) income in this country is approximately $55,000 a year. That means before taxes half the people in this country earn less than $55,000. After taxes that means half this country has a take home of about $38,500. now subtract the $12,000 on insurance premiums and the $12,700 in out of pocket expenses and you have about $13,800 to live on (food, gas at $4/gal, house note or rent, etc.). If you make less than the average income as half the country does, then you have serious problems. >

Premium Tax Credits – These will be made available to low and middle-income Americans and applied to health insurance premiums. Cost Sharing Reductions will limit a plan's maximum out-of-pocket costs.

< If poverty for a family of four is $94,200 a year, then what on earth is low to middle income? Low must be $100,000 - $150,000 and middle income must be $150,000 - $250,000 a year. Nice to know they will be helped also. Does anybody know the Great Recession is still impacting so many Americans? We cannot afford this! >

What Are My Options?

One of the things you will need to do is determine if you have a grandfathered plan (which refers to health insurance plans that were in effect prior to March 23, 2010).

< So if you changed jobs or got a new plan after that date, you will be forced to change with no options! >

If you have a grandfathered plan:

You have flexibility. If you like your current plan you can stay with it. For many people, this will be the best course of action because it may be the least expensive option.

< Key words here: Least expensive option. Meaning the new Affordable Health Care Act will cost more than anything we have now. I thought this initiative was to help people have insurance that could not afford it. This sounds like if you can't afford it now, you really won't be able to afford it later!! >

You may still qualify for a premium tax credit that can be applied to health insurance premiums; however, premium tax credits cannot be applied to your current grandfathered plan. It may be in your best interest financially to stay with your grandfathered plan.

< In other words, it is going to be really expensive. The tax credits will NOT begin to cover the additional cost and you better stay with the grandfathered plan. BUT WAIT, what about those that did not have their existing plan on March 23, 2010? What if you moved or got a new job or some other way had a life change that moved you to a new plan? Buckle up, here it comes! >

Once you leave a grandfathered plan, you cannot go back to it!

< Oh, so if your children grow up and move out or you get a new job, you have no choice, you will be forced to move to this new insurance coverage!! >

If you do not have a grandfathered plan:

We will automatically move you to a 2014 BCBS health care reform compliant plan that most closely matches your current plan. Your new plan will look a lot like what you have today. You always have the option to change this plan during the annual open enrollment period.

< Really? Really? When is the last time your insurance plan or anybody else changed you to a new plan or anything that was better for you? I had a friend that had a computer replaced under warranty with the assurance that it would be as good as or better than the one it replaced but they got no say so in what it would be like. Well, let's just say they would up buying a new computer as it was so unusable. Among other things it was supposed to be for a female to carry to class. They had a 15 inch laptop and got a 17 inch thing that weighed 10 pounds (literally 9.6). The point is if you believe you insurance company is going to move you to a plan that will cost about the same and have the same basic coverage, I have property in the Florida swamps to sell you and a bridge in Brooklyn also. >

< My Bottom Line: It appears one of the largest financial disasters this country has ever experienced is about to happen. This will be so much more than the dot com bust in 2000 or the housing bust, or the Great Recession. I don't want to sound like a fear monger as I typically heat that but when I look at the numbers ($94,200 poverty line, $12,000 for health care premiums currently with significant increase to happen according to the insurance companies, and $12,700 out of pocket expenses, I don't see how the working class will survive. I suggest you get you application in now for government housing, food stamps, and welfare. The line forms to the rear, don't get caught short. >  

** Update: The news reports that the government has allowed business a one year exemption to the Affordable Health Care Act. If business have a one year exemption, why can't individuals get a one year exemption? (or more). If businesses don't have to provide the coverage the plan requires, does that mean that the employees will now have to buy it out of pocket like so many others? This doesn’t help matters, it only puts more of a burden on the people.

The Act has already hurt so many people by encouraging companies to limit their workers to 30 hours a week or less. If you don't believe this, go talk to anybody that has tried to get a job or has gotten one in the last few years. Odds are they are at 30 hours a week or less. 

Medicare and the Donut Hole

And Now a Word about Medicare and the Donut Hole 

For those of you approaching 60 +, here is something you need to know about. This comes from one of my readers down south in North Carolina (how do you people stand it down there with all that humidity?) They work at firm in conjunction with a pharmaceutical firm and they submitted this for my consideration and it is something we all should now about in life (what this blog is about - Thoughts on life of whatever nature)

For those of you approaching that age where Medicare may become part of your life, you need to know about the Donut Hole. Insurance for Medicare (Like AARP) Part D has four levels. Deductible, Initial, Coverage Gap (the Donut Hole), and Catastrophic. (I am not going into Part B etc as that is not the focus today). This discussion ONLY covers Prescription Drugs, not any other medical coverage.

Phase 1 Deductible - When you start using Medicare Part D , the Deductible Phase is exactly what it sounds like, you have a deductible to meet. Some plans do not charge a deductible. Easy enough.

Phase 2 Initial - When you meet your deductible (assuming you had one) you enter the Initial Phase. At that point you simply pay the copay. The copay depends upon whether the prescription is Brand or Generic and its Tier. No need to explain Brand vs. Generic but a word about Tiers. Tiers are levels that the insurance company sets. Simple relatively inexpensive drugs are Tier 1. Higher tier drugs such as 2, 3, and 4 are more expensive. You don't want to know about Tier 5 and 6, really, some plans don't even cover them.

Phase 3 The Coverage Gap ( aka The Donut Hole) - BUT as you go along, at some point you will look down and notice that the copay for that prescription suddenly jumped anticlimactically – as in doubled!! You walk up to the pharmacist and want to know WHAT HAPPENED? Why is my copay doubled? (My source deals with these calls all the time from insurance members and pharmacists trying to confirm the Donut Hole) . The Pharmacist makes a call (to somebody like my reader) and they look up your information and confirm it to the Pharmacist and they tell you you are in the Coverage Gap or Donut hole. WHAT THE #%^ is that??

The Coverage Gap (Don't ask why it is called the Donut Hole as nobody seems to know but the terms is widely know throughout the industry.) is when the amount of money spent by you AND the insurance plan reaches $2970.00 for 2013) The amount of money BOTH of you have spent is called your TDE or Total Drug Expenditure. It is IMPORTANT to note, it is the Total of what you AND the insurance company have spent for your prescriptions for the year to date.

When you reach that point, you pay approximately half the cost of the drug. That is how my reader and Pharmacists have a hint you are in the Donut Hole, the copay doubled from what it was.

4. Catastrophic Phase - The next and last Phase is the Catastrophic Phase. This means you finances are a catastrophe and you are just about broke from prescription bills. When you get into the Catastrophic Phase you pay 5% of the Cost of Approved cost of the medicine with a minimum usually of $2.65 for generic and $6.65 for Brand name medicine. Sound good right? Well, some medicines cost $6500 for a three month supply so your copay is still $325 or more. He tells me one drug not covered yet by insurance costs $1500 for a three month supply!!

IMPORTANT (as in the point of all this) So how do you get from the Coverage Gap (Donut Hole) to Catastrophic with the lower copays? (You aren't going to like this.) You get out of the Donut Hole when your TROOP (Total Out OF Pocket) expenses reach $4970 (for 2013). Sounds Ok, $4970 - $2950 = HOLD ON!!! BAD MATH!!. You go into the Donut Hole based upon your TDE which is BOTH your money and the Insurance Plan's money. BUT getting OUT is based SOLEY upon YOUR Money! So when your TDE reaches say $3000, you are in the Donut Hole but your Troop at that moment may only be $450.00 WAIT you mean all that TDE doesn’t count?? That's right. Only YOUR money spent counts. This means you have a long way to go until YOU SPEND $4970 OUT OF YOUR POCKET!! (You may now put the nitro pill under your tongue).

The reader reports people reaching the Donut Hole will start ordering their medicine based not upon what they do but upon cost. I.E. they buy several inexpensive ones but don't buy the expensive ones like heart medicine until next month or later. (Dumb but sometimes all one can do). They report one lady told them that a customer said that when they reach the Donut Hole, it is like playing Russian Roulette ordering which prescription to get each month.

So what can you do about all this? First, simply knowing what will happen helps. Second when you go to get a Medicare Supplement, ask about coverage in the Donut Hole (You may want to say Coverage Gap as Insurance agents are not as familiar with the term. They just sell it).

One tip my reader gives us. Your Medicare resets every year on January first. This means that toward the end of the year, like in November through December, you want don't want to order refills that extend over into January other than a few days IF you are in the Coverage Gap. Coverage Gap people can order a 60 day supply on November 1 or a 30 day supply on December 1. This minimizes the impact of the Coverage Gap on you pocket. In January you will have to meet your deducible if you have one but almost anything beats the Coverage Gap.

At that point, Good Luck.