These stories are now becoming so common as to be the norm, but there’s yet another tale of the Obamacare exchanges essentially collapsing in North Carolina as we approach the next open enrollment period. Keep in mind that health insurance is still mandatory under law and the grace period for not facing a hefty penalty on your taxes for non-compliance is over. Also remember that if you like your doctor you can keep your doctor and the Affordable Care Act was going to reduce premiums. Oh, wait… it was going to at least keep them about the same. No? Well, at least they’ll rise more slowly.
Don’t tell that to consumers in the Tar Heel State. All but one of the previously available insurers have fled the exchange and the sole remaining participant – Blue Cross Blue Shield – almost left. They’re sticking around, but the already high premiums they charge will be jumping up by an additional 25%. (Washington Post)
More than 250,000 people in North Carolina are losing the health plans they bought under the Affordable Care Act because two of the three insurers are dropping out — a stark example of the disruption roiling marketplaces in many parts of the country.
The defections mean that almost all of the state, from the Blue Ridge to the Outer Banks, will have just one insurer selling ACA policies when the exchanges open again for business in November. The remaining company, Blue Cross Blue Shield of North Carolina, agonized over whether to leave, too. Instead, it is raising its rates by nearly 25 percent.
In no other state will as many people find such limited choice. But what is happening to nearly a half-million North Carolinians epitomizes a national checkerboard of ACA haves and have-nots.
The Washington Post is describing it as a “checkerboard of haves and have nots” while stressing that this is currently a worst case scenario. But it’s really a checkerboard of have less and have none when it comes to affordable options. The exchanges are imploding and with health insurance being mandatory, the cost will simply be crippling to a large portion of Americans.
Let’s circle back to what Ed Morrissey recently wrote on this subject about the effect on a rural family of three in Minnesota who have been laboring under this system. Keep an eye on the actual dollars and cents in this real world scenario.
Let’s lay that out. Minnesota House speaker Kurt Daudt told me about a local farming family of three that has to pay $2300 a month in premiums for 2016 for a policy with a $13,000 deductible. That’s $40,000 out of pocket before the first benefit outside of a standard wellness check (~$500 per person tops) gets covered. For some reason, they stuck with the insurance this year, but Minnesota’s rates will be going up 50-67% in 2017. On the low end, that’ll make their premiums $3450 a month, which escalates that threshold to over $54,000 with premiums and deductibles added together. That’s more than some hospitalizations would cost, so … why would they stay in the exchanges?
Stop and think about that for a moment. Even if you live in a higher cost of living area and have a fairly comfortable income which is well above the national median of around $56K, how many other monthly bills do you have which demand $3,450 per month? That’s more than rent or a mortgage in all but the most expensive enclaves in the country. Nobody who works at a regular job has a car payment or any other bill that high. And now think about the majority of Americans who earn anywhere in the range of the national median or below it. Those premiums for a family of three, plus the deductible, add up to more than their entire yearly salary.
If that’s how much insurance is going to cost and you can somehow afford it, why wouldn’t you just put $3,400 per month into your savings account? If you manage to not have any catastrophic illness or accidents over the course of the first year and you keep doing it you’ll have a great safety nest in case you get sick in the future. Then you could sign up for one of those plans with low premiums which only cover huge, expensive medical problems. Nope. The law says you can’t use a plan like that. It has to be one which provides all the bells and whistles mandated under the laughably named Affordable Care Act.
If only someone had seen this coming four years ago and tried to warn us. Oh wait… we did.