Saturday, April 20, 2013

Affordable Healthcare Act - Stay Uninsured?

Affordable Care Act (ACA)  3rd anniversary of March 23, 2013. When the major portions of the law take effect in 2014, will the nearly 50 million people who are uninsured decide to purchase health insurance, or chose to stay uninsured?  What incentive do they have to purchase health insurance, why not just stay uninsured? First, let's recap the reasons people do without health insurance:

1)       It is too expensive

2)       They had  it in the past and nothing was covered anyway

3)       They tried to buy it, but have a medical condition and were denied

4)       They believe that they do not need it

Of all of those reasons, the only one that the law does not remedy is the last reason:  the belief that one does not need health insurance.  The law has provided subsidies that make Affordable health care act, the law has mandated that all plans offer essential health benefits  and cost sharing limits so that the most necessary and basic health needs are met at every level of insurance, and, effective January 1, 2014, there will be no such thing as a pre-existing condition , and no way to have an application for health insurance denied. There is a portion of the law referred to as the individual mandate that requires every American citizen or those lawfully present in the United States to enroll in health insurance or pay a penalty called the individual shared responsibility penalty .  The penalty phases in through 2016:  2014, $95 per adult and $47.50 per child (up to $285 per family) or 1% of  family income;  2015, $325 per adult and $162.50 per child (up to $975 per family) or 2% of family income, whichever is greater;  2016 = $695 per adult and $347.50 per child (up to $2,085 per family) or 2.5% of family income, whichever is greater.

So, if the penalty is not that bad, especially in 2014 and 2015, why not just stay uninsured?

Health insurance delivers financial security.  Those harmed in an accident or become ill, will not have to pay out of pocket for treatment and will have access to all treatment available without risk of falling into bankruptcy, losing their homes or other financial disaster.

And, there are hidden costs of being uninsured:  waiting in emergency rooms for hours on end – causing missed work, children who suffer with conditions that are treatable, conditions that worsen…there is a famous saying in medicine that an ounce of  prevention is worth a pound of cure.  Health insurance delivers that prevention, as well as security and peace of mind.Is it possible to go without insurance for as long as possible, then buy it if a medical condition arises?  Is there such a thing as retroactive insurance?

No, there is no such thing as retroactive insurance, and the law does not change this.  If a person is injured in a car accident, the bill accumulated as a result of the accident cannot be paid by a health plan enrolled after the accident occurred, no matter how quickly one is enrolled.

What if the condition is one that does not happen suddenly:   say that a woman feels a lump on her breast, and decides to pay cash for tests to determine what the lump is before she enrolls in a health plan?

There will be no more pre-existing conditions or medical questionnaires, so a woman that wants to enroll in a health plan upon learning that she has breast cancer  will be able to do so.  However, it is worth noting that the tests that she will undergo to determine whether or not she has breast cancer will be VERY expensive to pay cash for.  Mammograms, biopsies, lab tests and consultations will cost much more than health insurance premiums had she enrolled in accordance with the individual mandate.
The true cost to individuals and families is the cost of the health care itself:  the costs of services for even the most simple of medical conditions quickly pass the cost of health insurance premiums, especially those that can be subsidized by Health Care Reform.And there is something else to consider:  What will health care providers do once the law takes effect?  Clinics, urgent care facilities and emergency rooms that deal with large volumes of uninsured patients often end up with noncollectable accounts as high as 40% of their receivables.  In cases of emergency, facilities that accept Medicare (virtually every hospital) are required by a law called The Emergency Medical Treatment and Active Labor Act (EMTALA) to stabilize patients without reimbursement.  And while that will not change because of Health Care Reform, what may change are
clinic and hospital definitions of "emergency" and "stabilization".  Will it be more difficult for an uninsured patient to walk into an emergency room with conditions other than severe accidents?  It is not clear yet how this law will affect health care provider policies, but it is clear that hospitals and clinics have a vested interest in treating patients that have the ability to pay their bill.

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