Just a month ago, John Peeler didn’t give much thought to the Affordable Care Act.
He had a good job as an IT manager. He had health insurance for himself and his family. He was making plans for his daughter to attend college.
Then on Sept. 9, his position was eliminated, leaving the family with just three weeks of insurance.
Now he’s wondering whether he’ll qualify for a tax credit to purchase a plan under the new law, whose goal is to ensure affordable coverage to millions of Americans who have none today.
“I’m a conservative-minded individual,” said the 44-year-old. “But if this is going to help, I’ll welcome it.”
Under the ACA, also known as Obamacare, most Americans must have insurance, which they can purchase from private carriers in an online marketplace often with the help of tax credits, or pay a penalty. About 41.3 million uninsured Americans will qualify for marketplace coverage and about 56 percent will be eligible for tax credits, according to the U.S. Department of Health and Human Services.
Under the new system, carriers will offer bronze, silver, gold and platinum plans that must offer at least 10 essential benefits, including hospitalization, outpatient care and prescription drugs. Pre-existing condition exclusions and lifetime caps are outlawed.
Just how much the coverage will cost is the top question for one in five people, like Peeler, according to the latest tracking poll from the Kaiser Family Foundation.
The independent RAND Corp. generated a cost model looking at 10 states, including South Carolina, and concluded there would be no widespread premium increases in the individual market and that out-of-pocket expenses will decline for most consumers as well. A Kaiser study also showed premiums will be lower than expected in general.
But what do consumers really think about the plans and prices on the marketplace? Few have had a chance to find out.
Since it opened Tuesday, the online marketplace where consumers can compare plans and purchase coverage has been riddled with access problems. The federal government is operating the marketplace for 34 states, including South Carolina, and along with consumers, insurance brokers and navigators who’ve been trained to help consumers enroll have had trouble getting onto the site, often going to paper applications instead.
HHS attributes the problems to heavy user volumes.
“In the first two days, we had 7 million unique visitors to the site, which surpasses any expectation,” said Jason Young, deputy assistant secretary for public affairs at HHS, adding it’s unknown how many have been able to enroll.
So HHS technicians have been working around the clock to add capacity, fine tune database interfaces, and change the application work flow in hopes that access will improve daily, he said.
“They are small things, but in the aggregate for a brand new site have impact on performance,” he said. “We are working aggressively to improve that performance.”
So since Peeler was unable to get onto www.healthcare.gov, he checked the Kaiser subsidy calculator, which gives users an estimate of what they would pay for a mid-range silver plan, where the insurer/consumer split is 70/30.
And he was surprised by what he found.
Since losing his job, the Moore man had the option of getting insurance through COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985 that allows people to keep their employer coverage for up to 18 months, so long as they pay the full premium.
But it’s too costly, he said. Especially on unemployment benefits.
“Between putting groceries on the table, power and keeping a roof over our heads, there’s no more left for COBRA,” he said. “We just have to make due and hope nobody gets seriously hurt.”
What’s worse, this is the third time in the past 15 years that Peeler’s position, and insurance, was eliminated.
The last time was in November 2008, when he and many other Americans found themselves unemployed because of the Great Recession.
It took him almost a year to find another job, so taking care of the family wiped out his savings. And he still hasn’t fully recovered financially from that.
COBRA was unaffordable then, too, Peeler said. And while he tried to buy insurance on the individual market, the coverage was extremely limited for the amount he had to pay. So the family found doctors in Spartanburg who were willing to take cash when they needed medical care and they held their collective breath.
“We were lucky that no one had a major illness. But we were gambling,” he said. “My job as a father and a husband is to have a job. And part of that job is to provide benefits and insurance and health care for my family.
“But what’s good health insurance if you’ve got nowhere to live?”
Since finding another job in October 2009, his family coverage has cost about $450 a month — an amount he considers reasonable.
Now he’s hoping that he can afford a plan under Obamacare until he finds another job.
Frustrated by not being able to get on the federal website, Peeler found a silver plan on the Kaiser calculator that would cost him about $450 a month for his family of four. That, he said, was a surprise, but is something he can manage.
“The premium amount is OK,” he said. “It’s roughly in line with what I was paying as an employee. Without knowing the exact out-of-pocket costs though, it could be significantly higher.”
So Peeler said it’s hard to say whether he’d go for it. Still, he’s anxious to see what his other options are on the marketplace.
Rolling the dice
Daniel Kilpatrick, a married father of one from Greenville who works three jobs with no coverage, said he hasn’t had health insurance in a decade.
“I’ve been rolling the dice,” he said. “I had to go to the ER once, and that was something simple. I was seen by a doctor and had some tests and the bill was around $8,000 or $9,000. I still haven’t paid it off.”
But as a self-employed home theater and security system installer, who also holds two part-time jobs, his earnings vary widely. So going on his wife’s insurance at an additional premium of $350 a month was too costly, he said.
And, Kilpatrick said, he’s not alone because of the economy today — fewer jobs and falling middle-class incomes.
“Tons of people I know have college degrees, they’re intelligent people,” he said, “and they’re serving food and working as bartenders.”
With his 10-year-old daughter on his wife’s plan, Kilpatrick, 33, said that since he has no ongoing health issues, a high-deductible plan would be adequate for him. But he doesn’t want to pay more than $150 a month. So he’s just been planning on not getting sick.
“Higher than that, to me it becomes unreasonable,” he said. “My income is not particularly high. Neither is my wife’s. The costs are outrageous and insurers need to become more competitive.”
So what did he find on the Kaiser subsidy calculator?
“It tells me I’m eligible to purchase a silver plan at $500 a year. Just for me. That’s a heck of a deal, even at double that price,” he said, adding that he calculated it twice to make sure the numbers were right.
“If that is true, and I’m eligible to purchase silver coverage at that rate, I will do so immediately,” he said. “If it goes well and the coverage is good, I will also include my daughter on it. But I won’t switch her until I’m confident the system is running the way it’s supposed to.”
A calculated risk
One of the criticisms of the current insurance system in this country is that people are often afraid to leave their jobs for new ones, or start up their own businesses, for fear of losing their coverage.
But betting on an improving economy — and Obamacare starting Jan. 1 — Cliff Arnold decided to take a chance.
The 49-year-old left his job of 13 years — and the insurance it provided — almost five months ago to start his own home inspection business.
“The economy was looking good enough and I was thinking I’d give it a try,” he said. “Being a home inspector as I am now, I have the potential for greater earnings. I knew this would be an issue. But I had to make a decision to do this or not. It was a calculated risk.”
After checking out the possible insurance options available to him, his wife and their 22-year-old son, who also work but have no coverage, they decided that Arnold, who’s had a kidney and pancreas transplant, would go on COBRA. It costs $360 a month just for him, but would be well over $1,100 for the whole family, he said.
Using the Kaiser calculator, the Bradley man found that a silver plan for himself and his wife would cost $4,100 a year, or $375 a month.
“That’s a good price,” he said. “I think I’m probably going to do it. I don’t have a whole lot of choice. My wife has got nothing now. And this way, I’ll be able to insure me and my wife for just a little more than I’m paying now just for myself.”
Like Peeler and Kilpatrick, though, he wants to know about the out-of-pocket costs.
Meanwhile, those who fail to get insurance next year will be assessed a penalty — which is $95 or 1 percent of income the first year, increasing to $325 or 2 percent the second year, and $695 per person or 2.5 percent in 2016.
And while some expect that many healthy young people will pay the penalty instead of the more costly monthly premiums, a survey by the Commonwealth Fund shows that just 5 percent of adults between 19 and 29 say they don’t need insurance.
Two-thirds of them take health insurance when offered by their employer, according to the nonpartisan health policy think tank in Washington. Of those who didn’t, 54 percent said they were covered by a parent, spouse or partner, while 22 percent said they couldn’t afford it, the group reported.
“There is a stereotype that young adults believe they are ‘invincible’ and don’t want or need health insurance,” said Commonwealth Fund vice president Sara Collins. “In general, young adults value health insurance but cannot afford it.”
The Commonwealth Fund survey also showed that just two of five adults know about the new marketplaces and the tax credits that can help them afford coverage, and that young adults who would benefit most from coverage — the uninsured and those from low- to middle-income households — are the least likely to be aware of the new marketplace.
“Some talk about people who might be strapped for cash deciding to take the penalty instead of getting coverage. But we found that young adults do want coverage,” said Christina Postolowski, a senior policy analyst with the Young Invincibles, a national group devoted to making the voices of young adults heard.
Around the country, about 27 percent of those between 18 and 34 are uninsured, and about one in six has a pre-existing condition that may have left them uninsurable or with excessive premiums up to now, according to the group.
Under the ACA, Postolowski said, up to 17 million of the 19 million currently uninsured in that age group could be eligible for coverage in the marketplace or by Medicaid. Those who think they’re saving money by paying the penalty leave themselves open to financial hardship if they do get sick or injured, she said.
Over the coming weeks, The Greenville News will examine various aspects of the law and how it impacts consumers.