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I just spent the afternoon conducting a personal case study on the benefits of the Affordable Care Act. Being 63 years old, I need coverage to bridge the twenty months from now until I qualify for Medicare in March of 2015. This what I was able to find out.
A major medical policy covering physician, medication and facility charges attendant to hospitalizations and including some outpatient procedures would cost $290 a month or $3480 a year. The deductible is $5000 and I would be responsible for 20 percent of the next $15,000 of covered services. After that, the policy covers 100 percent of all hospital services and subsequent rehabilitation therapy. On the first $100,000 of covered services, my obligation would total $11,480 (the premium plus the deductible plus the co-payment). On a second $100,000, my obligation would be zero.
I also solicited a quote for a comprehensive care policy (widower, single coverage) that would comply with the ACA mandate. This policy is not yet available, in part, due to the regulations that are not yet finalized. The agent was able to quote coverage comparable to gold or platinum coverage as currently defined. It would cost between $1190 and $1313 a month or $14,280 to 15,756 annually. If this policy provides the equivalent of platinum level coverage, I would be responsible for 10 percent of the next $100,000 or $10,000. So, were I to incur $100,000 of hospital expenses, my total obligation would be $24,280 to $25,756 (insurance premium plus co-pay). If the covered services exceeded $100,000, I would continue to be responsible for 10 percent of any remainder.
What are the benefits and drawbacks of each policy? The major medical policy is roughly one quarter the cost of the comprehensive policy. It is subject to a health exam and it does not cover office visits and some outpatient diagnostics. The co-payment obligation sunsets at $20,000. (It should be noted that catastrophic care policies can be grandfathered into Obamacare and are considered compliant with the individual mandate. However, that assumes that the insurer will continue to make the product available. And once the individual mandate is enforced, it’s hard to see why they would.)
The comprehensive policy does cover office visits, has no deductibles and requires certain diagnostic procedures to be offered free of charges. The co-payment obligation applies to outpatient and office services. and does not sunset at any predetermined amount. It is guaranteed issue, so pre-existing conditions don’t disqualify an applicant. The annual premium is about $11,000 more expensive each and every year.
Comprehensive care is a hard sell, even to people my age, who are far more likely to need it. Good luck selling it to people 30 or 40 years younger. The good news? Come 2016, the federal government will allow you to remain uninsured for an annual fee of only $695.
These quotes were obtained in Wisconsin from a top four, market-share insurance provider.