ACA, Don’t Go Away: The ACA, FIRE, and Uncertainty

I sat down to write a post about how the ACA — affordable, if not cheap, health insurance — enabled us to retire early, and what its now uncertain future means for our lives and lifestyle. But Dr. Doom already did. Read his post first, then come back here, if desired. Our details are different, but most points of Dr. Doom’s post apply directly to us.

We’re worried about losing access to affordable health insurance, and thus our ability to have our own business and FIRE (in shifting proportions). This lifestyle has another name: freedom. The Republican party has consistently tried to weaken and repeal the ACA legislation since 2010. Those are the facts.

So are these.

Our Situation

  • In mid-2015, my husband and I retired early, at ages 38 and 39.
  • We enrolled in a Blue Cross Blue Shield (BCBS) plan purchased through the Covered California website, our state’s health insurance exchange.
    • Because we voluntarily quit our jobs and were not fired, the insurance company REQUIRED us to purchase our insurance through Covered California. I have never received a satisfactory explanation as to why. BCBS itself sells the exact same plan for the exact same price and, had we been fired, would have sold it to us directly without our needing to use the state exchange. If you think we don’t need the state exchanges the ACA created, because private companies will “just sell” you insurance because of course they’d want to, think again. Wishing doesn’t make it so.
  • We pay $657/month (without subsidy) for a BCBS Bronze PPO plan with an HSA. (An HSA is just a savings account into which pre-tax savings can be deposited. The annual maximum HSA contribution allowed by the IRS, for us, is just over $6,500. Many credit unions offer them.)
  • We have a high deductible plan with a $9,000 annual deductible that, in a normal, healthy, lucky year, we don’t nearly reach.
  • We do not carry dental or vision coverage. We pay out of pocket for annual cleanings and glasses, but we can use our HSA to do so.
  • Our 2015 income was not low enough to qualify us for a subsidy, but our 2016 income will be. We expect to realize some of the $657/month we’ve overpaid as a tax credit/refund for the 2016 tax year.
  • And remember, per the ACA, health insurance premiums for self-employed folks (us) and all dependents are fully deductible on our tax return. This another overlooked, underappreciated aspect of the ACA: It’s awesome for entrepreneurship and driving the growth of small business.
  • We would not have been able to stop working when we did (opening up our jobs for others to take, ahem) without the existence of the ACA. Period.
    • COBRA would have cost us $1,800/month.
    • Similar coverage from a private insurer prior to the enactment of the ACA (which we did look into a few years back, provided they would have actually sold it to us, which is not a given) would have cost almost the same, $1,600/month. Sure, we could work less and run through all of our savings pay for outrageously priced health care, but that’s not the sort of thinking that got us to FIRE, and it sure wouldn’t keep us here for as long as we’d like.
  • The cost of private insurance is only one aspect of this story. The other is about cost control, another woefully underappreciated aspect of the ACA. Insurance premiums go up, right? They rose every single year of our lives, long before the ACA, they rose a little bit this year, and they will rise next year. But! Thanks to the ACA, we are protected from these rises because subsidies rise to cover the difference. As Doom points out, “With private insurance, there is no such guarantee. You are at the mercy of the insurers. If we felt we had to save enough to indefinitely cover indefinitely rising health care costs, we might have been indefinitely working.” Yep.
    • This is just one reason why politicians’ servitude to corporations and their lobbyists is problematic. Corporations want us beholden to and dependent upon them for health insurance. Think about it. These days, health insurance is one of, if not the only, significant advantages they offer over working for yourself. Large corporations have broken the social contract in every other conceivable way: 1) At-will employment means you can be fired at any time for any reason (“or no reason,” as employment paperwork says), so long term employment stability isn’t a perk; 2) They offer no pensions, so you have no incentive to be loyal; 3) They dodge overtime pay laws, etc. etc. Health insurance is all they’ve got to offer, so it stands to reason that corporations would be pretty pissed off at the chinks the ACA made in this last-gasp armor. Their bought-and-paid for representatives have behaved according to plan.
  • In short, the ACA was a key enabler to us finally being able to realize our early retirement and self-employment plans. It’s not perfect, but it’s good, doable, and getting better every year, not worse. This year brought more doctor choices and such, things that made our plan easier to use and more beneficial. Any new product, whether it’s software or a Tesla, a new restaurant or health insurance, tends to improve after its initial release.

In order to continue to not work or, rather, to work less and about as much as we want (this year, that was about 50 hours/month between the two of us) and live frugally (on our usual $32-34,000/year in San Francisco), my husband and I need affordable health care.

President-Elect Trump has promised to “repeal and replace” the ACA, he will be able to do it, and it could really mess up the lives that we have worked very hard to, and been disciplined about, creating. Look. Living on 25-50% of what you make every year, forever, requires at least some discipline and lots of careful, daily choices, even when it’s a solid habit. Having a side job when you’re working 60+ hours week and in grad school part time, just to save a little extra,  doesn’t feel like a real sensible choice when you feel like you could gladly sleep for a year.

But my husband and I chose that. We chose not to buy a LOT of things. And then we chose this. And because this is the U.S., we have this basic, fundamental, possibly archaic and idealistic belief that we should have the basic freedom to live life as we choose. It’s that whole life, liberty, and pursuit of happiness thing. For us, freedom and corporate employment are at odds. Indeed, they are mutually exclusive conditions. We did it, and now we’re done. We hate working in offices. It’s not the President’s job to force us, even indirectly, to work for corporations like his own or those of his kids and friends.

Depending on what actually happens, we’ll probably try to at least stay self-employed, find some sort of coverage, and just work more (an exercise in futility when you don’t NEED to, and would really rather have the work go to other people who do need it, but since our politicians want to create nonsense land now…).

But I digress.

By virtue of living in San Francisco, California, we may have some other options.

California Dreaming

California has a few things going for it, ACA or not:

  • California has the largest economy in the U.S. and the sixth largest in the world. Yes, our state economy is larger than that of most countries. Given this, there is technically no reason we could not have something like Mass Health: Covered California, our state exchange, could provide the foundation for a state-wide health care plan.
    • Note: Starting on Nov. 9, I began to call and email both local and state representatives about this. They have assured me that it is not only possible, but already on their radar given Trump’s election win.
    • I’m not delusional. As it’s currently configured, California replacing federal subsidies would be a stretch, and a huge bite out of our state’s $122.5 billion general fund budget. It’s more likely that California would try to maintain access to coverage (the Covered California marketplace) and consumer protections (lifetime spending caps, fair prices for women, no discrimination based on pre-existing conditions).
    • But California has a strong incentive to have some sort of state-based plan, long term. Remember, people without health insurance are forced to seek care for free in emergency rooms, which are legally obligated to treat them. These hospitals pass the costs on to others, including insured patients, insurance companies and… the state itself.
  • We have Kaiser as a back stop. Kaiser is great for a lot of reasons, but I do not want it. Still, it beats having no health insurance at all. A monthly plan from Kaiser would cost exactly what we pay now, but offer much less. We would be bound to the Kaiser system, the out-of-state coverage sucks and is complicated (and I need out-of-state coverage, given the travel and type of work I do across state lines), and we would have to leave all our doctors and nurse practitioners of 10+ years, which we are loath to do (and do not feel we should be required to do, just because Republicans are feeling destructive).
  • Healthy San Francisco could make a comeback. The city of San Francisco offered universal health care to its residents in the form of Healthy San Francisco, for years before the ACA and Covered California. Since Covered California launched, people who were in Healthy San Francisco and eligible had to get coverage via Covered California instead. Healthy San Francisco still exists, though, for very poor people. Local representatives have assured me that Healthy San Francisco could, if necessary, be spun up to its former glory once again. For what it’s worth, Healthy San Francisco was very well regarded by those who were on it.

Aside: I Miss Old-School Republicans

It’s a pity that Mitt Romney does not take greater credit for all the lives he has saved via Mass Health, the state health plan in Massachusetts. If I were you, Mitt, I’d be singing those saved-life stories from the rooftops (and, to Republicans, would point out how many folks were still able to work and not dependent on taxpayer support because their health problems were treated and controlled).

If Romney had owned that success and the Republicans had taken it up as a mantle of their own, I think the GOP of today would be a completely different party, and one with much broader support and a lot less crazy.

Today’s Republican party, by contrast, no longer even pretends to represent the interests of fiscal sanity, small business owners, entrepreneurs, or folks who actually did what the GOP (used to) say to do. Many Mustachian types have struggled, worked intensely, lived very frugally, and saved our money. Now, however, the Republican party represents large corporations and only certain kinds of wealthy folks: They’ve disowned and shunned the millionaires next door in favor of Wall St. financiers and debt-dependent types like Trump and his ilk. With over $1 million to our names, a paid-off house, and self-employment income still coming in, we consider ourselves well off, but today’s GOP does not.

I miss that old school Republican party, I genuinely do. I’ve been a registered Independent most of my life, aside from a few party-specific registrations required in some states in order to vote in primaries. As a woman with more than a lick of sense, I have voted Democrat much of the time, but not always, especially 15 or so years ago.

In local and state elections at least, I loved that it was often difficult to decide who deserved my vote. Once upon a time, it wasn’t unusual for one or more parties to have one or more really solid, compelling candidates on the ballot, and sometimes I voted Republican. Prior to the great dissolution of actual small government values brought on by Bush II, 9/11, FISA, Homeland Security, and the TSA (I’m still WTF about all that), the Republicans were often strong on privacy and against surveillance; strong on education and unafraid to look and speak intelligently in public (something about a thousand points of light in here); as hunters and farmers, strong on the health of the Great Lakes, wilderness areas, and many aspects of the EPA (I worked on Superfund projects that had tremendous Republican support, for instance); and myriad other things.

It’s not for me to decide what the hell happened to Republicans. I am only sorry it has. They’ve cast their lot.

 

 

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5 thoughts on “ACA, Don’t Go Away: The ACA, FIRE, and Uncertainty

  1. I hate to burst your bubble here, the ACA works for folks like you, married healthy people without children but for the vast majority of other people, people such as myself, married with two small children, and a child who has a medical condition that requires a lot of follow up care, the ACA is almost useless. All of the ‘cost savings’ you talk about, that is money taken away from patient care, patient care is rationed. Doctors and hospitals can deny claims at will based on the smallest of non-conforming item (even plans with big deductibles). And it’s not the doctor’s fault, I have great doctors for my children but if they can’t get reimbursement they can’t offer the treatment the patients need. My pediatrician told me that the ACA basically rendered all coverage to be catastrophic coverage, which is the kind you and your husband have, high deductible, affordable monthly plan, which you rarely need to access because you are healthy (and the idea here is from now until you turn 65, you hope to remain so, because the really good coverage comes on with medicare). Many families with children have children who need good coverage, all the time, not some of the time. My pediatrician has patients who have cancer, who cannot follow ‘conventional treatment protocol’ for even the most common cold. They cannot take conventional vaccines provided for free by the state, they cannot do a lot things an otherwise healthy child could do. This is all money out of the parents pockets.
    I have had doctors reject the policy purchased on Covered Ca. exchange but will accept the one purchased privately because the ACA bureaucracy for reimbursement is so messy and it requires much more office manpower to process these claims (translates to higher wage costs) – this is illegal by the way, but they work out a ‘cash plan’ with patients so that they end up paying almost the same anyways.
    And you mention California will almost always have some form of ACA so we are covered, but it’s a form of rationed care, my son, who has a heart condition may not be able to get the best treatment he can get because of ACA won’t cover it so I have to pay out of pocket and if I can’t I am stuck with what they can offer, which may delay his recovery or he could end up with permanent heart conditions which could have recovered had the best treatment been available to us (without bankrupting us), his condition, if managed correctly can fully recover. Also, many insurance companies have exited the ACA (Covered Ca.) market because of non-feasibility, UnitedHealthCare, Aetna are some, which used to offer really good coverage. Now we are stuck with Blue Cross/Blue Shield/Kaiser and other smaller companies, the companies who are willing to lower the standard of care. To get good coverage, we would have to work for big corporations who offer good group plans.
    Sorry for the long comment, but there are many sides to ACA, some of it is very good and necessary but it’s proven to be unsustainable (told to me by many doctors and health care providers) and care is being rationed and most of the plans are now considered catastrophic, which won’t work for families like us who have kids that need to visit the doctors often.

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  2. I believe it. The ACA is not a panacea, but for us it’s better than nothing. Most of my family lives in either the UK, Poland, or elsewhere in Europe now, and I want true, nationalized, single-payer health care. We should expand Medicare and be done with it.

    Also, please don’t assume we’re perfectly healthy or have always been perfectly healthy (nope). Even those of us who are, for now, OK are — like all human beings — temporarily abled, at best. This is why Medicare matters, which the Republicans are also seeking to privatize, de-fund, and destroy.

    As for the ACA and Covered California, it seems everyone I know (from terminally ill to in their 20s and perfectly healthy; from people who were diagnosed with HIV in the 1980s; from folks with kids to not; and on and on) has had widely varying experiences on Covered California plans. If I were a reporter with a lot of institutional support, I would set out to find out why that is. From the limited anecdata I have, there are three distinct factors: 1) the ACA itself (by this I mean the law, not any health insurance plans); 2) how states implemented the ACA laws; 3) how insurers have chosen to participate, through the plans they offer and what they charge, over which they have tremendous control (and are still astoundingly, shamelessly profitable).

    We know, for example, several married couples with between one and four small children, as well as several families with older kids (10-18+), all of whom have at least one child with a medical condition (a couple of them exceedingly rare conditions that require experts). They require a lot of ongoing and follow-up care. And they’ve loved the ACA. Like us, many people may have had coverage from their employers, but it wasn’t necessarily high quality or fully covered by the employer. At my last position, for example, my share of having my husband on my employer’s plan (not including what my employer also paid) cost us almost as much as our Covered CA plan does for both of us now, and this was not unusual.

    Prior to the ACA’s passage, our friends’ older children (with lifelong illnesses and/or disabilities) would have been kicked off of their parents’ healthcare, denied coverage later as adults due to pre-existing conditions, or — in many cases — did not have any insurance at all and went bankrupt.

    When you write that “Doctors and hospitals can deny claims at will based on the smallest of non-conforming item (even plans with big deductibles),” I think you probably meant insurers. Doctors and hospitals don’t approve or deny claims, but file them.

    “And it’s not the doctor’s fault, I have great doctors for my children but if they can’t get reimbursement they can’t offer the treatment the patients need. My pediatrician told me that the ACA basically rendered all coverage to be catastrophic coverage, which is the kind you and your husband have, high deductible, affordable monthly plan, which you rarely need to access because you are healthy (and the idea here is from now until you turn 65, you hope to remain so, because the really good coverage comes on with medicare).”

    Our coverage is better than catastrophic, which I had in the past on several occasions. Basic things are at least covered: an annual physical exam, the flu vaccine, etc.

    A close friend of ours is a pediatrician who has owned her own practice for two decades. She has described some of the same things as your doctor, but said her practice had the same problems long before the ACA came into existence. In her opinion, the insurance companies have used the ACA as their latest excuse for the bad behavior she’s watched for years, which is to pay as little as possible to doctors for claims, so that they can make as much money as possible.

    For each doctor on staff, she requires 3-4 support staff, because of the insurance companies. For 20 years, they’ve refused claims for more and more things, and they fight tooth and nail not to cover anything. (Why our policy makers do not care about what this costs doctors like my friend is beyond my comprehension).

    “I have had doctors reject the policy purchased on Covered Ca. exchange but will accept the one purchased privately because the ACA bureaucracy for reimbursement is so messy and it requires much more office manpower to process these claims (translates to higher wage costs) – this is illegal by the way, but they work out a ‘cash plan’ with patients so that they end up paying almost the same anyways.”

    I have had the same experience. Once this year, after calling in advance to ensure my plan was accepted, I stood at the doctor’s desk and they said “Oh, not the Covered California version!” and dropped my card, sneering, like a hot potato. (Makes me wonder how they’d treat someone on Medicaid.) They were the only doctor to do this. The rest of ours accept all Covered California plans and say they’re happy to and they, too. None of them have hired additional front office staff. In every other case, it’s the same 2-3 women we’ve known the past 10 years and that’s it.

    When I asked my pediatrician friend about it, she said she 1) it’s up to the doctor; she couldn’t personally imagine why a practice would not accept plans purchased on Covered California; 2) that she has not had to hire any additional office help to deal with it; and 3) that she had no greater problems with reimbursement, because nothing has changed about how it’s done. Covered California is only the marketplace. They sell us insurance and that’s it. After the purchase or plan renewal, everything else is handled directly through the insurer (in our case, BCBS). Doctors file claims directly with the insurer, per usual. It’s how much BCBS CHOOSES to cover and pay out, or pass on to the customer, that SEEMS to differ between plans based on how they were purchased (even though the plans have exactly the same name and PRICE on or off the marketplace). I marvel that this is legal.

    “And you mention California will almost always have some form of ACA so we are covered, but it’s a form of rationed care, my son, who has a heart condition may not be able to get the best treatment he can get because of ACA won’t cover it so I have to pay out of pocket and if I can’t I am stuck with what they can offer, which may delay his recovery or he could end up with permanent heart conditions which could have recovered had the best treatment been available to us (without bankrupting us), his condition, if managed correctly can fully recover. Also, many insurance companies have exited the ACA (Covered Ca.) market because of non-feasibility, UnitedHealthCare, Aetna are some, which used to offer really good coverage. Now we are stuck with Blue Cross/Blue Shield/Kaiser and other smaller companies, the companies who are willing to lower the standard of care. To get good coverage, we would have to work for big corporations who offer good group plans.”

    Well, that’s a big maybe. We may or may not always have ACA like laws, and/or some way to obtain health insurance (this was not the case for most of my life, for instance, and it could very easily go back to being that way). And I sympathize, believe me. My husband had a heart issue (and several other congenital heart issues) that plagued him throughout childhood and even young adulthood. They have, mercifully, seemed to abate in adulthood. I wish your son a full recovery even BETTER than my husband’s. 🙂 (It is, of course, a big reason we wanted my husband out of his insanely stressful corporate job. I thought it would kill him.)

    I have congenital spinal and muscle tissue problems with which I was born. Treatment of these has never, ever been covered. When I have flare-ups, I have to manage it completely without insurance and on my own. It was ever thus, though, and having employer coverage never helped me in that regard. We live in a country with health insurance, not health CARE.

    Anyway, I don’t know enough about the details of the ACA law to understand how it (vs. an insurance company) would determine what kind of care your son receives. That seems like it would be up to the insurance company, what doctors they choose to have in their networks, and what they agree to reimburse, or not.

    I think I may also not be clear on what “rationed care” means in a post-ACA world. Healthcare rationing at least used to mean a few things: 1) That access to private health insurance was rationed based on price and ability to pay, i.e. people who could not afford a health insurance policy couldn’t get one (which the ACA law attempted to solve through state exchanges); 2) When insurance companies pre-screened applicants for pre-existing medical conditions and either wouldn’t sell a policy or made that person’s plan more expensive based on pre-existing conditions. How is care rationed in a post-ACA context (since the ACA was designed to alleviate these earlier types of rationing)? (I mean this genuinely; I literally just do not know enough to know how an insurance company could ration care, but then, I have never worked at one).

    I too have heard that companies are exiting the marketplace but, again, I always wonder what they mean by “feasible.” When I see how much money they make, I’m skeptical of their statements. They make so, so much money. Is it making just a little less that’s not “feasible” to them? Based on profits, I suspect it is feasible, but not what they want.

    And, to be fair, this is because they are for-profit, often shareholder owned companies. They are supposed to MAKE profit for shareholders. Their incentives are not to insure everyone, or bring everybody health care — of course not. This is why we need some sort of national health care system, with the incentive to ENSURE coverage for citizens, not profits for companies. If I could buy my way into Medicare today, I would, and it should be allowed.

    “Sorry for the long comment, but there are many sides to ACA, some of it is very good and necessary but it’s proven to be unsustainable (told to me by many doctors and health care providers) and care is being rationed and most of the plans are now considered catastrophic, which won’t work for families like us who have kids that need to visit the doctors often.”

    No apologies necessary! Thank you for taking the time to write it. I really wish I had more insight as to the vast disparities and varieties of experience on these plans, even in a single state. Ultimately, I hope California implements something like Mass Health, which is considered the best in the nation besides Medicare. I wish you and your son the absolute best care and health outcomes.

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    1. Thanks for replying 🙂 this is a major issue and bugbear for many people. And thank you for your well wishes for my son, he’s only 3, every doctor I’ve been to says little kids bounce back with good care, and since his illness begun in late Sept., he’s almost been my only focus, to make sure he’s well. This brings on another level of guilt because I have another daughter who is 5 and needs my attention too and I am trying to balance the needs of both of them. So thank you for your well wishes and I am glad you guys are FIRE and you got your husband out of that corporate job. Your FIRE situation and how you got there inspires me…and it gives something to aim for.
      Firstly, yes, I mean insurance companies can deny claims for the smallest for issues not doctors/hospitals, my error.
      I also know that experience varies, the doctors I know haven’t had to hire extra staff per se, but the existing staff needs to put in more hours just doing paperwork instead being patient focused and they don’t like that. You are in SF, I am in OC, I am not sure if it’s a regional thing where in SF things just go smoother, but anecdotally, I hear many many horror stories of ACA and how in one year their preferred doctor is in network but next year they aren’t because insurance reimbursement is too low. Several of our local hospitals merged or one bought out the other and the ones that got bought became out of network. And some of our local ‘well respected, well regarded, prestigious’ hospitals have gone after parents relentlessly for payment when insurance companies denied their claims. And I mean relentless.
      I agree with you, we need a nationalized plan, end of story. Health insurance should not be an area of profit especially not where they depend on the healthy to subsidize the ill. The biggest problem with ACA is insurance companies still hold the cards, they still get to make the major decisions, when to enter/exit the state exchanges, they still get to charge as much as they ‘need’ to to remain solvent, which like you say, should be met with skepticism.
      “Rationed Care” as told to me by my son’s pediatrician is insurance companies are cutting back what they will and won’t cover. Because they are trying to ‘control’ costs to meet the cost guidelines of ACA (Which like you, I am unclear as to what they are), instead of making coverage more cost effective and streamlined, they just withhold it or make the patient pay for it.
      The single best achievement if ACA is getting rid of preexisting conditions and kicking children off of parents plans because their children has chronic condition and allowing children to stay on parents plans until age 26, these are all vast improvements which we can’t deny. But ACA never addressed the cost side, which was the whole point of this legislation, to control the cost of health care and extend coverage to everyone.
      As for group plans, the last one I was on, where I covered all 4 of us including my husband, I had to pay a lot a month, and you are right, they don’t cover ‘everything’; BUT and this a big but, they do cover what they say they will cover and reimburse providers in a timely manner, they are less likely to deny claims, which the same cannot be said for individual plans bought on ACA. Why this is, I don’t know…
      ‘Feasible’ means exactly what you said, they don’t meet the profits they want, and this is the troubling part; people’s health is not for profit.

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  3. Thanks for this. As someone who hopes to FIRE within the next four years, the likely demise of the ACA (and maybe even Medicare) is a catastrophic setback. Like you, I’m hoping that my blue state will enact some sort of solution on its own if need be. But if that doesn’t happen, I may end up having to work indefinitely, not because I need the money, but just so I can be sure my family will be able to see a doctor if we meet with some disaster.

    Obamacare wasn’t a perfect solution, but it’s the biggest step that this country has taken toward universal healthcare in decades. There were lots of ways it could have been tweaked or improved, and if we’d had a sensible opposition party, some of those improvements might have come to pass. Instead, the GOP has done nothing for the past eight years but try to wreck it, and it appears the voters have decided to reward them for that.

    It’s outrageous that the US is the only wealthy, industrialized country in the world where we haven’t solved the problem of access to health care. It’s even more infuriating that the Republican party has made it their mission to *stop* this problem from being solved. They used to stand for principles I could understand, even when I disagreed with them to one degree or another. Now it seems the only thing they stand for is cruelty for the sake of cruelty.

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