The benefits that everyone with health insurance receives thanks to the Affordable Care Act (ACA), including no more denial of coverage due to pre-existing conditions and elimination of the lifetime cap on benefits, are at risk right now. Many have discussed the danger to all of us if the ACA is repealed.
But I want to tell you about something I haven’t seen or heard discussed yet:
Perhaps you, like most American workers, have health insurance through your employer. And while you may not want to see the ACA repealed, you believe that its repeal won’t affect you directly.
And, because you have health insurance through your employer, you believe that you would be covered by that insurance in case you experience a catastrophic illness or injury.
You’re sadly mistaken.
The Myth of Catastrophic Coverage
Think this through with me: If you suffer a catastrophic illness or injury, chances are that at some point you will become unable to work. Maybe that point will arrive immediately, or maybe it will take some time. But chances are, it will come.
OK, what then?
If you can’t work, chances are that your employer – the one who you buy your insurance through – will see that he has no choice but to terminate your employment. Why would you want to keep someone on the payroll who can no longer work?
So you lose your source of income. But you can still keep your insurance, right? Because of COBRA, yes, you can. But COBRA only assures you of the right to continue to purchase the same health insurance – it does NOT assure you that you will be able to purchase it at the same cost! In fact, you almost certainly will not be able to do that.
If you are like most people whose employers are the conduit for their health insurance, when you lose your job you also lose whatever subsidy your employer was providing you as a benefit. That alone could cause the price of your premiums to skyrocket.
As they used to say on late-night television infomercials, “But wait – there’s more!”
Now that you’re no longer employed in your position, the insurance company may no longer consider you to be part of the same defined risk group as the rest of your now‑former colleagues. This could happen immediately, or when your COBRA period expires (yes, your COBRA does expire!), depending upon your employer’s specific plan, the number of employees, the state your employer is insured in, and other factors. When that happens, you will be bumped into the undefined risk group, or in other words, the highest-risk group. Because if there’s one thing insurance companies do not do well with, it’s a group they can’t predict risk for.
Of course, just by coming down with a catastrophic condition, you’ve helped them predict your future health risk quite nicely, and that future is looking anything but rosy.
So what it comes down to is a multiple-whammy: you’re critically ill or injured, then out of work, which means no income, which means no way to continue to pay for the insurance you now need more desperately than you ever have before, because it’s suddenly much more expensive to you than it’s ever been before.
Which means you would no longer have insurance to cover your new health care needs. Which defeats the purpose of having insurance in the first place.
People finding themselves in this position have had the ACA to fall back on in the last few years, and that alone has saved many of them from financial ruin. But our new Republican overlords won’t allow that foolishness to continue much longer. Not here – not in the richest nation on Earth. Not in the only major nation which considers health care to be a privilege, instead of a right.
You remember the last recession? The one that was triggered in 2008 by the foreclosure crisis? As you may know, many of those foreclosures were the result of uninsured medical bills incurred by people who ended up being unable to make their mortgage payments. While it is difficult to get a handle on the exact percentage, it is reasonable to estimate that this accounted for between one-third and one-half of those foreclosures. Those people didn’t have the option at that time to look to the ACA. By creating the ACA, we have created a mechanism that can avoid a repeat of that crisis. Who would not want to have something in place that reduces the nation’s risk of recession by more than 33%? Take that option away, and it’s 2008 again, and nobody can argue that another recession would not hurt all of us.
Finally, when we are no longer providing coverage to the much larger pool of people which includes everyone who is now covered by the ACA, we will have a huge uncompensated care issue, which is a burden that will have to be placed upon the people who will still have health insurance, in the form of higher premiums.
You didn’t think repeal of the ACA – aka “Obamacare” – would matter to you because you have coverage through your employer.
You now know better.