There’s a side of the healthcare debate that isn’t being told, according to Mike Pirner. The Lenexa small business owner says the Affordable Care Act, or Obamacare, had a very damaging affect on his wallet and his health care. His insurance rates spiked after Obamacare was adopted in 2010 and fully implemented in 2014.
“When it was implemented, I was in my lower 30s. Now I’m in my 40s. It had a dramatic impact on men and relatively young men,” he says.
Before the ACA, Pirner’s maximum healthcare costs, including premiums and deductibles, in any given year was $3,700. That was about $100 per month with a $2,500 deductible.
“You could budget for that,” he says.
Kansas’ Low Insurance Rates
Before Obamacare’s implementation, Kansas boasted some of the lowest insurance rates in the country, according to Beverly Gossage, a former Kansas Insurance Commissioner candidate and a senior fellow with Independent Women’s Voice. Gossage owns a health benefits consulting firm. She lives in Eudora, but lately she’s been a fixture in DC advocating for the repeal of Obamacare.
Before the ACA, Kansas had 17 insurance carriers. Now the state is down to three carriers, and one offers only a single plan.
“(Kansas) had amazing rates compared to other states. When I show those rates to my peers in New Jersey, they’re like, where is this? How long ago was that? It was 2009,” Gossage says.
For example, a 40-year-old non-smoker wanting private insurance could find coverage for as little as $72 per month in 2008. A non-smoking 40-year-old woman could find health insurance for as little as $107 per month. A 60-year-old man could find private insurance in Kansas for as little as $195 per month. A 60-year-old woman could find coverage for $171 per month. The following year, 2009, a 40-year-old non-smoker could find health insurance for as little as $74 per month. A woman could find coverage for $110 per month. In 2009, the rates for 60-year-olds decreased in Kansas. A non-smoking male could be insured for as little as $179 per month, while a 60-year-old woman could pay as little as $162. These plans included a $5,000 deductible, but individuals could choose between plans with higher deductibles and lower monthly costs or higher monthly costs and lower deductibles.
Like most Kansans, Pirner’s maximum, annual out-of-pocket rates skyrocketed as Obamacare was implemented. To get a plan that covered the same things his earlier health care plans did, it would have cost him $560 per month with a deductible of $3,000 for a maximum annual cost of $9,720. Pirner chose a plan with lower monthly rates. His current plan costs $350 each month with a deductible of $6500.
“My maximum output went from $3,700 to $10,500,” Pirner said.
People can blame some of the other states for Kansas’ runaway costs. In 2009, states were free to set their own insurance mandates. Some states like New Jersey and Massachusetts had mandates similar to Obamacare, and their insurance rates reflected the cost of those regulations.
New Jersey, for example, limited what companies could charge individuals based on age or gender. New Jersey said everyone has to pay the same rate for insurance.
“If you’re an insurance company, what would you make the rate? You don’t even know what you’re going to pay for,” Gossage said.
Insurers probably determined what the highest-risk individuals paid for insurance on the private market. Gossage says 64-year-old females have the highest rates based on actuarial tables. (People over the age of 65 are covered by Medicare.) That becomes everyone’s rate, and in New Jersey, the rates were outrageous.
Other states mandated the ratio increase states could charge for age. For example, New Jersey and New York mandated that everyone pay the same rate, regardless of age. Obamacare mandated a 3 to 1 ratio. That meant insurers could charge older individuals up to three times the rate of the healthiest individuals. That change dropped rates for younger people those in places like New York, Maine, and New Jersey, but Kansans’ rates increased by 400 percent.
“Of course rates in New York and New Jersey went down, but they were sky high. When they talk about the average increase in premiums across the country–a lot of people live in New York. That factors in,” Gossage says. “But you cannot use national statistics when it comes to health insurance, because each state is so different.”
Most of the things being said about pre-existing conditions are scare tactics, Gossage says.
Before Obamacare, Kansas insurance carriers asked all kinds of questions to individuals seeking insurance.
“They might ask you about your avocation,” Gossage says. “Do you race cars or motorcycles on the weekend? They asked you things about parachuting. In other words, what things do you do where we might have to pay a lot of claims for you.”
Gossage said most people were able to obtain coverage regardless of their answers.
“The average American never spends more than $500 at a time on health care. Half of them spend nothing,” she says. “How many people do you know that say ‘I haven’t been to the doctor in three years. I don’t take any medications.”
A very small percentage of individuals who sought coverage on the private market were turned away.
“Most people got a policy even with pre-existing conditions,” Gossage says.
For the few who couldn’t get a policy, Kansas created high risk pools. In Kansas, only about 1,300 people were enrolled in high risk pools. In the high risk pool, a 40-year-old male paid $224 per month for insurance in 2008. A female paid $323 per month. Sixty-year-old males paid $532 per month, while their female counterparts paid $508.
Gossage says a lot of the people in high risk pools were people who waited to get insurance until they got sick. The cost for insurance through a high risk pool was capped, and the people in the pool didn’t have to pay the full cost of what their claims would actually be.
“Who pays for the difference? It wasn’t the taxpayers,” Gossage explains. “All of the carriers licensed to carry plans in Kansas paid a high premium tax that helped fund the insurance department and the high risk pool. We didn’t have a problem. It didn’t ever go bankrupt.”
Under Obamacare, 40-year-olds pay $364 per month today, and 60-year-olds pay $774. That’s with a$6,500 deductible, whereas before, most people in Kansas paid less with only a $5,000 deductible. Some low income individuals receive taxpayer subsidies to help with the costs, but for many, they are on the hook for the entire amount.
“How would you like to have been paying low prices for your family, and now you have these huge jumps in your premium, your doctor is not in your network, your deductible is much higher, you have to go through the government website and red tape, and you have to pay an agent to help you because the (insurance) carriers no longer pay commissions?” Gossage asks.
Essential Health Benefits
Essential health benefits are a primary cause of Obamacare’s runaway costs, Gossage explains.
“Anytime you do essential health benefits, you’ve got lobbyists knocking on the door and saying, I think our services should be free,” Gossage says. “Knock. Knock. Knock. Lobby, lobby, lobby. Let’s make that free. That makes rates sky high.”
The ACA mandates that every insurance policy cover the cost of child delivery. It’s one of several essential health benefits required by Obamacare.
Prior to Obamacare’s implementation, more than 30 states didn’t mandate maternity coverage.
Despite few regulations requiring it, many insurers offered child delivery coverage.
“Insurance companies could offer maternity, but people didn’t want it,” Gossage says. “They don’t want to pay the price for it.”
Adding delivery coverage to a private plan would cost a young couple an additional $300 to $400 per month, Gossage explains. But they could go to a midwife or have the baby at home for about $1200.
Gossage says pregnancy isn’t an unexpected, catastrophic event. Insurers would charge more and basically, you are pre-paying an insurance company to hold your money until they turn it over to the hospital after you deliver.
Because of the cost, most people chose coverage that covered the cost of complications. An emergency cesarean section or gestational diabetes would be covered, but delivery itself would not. Now every policy on the Obamacare exchange, even those for males, is required to include child delivery, upping the cost.
‘Very Expensive Catastrophic Insurance’
Before Obamacare, Pirner says he could go get an MRI or other diagnostic tests, see his doctor a few times and hit his deductible. He didn’t have to pay more than $3,700 out-of-pocket per year for care, so he visited the doctor without much thought.
“Unless it’s a true emergency, I’ve ceased all of that. I’ve put a lid on it,” he says.
He maintains his more expensive Obamacare plan, because there’s the tiny risk he could get hit by a truck or have some unexpected medical emergency and then be walloped with $100,000 in medical bills if he didn’t have a plan.
“I don’t want to drop the coverage, but it’s very expensive catastrophic coverage,” he says. “Obamacare has been very destructive.”