What does the ACA looks like to a pretty healthy 50-year old male in Seattle who's been in the individual market for a number of years and has an income above any subsidies? Not bad. And below are all the numbers showing why.
First, you need to understand where I am at now. I have a high-deductible HSA-eligible PPO with a $3500 deductible and yearly out-of-pocket max of $5000 (includes deductible) and co-insurance of 50% between the deductible and OOP max. Until last year, the plan didn't include prescription coverage which was a huge potential liability for me. This year prescription coverage was added, but rates didn't go up to reflect that, so basically somehow I got a year of prescription coverage basically for free. Not sure how that happened, but it was related to preparing closed plans for the ACA and needing to meet actuarial values. It's an important point however when trying to compare apples-to-apples. My current premiums are $200/month, but those are really below market and unsustainable. For a better comparison, if I try to buy a comparable HSA PPO plan today with prescription coverage, with a $3500 deductible, and $5000 OOP max and 20% co-insurance (the closest comparison I can find), the rate would be $346. That $346 is more representative of what I should be paying for a plan with prescription drug coverage and in-line with numbers I've seen in past years when I've considered plans with drug coverage.
For 2014, I can find the rates on the Washington health exchange (still glitchy, but I've got the information from it...). The HSA plans I'd look at from the exchange are:
Bronze: $5250 deductible, $5250 OOP Max, co-insurance: 0%, Premium: $315
Silver: $2500 deductible, $4100 OOP Max, co-insurance: 20%, Premium: $395
So how to do an apples-to-apples comparison? Continue beyond the squiggle for all the numbers.
To compare plans, I like to look at the my total medical bills (at the insurance company negotiated rates, but excluding preventative care which is 100% covered) vs. what I actually pay out if I add up premiums, deductible and co-insurance costs up to the OOP max. The results are shown in the table below. The left column is the total medical bills encountered in the year. The other columns are the expenses based on the plan shown. For each plan I show two numbers. The first number is my total expense for the medical bills. The second number is how much more or less I pay over not having insurance at all. So, for example, if I rack up $3000 in medical bills (roughly what I ended up with this year, mainly to be told I'm getting older), for the Bronze plan I'd have paid 315*12+3000=$6780 to cover $3000 in medical bills, a loss of $3780, shown as the second number. Of course, what I'm buying insurance for is the off-chance of needing a $40000 surgery, where I'd pay 315*12+5250=9030 to cover that 40000, meaning I'm ahead $30970.
Here are the numbers for the Bronze and Silver compared to a current plan with prescription coverage (sorry if the formatting is messed up in your browser, this works better in a spreadsheet):
Expenses Bronze Silver Current
$0 $3,780, ($3,780) $4,740, ($4,740) $4,152, ($4,152)
$1,000 $4,780, ($3,780) $5,740, ($4,740) $5,152, ($4,152)
$2,000 $5,780, ($3,780) $6,740, ($4,740) $6,152, ($4,152)
$3,000 $6,780, ($3,780) $7,340, ($4,340) $7,152, ($4,152)
$4,000 $7,780, ($3,780) $7,540, ($3,540) $7,752, ($3,752)
$5,000 $8,780, ($3,780) $7,740, ($2,740) $7,952, ($2,952)
$6,000 $9,030, ($3,030) $7,940, ($1,940) $8,152, ($2,152)
$7,000 $9,030, ($2,030) $8,140, ($1,140) $8,352, ($1,352)
$8,000 $9,030, ($1,030) $8,340, ($340) $8,552, ($552)
$9,000 $9,030, ($30) $8,540, $460 $8,752, $248
$10,000 $9,030, $970 $8,740, $1,260 $8,952, $1,048
$12,000 $9,030, $2,970 $8,840, $3,160 $9,152, $2,848
$14,000 $9,030, $4,970 $8,840, $5,160 $9,152, $4,848
$20,000 $9,030, $10,970 $8,840, $11,160 $9,152, $10,848
$40,000 $9,030, $30,970 $8,840, $31,160 $9,152, $30,848
$60,000 $9,030, $50,970 $8,840, $51,160 $9,152, $50,848
$100,000 $9,030, $90,970 $8,840, $91,160 $9,152, $90,848
You can see that if I don't have very many medical expenses, the Bronze plan is the way to go. For a medium to high range of expenses, I'd be better off with the Silver. The current plan is in-between at the low end of expense, and a worse plan at the higher end.
So what's the bottom line?
First, I could argue I'm being 'forced' to buy prescription coverage. But I'm OK with that. Although I'm not currently on any medications, I'm well aware a full course of some chemo drugs can easily run $50000 or more. I know I should have the prescription coverage and prodding me to have it is a actually a good thing.
Second, I could argue that my premiums are rising 50%. But that's mostly due to the addition of the drug coverage. Again, I'm OK with this because you don't get things for free.
Third, although my rates are going up 50%, the ACA rates are really saving me money over the current market rates for plans with drug coverage.
Fourth, I have guaranteed coverage in the future. This is huge. It scares me that if I do develop a pre-existing coverage under the current rules, it's almost impossible to change insurance plans from then on. And make a mistake and miss a couple payments and your just out of luck.
1. I'm going with the Bronze since my $3000 in expenses this year was higher than usual for me and hopefully will be less next year.
2. Even if I'm wrong about my level of medical expense, my largest liability is $9030. That would hurt, but I could handle it. Limiting that liability is why I have insurance.
3. ACA is a good thing. I get guaranteed coverage and a prescription drug benefit to limit my total liability at a reasonable cost.
4. This is why the ACA will succeed. When based on a true apples-to-apples comparison with real numbers, it just makes sense.