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Obamacare: $500 More?

laughing-execsHealth insurers were likely howling with laughter in their executive conference rooms when they came to realize the windfall coming their way due to the Patient Protection and Affordable Care Act (i.e., “Obamacare”). 

Though many of us have been eagerly anticipating the overhaul of the healthcare system to drive down the spiraling-out-of-control healthcare costs nationwide, it’s unlikely it will do that (at least initially) and will almost certainly cost us all more money every month as well.

It’s going to cost my family and I approximately $500 more per month starting in JanuaryLet me give you my real-world example:

  • WHAT WE PAY TODAY: As a self-employed couple, my wife, son and my healthcare coverage costs us $1,173 per month (for a high, $5,000 per year deductible each). I should also note that this cost has gone up since our health insurers have been slowly ratcheting up costs, undoubtedly because they can “grandfather” in any cost increases before the healthcare marketplaces kick in this January. 
  • mnsureWHAT IT WILL COST US IN JANUARY OF 2014: The Minnesota marketplace called “MNSure” is coming online January 2014 and their website has this calculator. Based upon our ages and household income level, it estimates* our payments to be $1,667 per month!   (*The calculator estimates since the State of Minnesota DOES NOT YET KNOW what the premiums will cost. Seriously? MNSure comes online in just over four months and you can only ballpark the cost!?!).

That is an increase of $494 per month in our monthly premiums for a “Silver” plan — a 42% potential increase! There will be three tiers of plans: Bronze, Silver, and Gold. A Bronze level plan will cover roughly 60% of the costs of services MNSure offers. Silver will cover roughly 70%, Gold will cover roughly 80% percent, and Platinum will cover roughly 90% of the costs of the benefits provided.

OBAMACARE FACTS
A website that explains much about Obamacare called Obamacare Facts had a section on Health Insurance Premiums was enlightening but useless as far as anticipating (or even calculating) what we (or you) will write checks for coming in January.

Here is the punchline and why you can absolutely be guaranteed your healthcare premiums will increase come January:

Some insurance companies are using the confusion over ObamaCare to raise premiums on unsuspecting Americans in order to capitalize before more protections are put in place, grandfathering people into more expensive plans. This is in response to protections going into effect in 2014 and the need to cover more high-risk Americans. If this has happened to you, please tell us who your insurer is and give us some other background so we can continue to investigate who is behind this.

Note On Health Insurance Premiums: Your provider can “grandfather you in” by upping your premium now and keeping it that way once the insurance cap protections kick in in 2014. They can also grandfather you into plans that don’t provide coverage options that are required under the Affordable Care Act until 2015.

Sigh. We’ll have to see what benefits Obamacare actually brings but even I, a former cheerleader for heathcare reform, have put my pom-poms down and I’ve sat down on the bench.

About Steve Borsch

I'm CEO of Marketing Directions, Inc., a trend forecasting, consulting and publishing firm in Minnesota. Prior to that I was Vice President, Strategic Alliances at Lawson Software in St. Paul where I was responsible for all partnerships at this major vendor of enterprise resource planning software products and services. Read more about me here unless you're already weary of me telling you how incredible and awesome I am.

Comments

  1. Just had a die-hard republican friend announce at coffee last week that he may have to become a democrat since MnCare (Obamacare) was going to save him so much money – according to the estimate he had anyway — So, it appears everyone’s mileage may vary.

  2. Steve Borsch says:

    I sure hope so. Again, the kicker is that no one knows how much it will cost and the ‘ballpark estimates’ given are higher. Guess we’ll know for sure in October when it’s time to enroll, but I’m not optimistic.

  3. Patience (patients?) don’t succumb to panic. There is much to address when fixing an incredibly broken healthcare system. Estimates are estimates at this point. Thank your gutless inactive congress for spending more time dividing than conquering.

  4. Steve Borsch says:

    Will you hold me Phil? I’m so scared.

  5. My health care insurance has no co-pay or deductible, no maximum and never expires. My monthly premiums are zero. Why? Because I live in Canada and that’s how we do health insurance, with better outcomes than the U.S., at an average cost about one half per capita.

    Why do I mention this? Because that’s what Obama would have put into place if he could. Obamacare is an attempt to bend over backwards to appease Republicans (and the private insurance companies that fund them) to get just enough votes to pass. That’s why the companies get windfall profits and why many Americans continue to pay excessive rates.

  6. Steve Borsch says:

    No question Obama would have done a lot more if our Congress wasn’t in the hip-pocket of the healthcare industry. I hear from people I know in the U.K. and Canada who talk about just what you did: a system that works and doesn’t cost more than most mortgage payments like it does here in the U.S.

  7. Steve,
    I remembered you commented on by post several months ago regarding this mess. So Steve, you are in this business of building websites. Help me with the math. If http://www.healthcare.gov cost $500 million, and you pay your programmers $50/hour that is 10 million man hours or 1666 programmers working full time for three years??? Now don’t you think you could have deployed a website that doesn’t work for $400 million?

  8. Steve Borsch says:

    Howdy Dan,

    $500 million seems like A LOT for a transactional website, but having developers, paying for the infrastructure, bandwidth and more isn’t cheap…especially when you’re talking about millions of people signing up in a three month period.

    The big issue they had initially was that they didn’t architect the site to scale to enough concurrent users. They announced this week that they’d hit 50,000 concurrent users but THAT math is what stumps me. Especially after I read this:

    Zients said the site can accept 800,000 visitors a day after “doubling capacity” to 50,000 concurrent users. Users spend an average of 20 to 30 minutes on the site, Zients said, explaining the per day calculations.

    800,000 per day and we have what, 35-40 million people to get registered?

    That quote came from this article at Forbes: After Upgrades, Official Says 50,000 Can Now Use Obamacare Website Concurrently, 800,000 A Day

    But…

    Think about all the private sector retailers that have had MAJOR hiccups handling concurrent users. The list includes all the biggies: Walmart; Best Buy; Amazon; Target. It’s one reason I howled watching this the other night since he was spot-on: Jon Stewart Connects The Dots Between Obamacare And Black Friday

  9. Dan…

    Most big commerce sites – including Target, BestBuy, etc – took a year to complete, employed over 300 full-time people (not counting contractors/advisors) and probably cost a couple hundred million (and that’s a decade ago). These also don’t have the complexity of the healthcare portal on the back end. And, as Steve mentioned, all these big commerce sites had their teething problems. Some went down totally on Black Friday (Amazon) , others had just the back end cart/ordering go tilt (BestBuy).

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