(First written on the announcement of the passing of the ACA)

RE: HEALTHCARE BILL / My own Romneycare experience

Congratulations to the uncovered 15 MM people, the donut-holers, the pre-existers, et al.  You will get something very valuable at an incredible price point.

Congratulations to those who have the worldview that we should have a zero failure rate in healthcare, that the poor should get quality healthcare with dignity, and that nobody should fall through the cracks regardless of their financial condition.  This goal will have been achieved.

Congrats to the healthcare corporations too; you just got 15 MM new premiums.  Put that on top of the rest of us and the Medicare/Medicaid people (who also go through the corporate HMOs, look in your grandma’s wallet for her Blue Cross Medicare card), you have a near categorical monopoly/cartel in this space.  Only vets and the very wealthy will use non-corporate healthcare.

I have family, clients, and friends who work in this industry.

I make some of my income from HMOs, so I’m a winner too.

________

MY STORY WITH ROMNEY/OBAMA CARE (surely a re-post)

As politically neutral as I can be, I’ll describe my experience under the past seven years of Romneycare (the model for this bill) in Massachusetts where I was just an ordinary guy who bought health insurance for the sole and boring purpose of taking my family to the doctor and hedging against catastrophic acute interventions.

My first plan I bought on my own around 2004-2005 was about $350/month for husband/wife.  I didn’t replicate my previous employer plan, as it was too expensive.

By around 2006, I had a baby and had to upgrade to a family plan, the premium was about $1,100 per month. Or about $13,000 per year. No deductible, minimal co-pays.  No co-insurance.

THE MECHANICS OF THE SYSTEM

How it works is you go to a website (the connector) and shop for different plans from different HMOs.  They are rated Gold, Silver, and Bronze for quality and have different sub-levels based on coverage and premiums.

You are only allowed to switch plan for two months out of the year and then are locked in.  These two months are the ‘enrollment period’.

If you are low income, the government will subsidize your payment i.e., they will send a check to the corporate HMO on your behalf.  The qualifications are generous.  If you have a big family for example, you can earn $108,000/year and still be considered low-income.

The HMO, like an employer, sends everybody a special 1099 type document that you file with your taxes.  If you don’t have one, you get a fine.  This is the ‘mandate’. The penalty is 50% of the lowest premium.  Currently that would be about $6,000 and you still would not have insurance, just the regular bad-debt ER room crap that many endure now.

The mandate is the counterweight to the “no pre-existing conditions” aspect.  Neither can function without the other. Without the mandate, you wouldn’t bother to pay premiums until you needed care.  Even that first night in the hospital after the heart attack would be less expensive without insurance than paying the premium month after month.

Just to keep this straight

– Penalties are paid to the government

– Premiums are paid to the HMO corporations

– Subsidies ultimately get paid to the HMO corporations

– HMOs pay doctors and hospital systems

– Medicare payments are from government to HMO corporations

MORE ABOUT ME

So by around 2009 or so my premiums had grown to $1,550 per month or about $19,000 per year. No deductible, reasonable co-pays.

Had I stuck with my employer’s plan it would’ve been around $26,000 per year.

Finding this rate unattractive, I downgraded to a plan that was only $700/month but had a $10,000 deductible and more meaty co-pays and fewer things covered.  For example, ER visits would be $500 co-pay.

THE STATE PROTECTS THE CONSUMER AGAINST PRICE GOUGING

Premiums are actually negotiated by the state government on the public’s behalf by our democratically elected representatives.  This is the public’s safeguard that the companies won’t gouge us.  I’ve gotten several letters in the mail from the state explaining how they have frozen and reversed previous decisions.

Rates rise about 15-17% annually.

This is a great case study for monopoly buyer vs. monopoly seller, but we can do economics lessons some other time.

By 2012 this exact same plan had rose from $700 to $1,200 per month, or around $14,000/year.  $10,000 deductible, same coverage.

This year I’ve now switched to the lowest tier of the Bronze i.e., the very lowest payment to be compliant with the law.  $970/month or about $12,000 per year.  This is the absolutely lowest level of coverage available with the most out-of-pocket cost and the narrowest of provider networks.

GREAT CARE

The care we receive is generally superb.  We go to the doctor frequently.  We pursue anything and everything medically.  I even got an MRI once because my golf swing was causing me pain in my shoulder.

So, congrats everybody.  I personally wish it was done differently.