I have always been a supporter of the Affordable Care Act, a/k/a the “ACA” or “Obamacare”—in theory. I recognized the need to provide affordable healthcare for all Americans, and I thought a marketplace approach was an all-American way of providing it. I wanted the ACA so that I could avail myself of it if I ever needed it. But I only became an ACA customer as of this week and I must say, I’m very impressed. In practice it served me as well as I ever could have hoped. It secured my family affordable health insurance with decent coverage at a more than reasonable price. For this reason, I would venture to say that it is as good for most people as any single payer system would be; and more importantly for those of us who are changing careers, it is a powerful tool for freeing us from jobs we dislike but would otherwise feel tied to because of the access they provide to affordable healthcare.
Initially, I thought that while the ACA might be a good thing for most Americans, it wouldn’t be right for me and my family. My concern was that I believed that with my projected income, I could pay lower premiums and co-pays with a stripped down, non-ACA plan. In fact, I initially even signed up for one, and thought I was getting a good deal. But I was mistaken because of three false assumptions.
First, I assumed that there would be a lot less choice in my marketplace, Tampa Bay, than there actually was. I thought I would be choosing from two or three high deductible, high premium, high co-pay plans that would mainly cover catastrophic health failures. As it turns out, there were over 50 plans for me to choose from, with a wide range of premiums, co-pays, and deductibles at a variety of prices. If I believed that I my family was unlikely to face a major health catastrophe, and provided I had sufficient savings, I could choose a plan with lower premiums and a higher deductible. If I believed that my two young sons would go to the doctor a lot for minor illnesses, I could choose a plan with lower co-pays and higher premiums or a higher deductible. Once I signed up for the exchange and was able to shop around on it, I was able to find a plan with the right balance of costs and services for my family, and given the variety, I think most of us could.
Second. I believed that I earned too much money to get the sort of meaningful subsidies that would make any ACA plan really affordable. My mistake here was overestimating how much income it was appropriate to report. Initially, I had estimated $80,000 USD for the purpose of the exchange, because I was hopeful that I earned at least that much. However, my ACA licensed insurance broker set me straight on the fact that my projected annual income was just that—a projection. He advised me to project based on the worst case scenario. This way, I could obtain more generous subsidies now, as I was earning the money, and if, or when, I exceeded my initial estimate, I could always amend my ACA application and pay back the subsidies in the form lower subsidies going forward or increased taxes at the end of the year. This way, I got the present monetary value of the subsidy, but with opportunity to change it as my situation changed. (Incidentally, you can choose to take your subsidy in a monthly payment, as a year-end tax credit, or some combination of the two).
Third, I was scared off by the fear of bureaucracy. Candidly, I thought that the government would want me to compile a whole bunch of evidence of my income and financial situation through tax returns, social security cards, passports and the like. (Just apply for a new driver license and you’ll understand my reason for concern). But again I was wrong. The ACA is just about the slickest government program I’ve ever seen. Signing up for the exchange takes minutes, and you self report all the vital data. (They may ask you to provide back up for certain income data, but they provide you several months to do it, and your insurance is provided without delay).
I was able to obtain, for an affordable monthly premium, a preferred provider plan, in which I may see any doctor I please without having to first go through a primary care physician. My family’s maximum deductible is $3900 USD with maximum out-of-pocket costs at around $5800 USD. I pay no copays for primary care and $5 copays for specialist care. I am assured the healthcare I need when I need it at a price I can afford in the worst case scenario.
It may be different for you. You may earn a more reliable monthly salary and therefore prefer a higher premium and higher copays in return for a lower deductible. You may prefer a higher deductible to cut costs and lower premiums. However, if you live in or near a major metropolitan area, there is a good chance you will be able to find a plan that fits your needs.
Why I Love This
I think the ACA is the American way. It provides a uniquely American solution to the global problem of affordable healthcare. Unlike the single payer plans provided in most developed countries, it places a uniquely American emphasis on personal responsibility. The government will help, but its up to you to choose and sign up and pay for healthcare to the best of your ability, and if you don’t, you pay a penalty. Personal responsibility. Actions have consequences. That’s very American. Moreover, while the governemnt creates a transparent marketplace and provides tax credits as needed, ultimately it’s a market with a variety of products at a variety of prices and it operates on capitalist principles. Insurers compete for your business by attempting to provide more choice and better quality at lower prices, and you choose a plan and pay for it. What could be more American?
A Great Tool For You
Whatever your feelings may have been in 2010, if you have any sort of independent streak, you should see the ACA as a highly positive development. Before the ACA, healthcare shackled you to your employer, and was one of the major barriers to quitting a job you didn’t like or starting a business if you wished. Premiums for individual plans were high, and even if you could afford them, you might not even be eligible if you had preexisting conditions.
The ACA unshackles you from your employer. Provided you have a cushion of savings, you don’t need to stay in a job you hate for fear that you, or someone in your family might get sick. And if you decide to go it alone, you can start your own business with the assurance that you will be able to obtain affordable healthcare.
If you believe in the core American values of entrepreneurship, self-reliance and capitalism, you ought to love the ACA because it makes all of those things more possible for ordinary Americans. For this reason, I think the ACA is the American Way.