You’re never supposed to talk about politics. It’s bad business and it makes people mad at you. It’s hard to come across as neutral when discussing an issue like the Affordable Care Act. Even using the word “Obamacare” sounds like a pejorative to some. I’ll use the term since Pres. Obama said he’s cool with it, and that’s how most people know it. I’m also going to be really personal with you and tell you my own experience and how I came to my decision on quitting my Obamacare plan. Take this with a grain of salt, because I’m sure there are dozens of different opinions on this. Still for folks dealing with the ridiculousness of sky high premiums for horrible health insurance like myself, this article might be really helpful to you.
I’ve recently decided to take a risk with my healthcare because I just can’t stomach paying for something that’s essentially worthless. I’m speaking about my Bronze Affordable Healthcare Act healthcare plan. In honor of the failed Republican AHCA plan that also would’ve created a lot of problems, I’m turning myself into an open book for this blog post to explain why I’m quitting my Obamacare plan and what I’m replacing it with.
My ACA Healthcare Plan Covered Basically Nothing for Me
The ACA covers a lot, but only for certain people. If I needed preventative care for a host of items, I could get it. Free birth control or an IUD as a woman? I could get it. If I had a pre-existing condition and couldn’t get insurance before the ACA, I can get care now.
So I’m not trashing this law for the folks who appreciate the benefits they have under it. Rather, I’m saying that the ACA has made healthcare so burdensome and expensive for young, healthy folks like me that it’s impossible to have a functioning insurance market while it exists.
I experienced this first hand when I started earning enough of an income this year to not qualify for any subsidies (basically anything above $40,000 for an individual). Now, I was confronted with the true cost of my healthcare plan. I paid $204 a month for the Cigna Missouri Connect 5500 HSA Bronze Plan.
Here’s what’s crazy. My deductible was $5500 a year and then a $6550 out of pocket maximum. So keep in mind I’m paying $2400 a year in premiums for a policy that has a $5500 deductible. If I do anything short of have major surgery in a particular year, the policy essentially covers nothing.
A lot of folks will say “but wait! You can get a free flu shot or a primary care visit that’s included in that premium!” Yeah, and that flu shot used to cost $30 and the primary care visit might cost $200-$300.
So here I am, trying to spend money on things that make sense for me personally, and I’ve got to make a sacrificial offering of over $7000 to America’s screwed up healthcare system before I get any benefit from having insurance at all.
But the Coverage Was Actually Even Worse
So I looked into my plan a little more, and I realized that it only covered in network providers. What does that mean you say? The plan designated one hospital system in my city as in network. Luckily, that was the same hospital where my fiancee worked, so at least that helped some.
However, what if we were traveling and I needed some non-emergency care from another hospital? What if I needed to see a specialist who didn’t work in that hospital system because I contracted a rare illness? The plan I had covers $0 of anything out of network. So effectively outside of an ambulance ride from a car accident where I’ll die if I don’t get medical care, my health insurance is basically worthless outside of the city of St. Louis.
I Kept Paying it Anyway Even Though Most Millennials with Middle Class Incomes Don’t Need to
Why did I continue paying my premiums for a terrible healthcare plan? The first is I wanted to use insurance the right way and protect against a catastrophic loss. If I needed a big surgery, I knew that I would blow through that deductible in a heartbeat. After my experience getting extorted for $20,000 by the healthcare system after a car accident where I luckily experienced no injuries, I knew how vicious healthcare costs can be.
So in the face of imperfect information, I kept paying. I did so because I luckily have saved some assets that I live on along with my self employment income, so I could be totally wiped out by a big healthcare bill. All my life savings gone in an instant.
Contrast this to most millennials, and yes I know I’m very lucky. However, most folks in their 20s or 30s don’t even have $1000 saved for emergencies. There are no assets in taxable accounts for healthcare collection companies to go after. If they have savings, it’s probably in a 401k or IRA, which are protected from most creditors in bankruptcy.
So here’s the real question. If you’re young, healthy, not on your parents’ healthcare plan, and make more than $40,000 a year without kids, you qualify for no ACA subsidies. You also use the healthcare system very sparingly, as you can think of 1,047 different things you’d rather do than go see the doctor. If you need some sort of emergency care, you’re going to get it for free. Since the ACA forces insurance companies to accept everyone with pre-existing conditions, you know you can sign up for a health insurance plan if you need to whenever you want. If you can’t wait til the annual open enrollment period, just take advantage of one of the loopholes present in the law such as moving to another state.
So rationally, millennials over 26 with less than $10,000 in assets and more than $40,000 of income really don’t benefit at all from the Affordable Care Act. Most of my friends who work for small business, bars, restaurants, and other employers who don’t offer health insurance choose to forgo it entirely and pay the penalty.
How Did I Un-enroll in My ACA Bronze Plan?
So the first thing to know about the ACA is that it requires you to give 14 days notice before you’re allowed to cancel your plan. So I’ll probably get a bill at some point for the 14 days of coverage that I had even though I never used the plan even once. I logged into healthcare.gov and pressed the big ominous red button that said “cancel my insurance.”
After that, I continued to get letters from my insurance company telling me that I was eligible for income based subsidies. That was because they only looked at my 2016 tax return and extrapolated the income forward. I knew I’d have to come up with thousands of dollars at the end of the year if I took them up on the offer.
Then it got kind of unexpected. My insurance company Cigna started sending me letters even after I cancelled the insurance basically asking if I’d made a mistake and asking me to come back no questions asked. I think they know that folks who quit their healthcare plans are disproportionately healthy and cause large losses for them because they’re left with a worse risk pool.
Then I Found Out About Liberty Healthshare and Other Christian Healthcare Sharing Ministries
Liberty Healthshare is not insurance. Rather it’s a branch of the Gospel Light Mennonite Church. If you’ve ever been to Pennsylvania, you might’ve heard about the “Amish rate.” That’s what the Amish who don’t believe in or sign up for insurance pay in cash to healthcare providers. It’s steeply discounted from the posted rates, and their communities have bargaining power to get discounts because of their size.
So healthcare sharing ministries are an extension of that principle. The idea is that I pay a monthly “donation” to be a member, and other members reimburse each other’s expenses each month. It’s a not for profit organization, so there are no multi-million dollar executive mansions or golden parachutes.
Here’s how it works. I have a ‘deductible’ of $500 a year. Anything on top of that, I’m supposed to use my discount cards and membership to get lower cash rates for healthcare services, and Liberty Healthshare is supposed to pay for that expense. I became convinced in the organization after seeing a testimonial on a bloggers’ Facebook group from a woman who recently had a child and only had to pay $500 for the whole experience.
There’s also no in network or out of network distinction. So I can go to any doctor in the country and get my expenses reimbursed. It also includes a primary care visit to a doctor each year like traditional insurance.
What’s the Catch?
There are a lot of them. First off, the only healthcare sharing ministry you can join without expressly agreeing to live by Christian principles is Liberty Healthshare. However, all of them are based on biblical teachings, and fellow members send things like “get well soon cards” and prayer messages.
The idea is to create a community of believers, or in Liberty’s case customers who are open to a Christian oriented company, who want to share healthcare costs. Obviously this wouldn’t be able to work if it required a long list of essential health benefits or no ban on pre-existing conditions.
So Liberty will allow you to join with pre-existing conditions, but it won’t cover them for the first two years of membership. After that point it covers them 100%. A lot of people will be bothered by that, and I understand that point of view. I’m just not paying $2400 a year for a useless insurance policy.
Another issue with this “coverage” is that it’s not insurance. They’re not forced to cover your healthcare expenses. It’s purely voluntary on their part, which is a bit scary. Realistically, I feel like my insurance company wasn’t really under an obligation to cover my expenses anyway. I had to get so much approved by them before I did it, I might as well not have been covered.
Liberty also has a $1 million lifetime max benefit. That’s a significant sum, but if you ever had a rare illness or transplant surgery, their limits would not be adequate. This is essentially gaming the system, but you could leave a healthcare sharing ministry and sign up for an ACA plan if you had this type of condition happen to you.
The final stumbling block is that you have to agree to live by Christian principles for most healthcare sharing ministries. So that means no high alcohol use, drug use, activity leading to a lot of treatment for STD’s, lack of coverage for many reproductive health issues, and more. Because none of those restrictions affects me, it fits my needs a lot better than my previous ACA plan did.
My New Bill is $149 a Month with a $500 Deductible that I Can Use Anywhere. Hopefully it Works Out
So now I pay about $1800 a year instead of $2400. Additionally, I’ll only have to come up with $500 in out of pocket expenses if I get sick. If I get extremely sick, then I’ll probably be able to sign up for an ACA plan.
If you’ve not been using your Healthcare.gov plan and are generally unhappy with it like I was, I seriously think you should check out more healthcare sharing ministries more generally. Startups like Take Command Health now include them in their search for coverage. Most self employed personal finance bloggers I speak with are dumping Obamacare as well.
Why is that? When spending hard earned dollars, we’re focused on maximizing financial utility for ourselves and our families. If we’re getting zero value out of something as a consumer good, then we’re going to look for a better alternative. i personally don’t view the business world as a place for charity. I think charity is the place for charity. If you’re going to give money for the benefit of others, do so in a way that directly helps them instead of subsidizing an unsustainable system. At least that’s my opinion, with that and 50 cents you can buy a stick of gum.