Once upon a time — which probably ought to begin any Obamacare story — one of the justifications for a national Affordable Care Act was that people were being cheated by insurance companies offering them “fake insurance.” This was defined as one of two things: either low-cost insurance that also had limited benefits, or catastrophic care insurance that had very high deductibles.
In the old days, a “catastrophic care plan” is what in the even older days we called “major medical.” Basically, a catastrophic care plan has a very high deductible, like $5000 to $10,000, and only kicks in if you have something expensive happen. A catastrophic care plan is real insurance: you bet the insurance company that you will get hit by a truck, and because the insurance company knows it’s unlikely, they’re willing to bet you long odds against. So you get the policy inexpensively. (I explained why common “health insurance” isn’t really health insurance in 2008 in “Health Insurance Ain’t Insurance,” and how Harry the Bookie got into that business in “The Arithmetic Absurdity of Obamacare.”)
It happens that I started a new day job as a principal engineer a couple of weeks ago. It’s for a Very Large Company, VLC. It has a health insurance plan that is, if not the absolute best one I’ve ever had, a nicely adequate one. It’s what’s called a “high deductible” plan, but that means a $1500 deductible, with both a health savings account to which the company contributes, and a flexible spending account. Looked good to me. With my contributions to max out both the HSA and the FSA, my net deduction from my pay is around $600 a month — but remember, that’s almost entirely pre-tax money going into accounts I can use to pay for health care of various sorts.
Because of the ACA, however, they were required to notify me I could opt out of their plans, and choose instead a plan from the health insurance exchanges.
Okay, so just to reassure everyone I haven’t completely lost my mind, when this option was offered, I immediately said “you mean I can opt to buy my own expensive and inadequate coverage instead of going with the company’s plan they pay for?” And, reassuringly, the HR person explaining these plans answered, “Yes, that’s about it.”
I did get curious, though: what would that option be?
So I went to Connect for Health Colorado, the Colorado exchange website and … well, tried to sign up. After filling in a long page of personal information, I tried to submit it, and got an error: I hadn’t entered the state.
“Wait,” you say, “this is a Colorado exchange site, don’t they know what state you’re in?” And well you might ask, because while there is a box for the state on the form, it’s inactive — you can’t enter anything into it.
So I went to the eHealthInsurance commercial website and was able to get an account set up there. (Bear with me, we’re getting to the punchline.) I looked for the least expensive, not to say cheapest, plan I could get. Here’s a screen capture of the associated terms:
The actual premium: $468.33. But look at the terms: a $5000 deductible. Co-pay of 30 percent, but office visits are subject to that deductible, so you don’t get the 70 percent discount until you’ve used up that five grand.
Of course, under the ACA, I get some things for “free” — preventive care, like basic checkups (but not the lab work); and I get free GYN care and pediatric dentistry, so if I ever need to see a gynecologist for family planning, or have any pediatric dentistry needs as a 60-year-old single guy, I’m set.
Look further in the terms, and it turns out that drugs are covered, but subject to the deductible. Diabetic care supplies are covered, but only subject to the deductible.
Bottom line: this plan, for $468 a month, pays for an annual checkup but no labs, vaccinations on the approved list, which includes a flu shot but not the shingles or pneumonia vaccinations I could use now, and pretty much nothing else until I’ve gone out of pocket $5000. The maximum out of pocket is then $6500, so were I to get hit by a truck or have a heart attack, then hospitalization would be covered.
In other words, it’s a catastrophic care plan.
That $468 a month, $5,616 a year, pays for a doctor’s appointment and some vaccinations. The rest of it, most years, is going entirely to pay administrative costs — and, of course, to pay for the GYN and pediatric dentistry of other people. Yet somehow, through the Magic of Obamacare, the old “totally inadequate fake insurance” catastrophic care plan has been transformed like Bottom into a “good health insurance plan.”
The difference being that only Bottom was transformed into an ass; instead, Obamacare has made asses of us all.