Know the Facts about Obamacare

It’s interesting to me when someone says that they hate “Obamacare” (the popular name for the Affordable Care Act-ACA). This law is complex and far reaching. Most people simply don’t understand how many areas are affected by the law.

Most recently, it was a client lamenting that they had to have insurance or they would have to pay a penalty. This idea that someone tells them they must do something is the most prevalent objection I hear. I explained that without the mandate, insurers would be unable to provide “guaranteed issue” to people in the individual market. “Why not?”, he inquired.

I explained that if there was no mandate requiring you to participate, and the insurer was required to accept you, most people would wait until they got really sick to buy insurance coverage. He looked at me rather surprised and said that thought never occurred to him! After all, if you are not using your insurance very often, the insurance premiums are much higher than what you are spending on care.

On the other hand, if you are someone with a lot of medical care, you are well aware of the costs that are incurred every time you need a prescription or medical test.

The intent of the law was to provide universal coverage, meaning that everyone would be covered. According to the Kaiser Family Foundation, “as of the end of 2015, the number of uninsured nonelderly Americans stood at 28.5 million, a decrease of nearly 13 million since 2013”. An improvement, yes, but still not universal coverage.

This conversation caused me to reflect on how the individual health insurance market world has changed. Prior to the ACA, the process was something like this:

You call to say you need individual insurance. I ask if you have prior coverage and might have an opportunity to continue that coverage. Typically, if you had prior employer sponsored coverage you tell me that the premiums under COBRA (continuation rights) are too high.

I ask about your health history previewing about 50 questions designed to uncover prior conditions. If it looks like you could be accepted, we take 45-60 minutes to complete the application. The application includes permission for the insurer to access all of your medical records.

The insurer will run an MIB (Medical information Bureau) report and write to your doctors for medical records. This process may take 30-90 days.

You might be shocked to learn that the medication you are taking disqualified you. Or maybe your doctor was trying to “help you” by putting a diagnosis on a claim so it would be covered. But you didn’t really have that disease or disorder. That diagnosis is now branding you as uninsurable or causing a rated policy. By the way, this could also affect insurability if applying for life or disability insurance.

If you are declined, we apply to MRMIP, the CA Major Risk Medical Insurance Pool. The plan premiums are much higher and benefits are limited to $75,000 annually with a $750,000 lifetime cap. There is a waiting list because the plan has limited funding and can only handle a limited number of individuals.

Under the ACA, if you need insurance it’s a whole new set of rules. They are equally complex, but in many ways feel less punitive. The issues are not related to your health history. Instead they are related continuity of coverage and “qualifying events”. We research whether your providers and Rx are covered by the plan since networks are smaller.

The complexity comes if you are trying to qualify for a subsidy or APTC (Advance Premium Tax Credit). I have to know your income information and I must be a knowledgeable about taxes to be able to assist you to obtain maximum subsidy. To earn my professional designations I had to take tax law classes. My experience includes estate tax and retirement planning for individuals and businesses, so these tax issues were not new to me.

Now rather than detailed medical underwriting, I am involved in financial underwriting. I deal not only with your insurer, but also Covered California (our state insurance Exchange) and your tax professional, if you are self-employed. The process still takes at least an hour for the initial transaction. Follow-up with all the parties involved can take many more hours since we must deal with more entities: insurer, exchange, tax professionals

I have continued to work in this market because I believe in the goal of universal coverage. Our commissions have been cut by about 75%, so it is not a profit center. As we approach 2018, I can only hope that the California market can survive the instability that has been intentionally thrust upon it by unscrupulous legislators.

Margaret R. Beck
Margaret Beck  CLU, ChFC, CEBS started her insurance practice in Redding in 1978. As an insurance broker/consultant,  she represents businesses and individuals as their advocate.  She assists in choosing proper products, compliance with complex benefit laws and claims issues once coverage is placed. All information in her column is provided to the best of her knowledge, subject to final regulation by the respective agencies. Questions to be answered in this column can be submitted to info@insuranceredding.com. Beck's column is also published in the Redding Record Searchlight.
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4 Responses

  1. Richard Christoph says:

    Thank you for another illuminating and informative article about this extraordinarily complex subject. Few would  work for so many hours sharing decades of knowledge and experience for such paltry financial remuneration.

  2. cheyenne says:

    I do not have ACA insurance.  I have Medicare and Anthem Blue Cross, which was a continuation of the policy I had at the school district I worked in California and I pay for it 100% with no subsidies.  I have been told by insurers and providers that because of the added factors, such as maternal leave and childbirth coverage(I am 74), that is the reason my premiums have risen an average of 10% or more since the ACA was implemented.  Before that my premiums stayed basically the same, raise one year and go down the next.  When I state this I can not get an answer as I am condemned for being on Medicare or I am told I am lying.  With the shortage of healthcare workers, I am told due to more patients or low reimbursement, I am lucky I live where UC Health is expanding into rural areas and I can see specialists without having to leave Cheyenne.  I understand this is not true in all rural areas.

    The only result I can determine, whether it is Obamacare or Trumpcare or what we had before, I am screwed the older I get and instead of answers I get links leading to a multitude of opinions, not facts, where it is always suspect.

  3. Hollyn Chase says:

    Thank you for your educated, clear, and honest response. I wish more people would read this–especially our representatives in congress. What a shame our leader in the executive branch does not have the vocabulary or attention span to get through the whole article.

  4. Frank Treadway says:

    In addition to Ms Beck working in the field of insurance underwriting, our local HICAP office on Hartnell Ave can give clear and important information for those with questions who are on Medicare and MediCal.

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