Chronically Ill Patients and Legislated Health Insurance Changes

Today I received a rather long email from the Director of my Human Resources department carefully outlining the options for health insurance for the new fiscal year that begins July 1^st. As with any previous year, a decision will need to be made by the end of May about which plan to choose. But the choices this year look dramatically different than in previous years. And because I am a high user of healthcare, the stakes are much higher.

Healthcare systems have been under scrutiny for years and costs are spiraling out of control. Because of this, major changes to health insurance in the United States are underway. Congress passed the Patient Protection and Affordable Care Act, or “Obamacare”, in 2010 and changes will be phased in over the next few years. The joke at the time was that the legislators had to pass the bill in order to read it because it was so long and complicated! There are numerous changes brought about by this bill but the primary changes enacted include free preventative care, end of lifetime limits, protecting the right to choose doctors, the end of arbitrary withdrawal of coverage, keeping young adults covered, and making healthcare more affordable (more about this later).¹

Because of an excise tax on employers if costs go over a certain amount per employee, costs to employers are going to be limited and will ultimately be shifted to employees.² It stands to reason that companies and organizations that employee workers will carefully maintain their profits and that includes raising the amount employees contribute to their healthcare costs. One study by business consultants Tower Watson documented that the majority of companies surveyed plan to shift healthcare costs to employees.³ Chances are good that everyone is starting to experience dramatic changes in premiums, deductibles, and other out of pocket expenses.

Many of the changes involve state level decisions and some states opted out of certain portions of the law.⁴ Depending on each state’s system, the federal law will increase health costs. In fact, a 2013 study by statisticians showed that claims would increase on average by 32% with Ohio predicted to increase by 80% and Florida by 20%.⁵ A more recent study documented that healthcare premiums are skyrocketing averaging around a 12% increase from the previous year for both small and large group markets. In healthcare plans sold directly to consumers (not through an employer), some states saw whopping double digit cost increases with Delaware at 100%, California 54%, and Florida 37%.⁶

At the time of passage, not much attention was paid to Obamacare. But now that it’s getting implemented, the changes are becoming a personal reality. My decision about insurance plans will need to be made fairly quickly as the open enrollment period will be over soon. My employer is continuing to offer a Preferred Provider Organization (PPO) plan that contracts with certain healthcare providers but the premiums will cost approximately 30% more than the past year. Or I can switch to a high deductible plan, like a $4,000 deductible for a family, and start a health savings account (HSA) that is tax-free. Fortunately, my employer decided to put some money into the HSA account to help alleviate the increased costs. These high deductible plans don’t include a pharmaceutical plan – they are included with all costs. My RA medicines retail approximately $40,000 a year. For the current year to date, I utilized almost $50,000 in healthcare costs. With an HSA, it would be eaten up in the first few months. The out of pocket maximum for the year is $8,000 and everything beyond that is covered 100%. For those employees who don’t use much healthcare, they can keep their HSAs and roll them over year to year and eventually use the funds even after they retire. No such luck for me. High deductible plans are rapidly becoming the norm and they clearly favor those who don’t need to access expensive healthcare or medicines.

The notion of increasing access to affordable healthcare for all people is a noble one and is common in most developed countries of the world. And Obamacare is supposed to help reach this goal. But the funding to achieve this goal has to come from some source and that seems to be based on shifting the increased costs to the working masses generally, and to those who use a lot of healthcare services specifically. Personally, the bottom line is that I’m going to pay more for health insurance costs under Obamacare. In fact, the raise that I will receive will be completely eaten up paying for increased premiums and out of pocket payouts. Patients with chronic diseases such as rheumatoid arthritis stand to take the brunt of the increased costs. These will be difficult waters to navigate over the next few years for those with expensive to manage health situations.