Welcome to the Wonderful World of Obamacare!

ProgressOhioEven though my husband works for a small business, we have always been blessed with wonderful health care coverage for our family of seven. With Personal Choice, we paid nothing for the insurance itself, and only had to cover copays and prescriptions.

With Patient Protection and Affordable Care Act (PPACA) and Health Care and Education Reconciliation Act (HCERA) signed into law in 2010 by President Obama, small businesses like the one that employs my husband are having to switch to health insurance which puts the burden of the risk onto the employee.

I don't pretend to be healthcare expert, and I'm being dragged unwillingly into figuring out what this means for my family. As of today, I can tell you that these changes are going to impact middle class families like mine, and not in a way that is beneficial for our financial future.

The plan being provided by my husband's employer consists of two parts. First, we will be part of a high deductible health insurance plan. In plain English, all of our well visits and vaccinations are covered, along with routine gynelogical care and mammograms. That's it. Everything else, like a sick visit, or a visit to the emergency room, are covered after the $3,000 per year deductible for a family.

The other half of the equation is the health savings account. In our case, my husband's employer is covering half of the deductible which will go into the health savings account for a total of $1,500 for the year with monthly payments of $125. As a family we can contribute pretax dollars maxing out total contributions at $6,250.

Fortunately, I already have medical expenses in our budget to cover copays, prescriptions, eye care and equipment, and emergency room visits for a total of $1,196. We can contribute this amount out of my husband's paycheck as a pretax contribution.

quinn.anyaHere is where it gets dicey. Let's just say, using an example from last month, that I need to take 3 children to the doctor for a sick visit, plus get prescriptions for amoxicillin and eye drops for them, and also take another child to see a specialist. None of these visits and prescriptions are covered under our new plan until we reach the $3,000 deductible. Now, if I have these visits towards the ends of the year when I have a significant balance in my health savings account, I should be fine. I may have met the deductible at this point, and these visits and prescriptions will be fully covered.

Let's just say, these visits come at the beginning of the year when I have no pretax dollars in my health savings account, other than the $125 that my husband's employer has deposited, and whatever has come in through my husband's pretax contribution. Maybe it's January 15th, and we have $175 in the account. If each doctor charges $125 for a visit, I've already wiped out my health savings account with its pretax dollars and started dipping into my own money. As of tax year 2009, I have to reach a certain limit to put these medical expenses paid for by post-tax dollars onto my income tax form. Given the health of my family, this won't happen.

What if on top of the sick visits and prescriptions in the scenario in the previous paragraph, one of my children breaks a bone and needs to go the emergency room? How much will that cost me out of pocket? Once I hit the $3000 deductible, insurance will pay the rest, and I'll have to set up a payment plan with the hospital for my portion because I won't be able to pay that bill immediately with my health savings account.

Another expense to be considered is the fee associated with the Health Savings Account. A fee of $2.50/month may sound tiny to some, however, consider this fee as part of the bigger picture. For the 1st 3 statement cycles of the account, there is no fee. The fee is waived if the balance is over $2,500 or the balance is over $1,500 and there is an electronic deposit made during the statement cycle. Unfortunately, we're stuck with this particular bank.

For 2012, starting in April we'll pay $2.50 until our balance is at $1,500 since we'll have electronic deposits from my husband's paycheck. Best case scenario, we reach $1,500 in November, but since I'll be using the account to pay for eye care and equipment and sick visits and prescriptions, we may never reach $1,500. Not this year or any other year, unless we leave a balance of $1,500 in the account. If we stick with direct deposit from my husband's paycheck, it could take us 2 years to build up the balance to meet the minimum. That's potentially $60 in fees over 2 years. Are those fees tax-deductible? Probably not, since I expect the bank to take them out of our pretax dollars in the account.

At this point, as I delve into the nitty gritty of the health savings account and the tax implications, I think we may need to shift some of our budget being used to pay off a car loan and our home equity loan early to the health savings account to build up reserves and hopefully move us closer to avoiding the monthly account maintenance fee. While I appreciate having well visits and routine vaccinations covered 100% by the insurance plan, I do worry about the potential financial impact of getting sick early in the year not to mention the bank's fee associated with holding our own money. 

I'm left wondering how many people would hold off going to the doctor under this type of insurance plan until they are seriously ill and have no other options. How many parents will struggle with whether to take their children in for a simple ear infection knowing that it will cost them approximately $150 out of pocket?

Comments

[coleen]

Barb,
I think alot to parents will have some hard choices to make when it comes to dr. visits etc. Is this all really for the better??
Are you sure that after you meet your deducible your insurance will pay 100%? Most times its a percentage of the balance. Double check that.
When we had a HSA you had to use the $$ in that calendar year.
We also had a flexible spending account the we used to cover our co-pays, deducible etc. Does your husband have that option?
This is all very confusing for most people. I do medical billing for a group of doctors, if I can help you in any way just let me know.
Coleen

[Nick Carraway]

This sounds stressful! I don't have kids and haven't been to the doctor in years, but your post is making me want to start seriously saving up for both eventualities. I don't get why you can't rollover your HSA money into the following year. That would make sense...

[James Dugan]

I am scared of this new plan, and everyday the idea of my company helping with with my family's healthcare costs becomes more important. I have had many visits to the the doctors for my kids and family members over the past few years and I would be in incredible debt if it wasn't for insurance.

I also believe it is a fundamental right to have healthcare in this nation. I believe it is the individual and the nation that should make the choices and not healthcare insurance (which I believe are good) and businesses that should make it part of a salary. We have to take a larger role and see it as a fundamental and essential part of our lives and being American.

The post above is a real reality and I feel the pain of people who haven't paid this. But many Americans have no idea what healthcare, doctors visits, medicines, and procedures are until they are seniors. I feel this is the only way to really make changes to our health, gain control of spiraling prices, and make sure everyone can see a quality doctor and good hospital when they need it.

I really enjoyed your personal insight and it is really the first time I have read of an individual dealing with the coming healthcare changes. It will hurt to pay out of pocket, but I believe it is a lot cheaper than the rates the insurance companies charge today if you do not work for a business that covers you or you are self-employed. We must remember there is nothing more important than good health and we for the first time, with the help of all Americans paying their part, can provide a system that protects everyone.

It has problems, but I believe it is the first step into a better health system for all Americans.

Great lunch.

[Patrick Edmonds]

I feel very sorry for you. I have been visiting doctors quite frequently over the past three years, and I can't imagine being in your situation. Your personal, frank insights and concerns are so refreshing in comparison to all the political waxing we often hear concerning this issue.

As much as Dugan still seems content with displacing this burden on the working class, who are going to suffer the most from such changes, it must be made clear that tax paying Americans do already assist those less fortunate with contributions to medicare and medicaid through taxes. These programs are supported on the backs of the middle class, and now with this new plan these same people who cover so many other costs in America must pay that much more.

Taking into consideration Barb's story and forced upon troubles, I refuse to see this as beneficial or equitable for the American public.

[Barb Hoyer @ A Life in Balance]

Coleen - this plan has us fully covered after we meet the deductible. However, there's another number on the plan, and when I called to ask questions about it, I didn't get anywhere. I have to call January 1st. The HSA is a HSA that does roll over from year to year which helps, but who wants to tie up money in a very low-interest bearing account? Unfortunately, we don't get a choice about where to have the HSA.