Wednesday, June 15, 2011

Healthcare Update, or More Potential *&@*#!

With our end-of-the-month deadline looming to find new health insurance approaching, we’re holding our breath. Our hopes are not high. And I still haven’t heard thing one from my congressmen aside from boilerplate email responses.

Here’s what’s going on:

• Sayonara, Assurant Health. Fie to you and your more-than-our-mortgage premiums.
• Private individual market for health insurance sucks, according to my wife’s aunt who is in the business, and ObamaCare has made the situation worse.
• Regence Blue Cross/Shield of Idaho, take pity on we poor, simple folk.

Yeah, we’re going to give Regence a try, though our hopes aren’t high. We sent off our application material yesterday and hope that this company will actually offer us something besides the same old crap. Again, expectations are not high. Oh, we will likely be offered a policy. Whether it offers the care we’re interested in at the price we can afford is a different story.

How ObamaCare is making the situation worse, I’m a little fuzzy on. Though this report (sorry, registration required) from McKinsey & Company paints a pretty appalling picture. (This is only one report, I know. I’m still open to reports that have more rainbows and unicorns in them, but this is the one making the Internet rounds right now.)

Basically, the report says that of 1,300 employers contacted by the company, upwards of 30 percent are likely to drop employee health insurance as the ObamaCare provisions come into play in 2014 – this even despite penalties that will kick in further down the road.

Here’s the report’s key finding:
Starting in 2014, people who are not offered affordable health insurance coverage by their employers will receive income-indexed premium and out-of-pocket cost-sharing subsidies. The highest subsidies will be offered to the lowest-income workers. That reduces the social-equity advantage of employer-sponsored insurance, by enabling these workers to obtain coverage they could not afford on today’s individual market. It also significantly increases the availability of substitutes for employer coverage. As a result, whether to offer ESI after 2014 becomes mostly a business decision. Employers will have to balance the need to remain attractive to talented workers with the net economics of providing benefits—taking into consideration all the penalties and tax advantages of offering or not offering any given level of coverage.
Not pretty. The subsidies will be nice – as far as I can tell, we’ll qualify for some amount – but if we’re looking to the individual insurance market to keep prices down even with this potential influx of new insurees, well, I guess we’re also likely to buy swampland in Florida. (Yes, there are bright spots. The study also points this out):
This development should not suggest, however, that employers considering the elimination of ESI are focused exclusively on the bottom line, at the expense of their employees. In fact, because of the subsidies, many low-income employees will be able to obtain better health coverage, for less out of pocket, on an exchange than from their employer.
So we’ll see what happens. Feeling pessimistic, however.

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