The Not-So-Affordable Care Act

pill bottleA few months ago I scoffed when my wife told me about a report from CNN that the average individual, unsubsidized health insurance premium was going up over 60%.

After receiving my 2016 premium notice from Wellmark Blue Cross and Blue Shield, I’m no longer scoffing. My monthly premium for family coverage went from $1,400 to $2,140, an increase of $740, or 53%. According to, the average Wellmark increase in South Dakota is 43%.

I immediately started looking for ways to decrease my premiums. This has become an annual ritual ever since Obamacare was pushed through Congress in 2010. Back then, my family health insurance policy (now considered a Platinum plan) had a low deductible with a maximum out-of-pocket of $3,500 and cost $660 a month.

Despite the President’s promise that “If you like your plan you can keep your plan,” I can’t even purchase that same plan today. If I could, I estimate it would cost over $3,500 a month. In order to keep health insurance affordable, each year I’ve reduced my coverage, increased my deductibles, and paid a higher premium than the year before.

I set out to analyze my options for 2016. After spending six hours crunching numbers and pouring over online calculators, I admitted defeat. There is no simple way to analyze plans to determine whether, based on your personal health care expenditures, you are better served to go with a copay or a deductible plan, a Bronze or a Silver plan, or if a Health Savings Account is preferable to a plan with coinsurance. All the online calculators I found were limited in scope and woefully generic. My health insurance agent didn’t know of any better ones, either.

Adding to my angst, while Wellmark makes policyholders’ year-to-date healthcare expenses available on its website, it doesn’t provide any breakdown of costs. You must figure out for yourself how many drug or doctor co-pays you had, the average cost of a copay visit, the average total costs of those visits, and any other information you need for any type of analysis.

This task was daunting for me, a financial planner and numbers guy. How are average consumers supposed to navigate it? The need for this information is so obvious, one wonders what the insurance companies are hiding by not providing it.

Ultimately, I selected a Bronze plan with no copays and an out-of-pocket cap of $11,900 on in-network providers and $18,500 on out-of-network providers. Based on my family’s average health care costs for the last three years, my out-of-pocket spending for premiums, covered drugs, and approved in-network medical providers will be $2,612 per month, or $31,344, in 2016. It was $11,420 in 2010. That’s an increase of 273%, or 18.3% a year.

By comparison, during the same time period medical costs only increased 16.0%, or 2.7% a year. The increase in premiums is clearly not about increasing health costs.

The $1,660 extra per month I had available to spend on consumer goods and services in 2010 is now going to insurance companies to subsidize the health care of others. This is a clear-cut example of a massive transfer of wealth.

Based on my family’s needs, if I earned $97,000 a year I would qualify for a subsidy of $912 a month. But since I earn over $98,000, I pay the full premium.

Clearly, the only people who find the Affordable Care Act affordable are those who receive a subsidy or who have preexisting conditions. For them, Obamacare was a godsend. For the rest of us, it turned out to be one of the most devious tax increases in modern history.

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3 Responses to The Not-So-Affordable Care Act

  1. Bobbie Munroe January 11, 2016 at 9:34 am #

    I must say that I am surprised that your prior rates were so low. Admittedly I am a 1953 model and a smoker and without a subsidy and 6800 out of pocket max and 6300 deductible I am at 931 for ONE person. It does seem FL is higher and if I lived 15 miles up the road in GA it would be less. My policy also covers all well care with no deductible and little, if any copay (I love this design). Checking out healthcare plans was an annual ritual for me long before Obama care. I’ve had about a 12% increased the last several years and that was about what I was experiencing before Ocare. The thing we all have to remember is that, whether we saw it or not, we were paying for healthcare for those with subsidies ANYWAY. We just didn’t see it in our healthcare premium. Several things:
    1. What would you suggest that minimum wage workers do for healthcare if there was no subsidy?
    2. How can we control the cost of care as that is the long term problem? Even the increase you cited is MUCH to high and unsustainable.

    I’m still a single payer supporter. All the administrative paperwork HAS to be inflating the cost and complexity. It’s a tough issue and I look for input from anyone to help move us forward.

  2. Jerry January 11, 2016 at 10:12 am #

    Rick, I agree fully that Obama Care is merely an offensive transfer of wealth tax increase. It was predicated on lies and deception.

    My question is if it is resinded, what is left in the market after such turmoil to create an alternative viable health care insurance system? What would it look like? Jerry

  3. Sally K Palaian January 13, 2016 at 8:38 am #

    Rick, with BCBS of Michigan I was able to log into my account to see exactly what was paid from them in 2015. The reporting however on their site was deceptive—-they made it look like they had paid like $20,000 for me—-however when I went through the individual explanation of benefits for the year I realized they had based that $20,000 on the non negotiated higher than what blue cross actually pays rate. They never laid out that much but made me think it from my account. If I had not looked into it , I realized I would have opted for a much bigger plan than I actually need.

    We have a family member who works for BCBS and he did finally admit that he thinks the insurances are really making off wit all these increases. He is not in financial part of the business but that is his take.

    As a psychologist, and health care provider, I know the providers are not benefitting from this. Physicians are not making off with all the money…..young people out of medical school cannot opt for private practice….because of their loans they have to opt to work for large corporations .

    I am not very political but I see that Once again politicians managed to separate Americans while theye handed our country over to corporate America.