‘Absolutely ruined’ retirement
Gil and Linda Ravelette’s carefully planned retirement is unravelling. Thanks to health insurance.
Gil, 70, is on Medicare. But Linda, 60, has only one insurance option: the Affordable Care Act, or Obamacare, exchange. Blue Cross is continuing to offer plans in their home area of St. Marys on the Georgia coast, so last year she received her annual letter offering renewal. They opened it to find her $906 premium, already straining their budget, would rise to $1,545. Per month.
That was the silver plan; they went instead with the bronze plan, with a higher deductible but a premium of $1,168.
If you add in the deductible, “that’s more than our mortgage payment,” Gil said. “My problem is I have no other choices. I have absolutely no choice.”
They’ve done the math and their retirement plans won’t work now. With her new deductible of $6,750, their annual cost out of pocket will likely be more than $20,000. She’s got five more years until Medicare.
Even on $900 a month they went through so much of their regular savings that they’re almost out. Next, he’s preparing to tap his individual retirement account. He sold the sports car he bought with his retirement payout. He sold his golf cart, so his wife now drives him to the course in their only car. Now they are trying to sell their house and move into a cheaper one. That, they hope, will clear $150,000 that they can live off of for a few more years.
“We’re not destitute,” he said. “I want you to understand that. But this has ruined our retirement planning. Absolutely ruined it.”
Adding insult to injury, at a $48,000 annual income, they qualify for a partial subsidy on the ACA exchange. But this year, in order to pay all their bills as originally planned, he will have to withdraw from his retirement savings. And that will increase his income so much that it will lower or eliminate the subsidy — increasing his insurance payment.
They have sat down and talked, and it comes to this: If the house doesn’t sell, she’ll have to go without insurance next year. At 61, with high blood pressure.
“I don’t think there’s one senator in Washington or one representative that has one clue what I am going through,” he said. “For my wife to have to pay $25,000 for health insurance in America is insane.”
An HMO world
There’s another impact to the narrowing choices the Ravelettes faced: a limited network of providers she can see. Although Linda suspects she will need physical therapy this year, she will not be reimbursed for going to the therapy center 10 minutes from her house. The only one in network, she believes, is 2 1/2 hours away.
This year the networks have all but closed in, turning into health management organizations, or HMOs.
The four companies serving Georgia insurance customers on the individual market — Blue Cross, Alliant, Ambetter and Kaiser Permanente — reacted to the grinding uncertainty in similar ways. They raised rates steeply. Some pulled back coverage; although every county has an insurer on the ACA exchange, there are now only 14 counties in Georgia offering two companies to choose from.
And all of them now offer only an HMO plan or something akin to it. In an HMO, the company maintains much tighter control over which doctors the patient can see.
For Brad Freemyer’s brother Jeff, losing the choice of doctors he had with Blue Cross for 40 years and adopting an HMO policy this January suddenly became a crisis.
Jeff’s daughter, who is covered under Jeff’s policy, realized her old hip injury was back. They had twice been through the tortured journey to getting the right diagnosis and the hip surgery that fixed it. They were certain she would need the surgery again, and they knew only one doctor who understood all that.
So, signing with a new company for the first time in 40 years, Jeff and his agent each separately made sure the hip specialist and primary care doctor were covered under his new plan. The agent checked the company’s internet database and found the doctors there; Jeff called the doctors’ offices one by one to ask personally. The important ones were in network. Jeff was “just pleased as I can be.”
Except they weren’t in his network at all.
The agent and the doctors’ staffs were each new to dealing with the insurer, Kaiser Permanente, and they misunderstood the information at hand. Kaiser is an HMO. For most Kaiser patients there is no network of outside doctors; their doctors are Kaiser employees in Kaiser facilities. Without a referral from a Kaiser doctor, an outside doctor visit will simply not be covered.
Talking to a clerk at one doctor’s office, Jeff recalled: “He says, ‘Well, we are on some Kaiser policies but not all; what’s yours?’ I say, ‘Kaiser silver HMO.’ He says, ‘We’re not on any of the HMO policies.’
“I’m just floored.”
Jeff and his daughter, Caroline, went through days of high anxiety, fearing a Kaiser doctor who didn’t know Caroline would put her through months of cheaper but ineffective treatment and she would never get her surgery.
Swamped with patients
That didn’t happen either.
For one thing, they were impressed with her intake doctor at Kaiser. Then as luck would have it, Kaiser is swamped with new patients it picked up from Blue Cross and the other companies — perhaps 65,000, executives say. They’re swamped even after hiring 30 new doctors last fall, contracting with 230 outside providers, holding off on January vacations for doctors and expanding their call center with people specially trained to handle 2018 confusion.
So at the moment Kaiser is being generous with outside referrals. Caroline got permission from her new Kaiser doctor to see her old specialist. She has a surgery date.
Jeff is thrilled with Kaiser now. “I was pleasantly surprised,” Caroline added. “It was great.”
Kaiser executives acknowledge that when things settle down, Kaiser doctors may give fewer outside referrals.
Kaiser Permanente’s executive medical director in the Southeast region, Dr. Mary Wilson, says that’s a not uncommon concern at first, and patients can appeal. But, she said, “What we find is, when people stay with us and they’re (initially) scared of, say, our specialty care, and they experience our specialty care, they’re not asking to go out anymore.”
What’s not looking rosy is the prospects for a fix to premiums. For 2018, Kaiser raised its premiums 31 percent, not the 50 percent range of other companies; it gambled that Congress would live up to promises to fix a problem with ACA subsidies. But it lost that gamble, and now it may be losing money.
“We’re at risk for being less than break even,” said Jim Simpson, the president of the southeast regional office. “The road that we’re on, the risk of premiums going up is absolutely a possibility.”
A premium of $0
In refusing to fix the subsidy problem, Congress started a domino effect. The White House quit paying the subsidy money, but Congress did not do away with the requirement that insurance companies subsidize premiums for lower-income people. So oddly, while premiums skyrocketed for many people in order to make up for the lost federal subsidy money, the way the law worked, many lower-income people who get subsidies ended up getting even bigger subsidies.
Wendy Adams, 51, is a currently disabled former corrections officer in Plains whose husband operates heavy equipment. Last year her insurance rose to $176, a fortune for her. “I was like, I can’t afford this,” Adams said. Between that and an administrative mixup, she dropped the policy.
Then came the tumult with the subsidies in Washington. She checked the ACA exchange company in her area. It was now Ambetter, and she was now eligible for a zero premium and a $5 co-pay.
“It’s wonderful,” she said. “That means to me the world. It goes beyond.”
She just hopes that policymakers who take a whack at health care next time understand the stakes.
“There are a lot of families that really can’t afford the high premiums,” Adams said. “With the subsidy, it gives them the opportunity not only to go to the doctor, but to get the health care they need. A lot of people need to go to the doctor, and for that reason they don’t go.”
Brad Freemyer and his wife, Cindy, feel they are covered. They just don’t have insurance.
They were already paying $1,300 last year when they realized their price hike for 2018 would be untenable.
“Basically, we just keep seeing it rise and rise,” Brad said. “It wasn’t a total shock, but it was definitely disheartening. It was at a tipping point, how are we going to keep managing.”
Brad called his state senator, and the state Insurance Department, who couldn’t help. “I knew, I just knew that with less options — and it was already in the last few years getting more and more and more expensive — it wasn’t going to be a good thing. I’ve never been an HMO-type plan fan.”
The Freemyers happened to have a number of acquaintances who went into “sharing” plans that are based in religion and are not defined as insurance. Such plans were exempted from insurance requirements under the ACA as a gesture to the faith community. So even though the individual mandate to have insurance is still in effect for another year, and even though sharing plans usually don’t cover basic things such as pre-existing conditions, the sharing plan satisfies the law.
Like insurance, the members pay in monthly, and the pool of money is used to pay medical bills. Unlike insurance, it’s not regulated, and the plan is under no legal obligation to pay.
“They’re not regulated. At all. They’re not insurance,” said Karen Pollitz, a senior fellow of the Kaiser Family Foundation, a health research nonprofit. She noted that real insurance companies are at least backed up by a state fund if they go bankrupt, but these are not. “I’m not surprised if they’re happy and they haven’t had to use it yet. If they need to use it, I wish them well. … If they were uninsured they might be happy too, it’s even cheaper.”
If the member wants to appeal a denial, the sharing association Brad and Cindy joined may decide to pay after all. But if they don’t, there’s not much recourse. The association, Liberty Healthshare, says so on its website.
“Remember who and what we are,” it states. “Liberty HealthShare is a voluntary association of like-minded people who come together to assist each other by sharing medical expenses. Such a sharing and caring association does not lend itself well to the mentality of legally enforceable rights.”
The Freemyers know that and aren’t scared.
“I feel like regulated insurance companies already make those kinds of decisions,” Cindy said. “They deny people tests and the ability to see different doctors all the time. How is it different? They’re sitting behind a computer deciding what lab tests, what medicines work for you, and they don’t necessarily know you. And we’re not necessarily like-minded with those folks.”
Brad hopes that an upside of the turmoil is that people will take more ownership of their situations and seek out better care for their money.
“To me, the biggest benefit in all this insurance mess is it has driven people to be aware that it’s costing them money,” he said. “It’s not a good situation.”
Six things to know about 2018 health insurance
The political turmoil over health insurance in 2017 produced big changes for Georgians and all Americans starting Jan. 1. Here are some key facts:
The individual mandate
It’s still here! The mandate that every American have health insurance will last throughout 2018. Congress did repeal the penalty, but that repeal won’t go into effect until 2019. If you try to file your taxes without health insurance for this year, the Internal Revenue Service says you’ll pay the price.
People signed up
The Trump administration took actions that many thought would decimate Affordable Care Act exchange enrollment. That didn’t happen. Although the enrollment period was cut in half, the pace of sign-ups surged to make up for it. Although the administration cut way back on advertising the open enrollment period, news stories about the cutbacks helped spread the news anyway. In the end, enrollment as counted on Dec. 23 only fell about 3.6 percent nationally. The drop was only about 2.6 percent in Georgia, exceeding 480,000 sign-ups in the state for 2018.
Rates went up — and down
When the White House stopped paying subsidies called Cost-Sharing Reductions for Affordable Care Act premiums, it turned the ACA financing upside down. Insurance companies backfilled the gap by charging some customers more. And that money is going to make some lower-income customers pay even less.
Careful with “sharing” plans
The ACA exempted faith-based cost-sharing plans from its normal insurance requirements, so many Georgians have signed up for these instead. The cost is much lower than traditional insurance. But experts say beware because they’re not regulated at all. They usually don’t cover pre-existing conditions. They don’t have to pay claims.
This year, several companies changed markets, but none more than Blue Cross Blue Shield of Georgia. Blue Cross has pulled out of the individual market in the Atlanta and Columbus areas, and out of Chatham County, where Savannah is.
Prices already spiked. But they could spike again. GOP leaders in Congress promised to look at reinstating the subsidies, but they haven’t.
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