President Obama made it official during last year’s election campaign when he endorsed the use of the words “Obamacare” to label the largest overhaul to the health insurance industry since medical and hospital expense policies began to be offered in the early 20th century. Whether you prefer to call it health care reform, the Affordable Care Act, ACA, Patient Protection and Affordable Care Act, PPACA or Obamacare, one thing I know for sure is that individuals and employers are confused about what it means to them. And who wouldn’t be confused? There are six different names for the same piece of legislation!
So, I have decided to write a series of blogs to “hopefully” untangle the mystery and the confusion about the coming changes and how those changes affect employers and individuals.
Where to start?
First off, a couple of disclaimers:
First of all, I work in the health insurance industry; that may mean I am biased. More than likely you already have an opinion about health insurance in general. Whether you are an employer or an individual, health care is expensive. A national firm, Milliman Inc., produces an annual study on health care costs in the United States. It has a fancy name, the “Milliman Medical Index.” The 2013 report was recently released. There were a couple of statements within the report that grabbed my attention.
“Last year, when health care costs for the typical American family of four exceeded $20,000 for the first time, the Milliman Medical Index (MMI) compared the cost of a family’s health care to the cost of an average midsize sedan. This year, with costs exceeding $22,000 ($22,030), we note that other major purchases are also comparable to the annual cost of health care. For example, the cost of attending an in-state public college is $22,261 for the current academic year.
The total share of this cost borne directly by the family — $9,144 in payroll deductions and out-of-pocket costs — now exceeds the cost of groceries for the MMI’s typical family of four. The out-of-pocket cost alone — $3,600 for co-pays, coinsurance and other cost sharing — is more than the average U.S. household spends on gas in a year.”
Wow. I know of countless individuals and families whose health insurance policy has saved the family from dire financial crises by covering tens, if not hundreds, of thousands of dollars in health care expenses. While at the same time, this report points out that the average American family feels the pressure on their family budgets for typical care received during the course of a year. The cost of care and the need to deliver value to those paying the premiums and cost shares is ALWAYS on the top of my mind. It also means that I have had to spend a lot of time reading and digesting with my coworkers all the rules regarding this law and its implementation.
My second disclaimer is that I have a chronic health care condition that would render me virtually uninsurable in the private individual insurance market today. This too may mean I am biased. Without great employers to work for, I would have a difficult time getting health insurance today.
Everything related to the laws that go into effect on Jan. 1, 2014, are a “work in progress.” Have you ever taken a flight that has gotten canceled or rerouted once you hit O’Hare Airport in Chicago? You realize suddenly that you know you are going to get to your destination, but you are not quite sure how you are going to get there. That’s the best relatable analogy I can use to what it feels like in building a response to all the changes that are to go into effect on Jan. 1, 2014.
I am confident in all the work that has been done to date and the information I’ll be sharing with you along the way. It won’t be legal or financial advice. There are brokers, accountants and tax advisors who can assist you with those questions. This blog is to “keep it simple.” There are both public and private resources always available to you that will help you answer questions you might have. And along the way, you are welcome to ask your questions on this blog. I will do my best to answer them.