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I Just Got Screwed By Obamacare, the Sequel

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Obamacare

A few months ago I wrote a post that kicked off some discussion on the lovely topic of Obamacare. You can check the post out now if you like. We’ll forgive you for not reading it and will wait around for you to peruse it.

Back yet? Good. 🙂

For those who either didn’t read it or don’t remember reading it, I wrote about how our health insurance premiums rose by 24% for nothing. Call it Obamacare, the ACA or whatever you like, but much of the increase went back to it. I readily admit that the healthcare system as a whole plays a part, but let’s face it, the entire system is broken and the ACA just seems to make it worse.

Anyway, I’ve been spending the past few months looking for somewhat viable alternatives as a way to cut back on the increase. I realize this is a hotly debated political issue and tend to stay far from those here, but it’s my site and I’m going to go ahead and talk about it because I know darn well that we’re not the only family with this noose around our necks.

There Are Few Options Out There

 

As I pointed out in my earlier post, I went to healthcare.govto see what options there were for our family.

We’re a relatively healthy family. In fact, the only in office doctor’s visits we’ve had this year were for the little Frugal Rules’ to have their well-baby checkups. Thanks to Obamacare those are covered at no cost and for that I’m thankful. However, we could pay those out of pocket entirely and spend far less than what we are paying in annual insurance premiums. Unfortunately when I went to healthcare.gov there were no real affordable options for our healthy family. The “best” ones out there were several hundred dollars higher than our already messed up plan and thus not a true option in my opinion.

The other option that had been suggested by several readers, as well as some family friends, was a healthcare sharing ministry – like Medi-Share or Samaritan Ministries. Generally speaking, these are Christian based sharing ministries that seek to ease the burden of health insurance to those who are looking for it. Each has their own requirements so I won’t go into detail on those, but the point is they provide a viable alternative to some. The thing to point out with this type of situation though is that it’s not insurance but instead a means to share the burden of health care costs with other like-minded people.

After an exhaustive search the only two options for my family seems to be an expensive yet crappy insurance plan from the exchange or a healthcare sharing ministry. These are really the only viable alternatives for my family and are at opposite ends of the extreme.

The Catch

 

As a small business owner I’m constantly on the lookout for tax deductions. We get a number of things we can write off like the contributions to our SEPs and other business expenses. Our healthcare premiums fall into that category, so obviously I want to protect that if possible. Therein lies the rub. Healthcare sharing ministries are not insurance, but 501(c)(3) organizations, which means contributions do not qualify as premium payments.

Honestly, I wasn’t really surprised, but I am still disappointed as switching would mean losing that write off. We spoke with our tax person to see what savings we got last year to determine where the better value lies. Based off our 2013 return we saved $2,020 thanks to our healthcare premiums. We would need to save at least that much by switching to make it worthwhile.

After some basic research I found that we would likely be paying $405 per month with Samaritan Ministries – thus a savings of $164.82 per month or $1,977.84 over the year. So, it wouldn’t be worth it to switch.

The savings at Medi-Share would be better. They offer several options to choose from, with the highest we’d be looking at per month coming in at $273 – or a savings of $296.82 per month or $3,561.84 over a year. There is a possibility we could get a lower rate saving an additional $50 per month max, but I’d rather be conservative and go with the higher rate.

In plain numbers, we’d do better financially by going the Medi-Share route. The rub continues though.

The real kicker is that you can’t go with a healthcare sharing ministry and have a HSA account. Well, you can have one but you can’t make tax deductible contributions. We’ve not spoken with our tax guy to see what that would mean, but I’m not thinking it’ll be pretty. I’ve read in numerous places that there is a Bill in Congress right now that would allow for the two to be used together, but I have greater faith in our two year old suddenly becoming fluent in Portuguese than our do-nothing Congress passing something that would actually help us as Americans.

At A Crossroads Thanks to Obamacare

 

I can honestly say I don’t know what we’re going to do. Losing the HSA capability would hurt though we could mitigate it some. We’ve already maxed it out for the year and would have it there if need be if we moved out of insurance. We could also put aside what we were already going to be putting in it in future years to some sort of investment vehicle strictly for healthcare needs, but would likely still hurt from losing the tax deductibility aspect.

There were a number of things said in relation to my original post, and I’ve read them elsewhere as well. It’s the idea that you can “afford” it so stop complaining. I know it’s a First World problem as there are far too many out there without the basics they so vitally need. However, the affordability aspect is a moot one. I can also afford to go out and buy a brand new car, but I’m not going to. Just because I can afford something doesn’t mean I should have to buy it.

A few weeks ago we spoke with a good family friend who had the same exact provider we currently have. They were with them for three or four years, I can’t remember which, but each year they saw double digit increases without a change in coverage. I know that’s not really unique these days, but it concerns me what it’ll look like in another year or two if we continue with this same plan.

I know some have fared better under the move to Obamacare/ACA. For that I’m thankful. However, many more seem to be on the losing end of the stick. What makes the problem that much worse is that politicians on both sides of the aisle, as well as at State and Federal levels are to blame and are too busy pointing fingers as opposed to actually doing something that’ll help the struggling lower and middle class families have a little bit more in their budgets each month. The kicker to all of this…we’ll likely re-elect 90%+ of them next week.

 

What are you doing to lower your healthcare premiums? Are there any solutions you can think of to this situation? Were you positively or negatively impacted by Obamacare?

 

 

Photo courtesy of: William Ross

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I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to GoBankingRates, Investopedia, Lending Tree and more. If you're wanting to learn how to monetize your blog, check out my blog coaching services to see how I can help you take your site to the next level.

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50 Comments

  • I wonder how the numbers compare- the subset who’ve been helped by ACA and the subset who’ve been hurt (I know Holly from Club Thrifty has also had your issue). I know that for me and many of the people I know, it’s the first time we’ve ever been able to afford insurance.

    I think the healthcare system absolutely needs to be addressed though, so that we’re not insuring people so much at the expense of others.

  • Beanybopp says:

    Our family got screwed also. My husband’s work doesnt have family benefits so our son and I are out to dry so to speak. We have CHIP for our son which is a life saver…for me on the other hand, I went on the site to see what I could get and I just had to laugh! Ok if I could afford a $300 a month plan (90/10) I would have done it before all of this. I could get a $138 a month plan (70/30) but basically if anything happened I would be paying full co-pays as if I didnt have insurance and then have a HUGE bill (deductible) to pay if I ever needed to go to the hospital/surgery. Making affordable plans is a joke….most Americans are living pay check to pay check and to think that people have an extra $100+ a month for insurance that doesnt cover anything is just ridiculous! I save more if I just pay out of pocket without insurance at the eye doctor/dentist/etc vs paying over a $100 a month for a plan that doesnt cover basically anything, just would help me if I ever had to go to the hospital and all (big things).

    • John Schmoll says:

      Sorry to hear that Beanybopp. That’s exactly what I’m talking about. I’m sure, on one level, that the driving goal in the beginning was to provide something “affordable” for many but that simply has not been the end case. Our current coverage is bad fire insurance and the other options out there only go from bad to horribly worse.

  • Gretchen says:

    “I have greater faith in our two year old suddenly becoming fluent in Portuguese than our do-nothing Congress passing something that would actually help us as Americans” – this is how I’ve felt for a while now. While I used to have faith in our government, I just don’t any more. And what’s even sadder is even though the American people are supposed to maintain control over the government, we’ve lost that. It’s sad and depressing and can’t end well!

    • John Schmoll says:

      I could not agree more Gretchen. The crazy thing is we could have control if we wanted, but we give that up when we re-elect so many of the bozos who only end up doing the same thing. I think an argument could be made there about us sharing a good bit of the blame then… 😉

  • I am dreading the loss of our HSA when we start out Health Sharing Ministry plan in January. Fortunately, the funds in it will still be ours!
    I wish I had some answers for you, but there are none. You either need to join a health sharing ministry or bend over and grab your ankles.

    Also, prepare for an onslaught of comments from people who have free or almost-free insurance now and don’t understand how you could be complaining.

    • John Schmoll says:

      I love your honesty Holly as that’s exactly how I feel. I’m thankful we get to keep the funds in our HSA, though not happy about giving up the deductibility aspect of it.

      Oh, I know, I got some of those last time. But, I can “afford” it so that means I should be all good – right? 😉

  • This is just more “redistribution of wealth” garbage, and it ticks me off to see hardworking friends like you guys and the Johnsons getting screwed for being hard workers. So far, with Rick’s employer, we’ve been pretty lucky. So far.

    • John Schmoll says:

      I hear you Laurie. I know you guys are, but that’s something to be very thankful for. It makes me remember how “good” I had it with my previous employer with relatively good coverage. Those days are starting to be long behind us I fear.

  • Kassandra says:

    We were also screwed by the ACA policies and we decided to stop the financial bleed of the insane cost of our monthly premiums. As of October, this year, we went the Health Sharing Ministry route. The savings definitely make up for the lost tax deductions but losing the option of the HSA is a killjoy. The US healthcare system needs yet another overhaul.

    • John Schmoll says:

      Sorry to hear that Kassandra. But, that said, glad to hear you ended up going the HCSM route to save some money. I’m leaning heavily towards going that route for our family. That it does, though that would require some serious action by our government, which I highly doubt.

  • Amy says:

    I’m sorry to hear that this happened to you. Our entire healthcare system is broken, and needs a major overhaul. Personally, I think the greedy insurance companies play a very large role in the problem. (How do they keep their profits high under the ACA? Force people to pay more for premiums.)

    We’re lucky in that our coverage hasn’t increased in cost much lately, and our plan improved in a number of ways this year. While I certainly wouldn’t be happy if it went up a lot, I can’t help but think about all the people who’ve been uninsured and therefore receiving poor or no healthcare over the years, as well as the people who’ve had to declare bankruptcy because of overwhelming healthcare expenses. It feels to me like the rest of us have been enjoying our lower-cost insurance at their expense, and the (clearly imperfect) ACA is an attempt to inject some fairness into the system.

    • John Schmoll says:

      Oh, I agree Amy. The insurance companies do play a major role in this. The industry as a whole is messed up and needs major change. For example, why does a part which costs $300 (what’s needed for a hip replacement) cost over $30,000 to do the surgery for. I’m all for doctors and whomever else to make a profit but that’s just absolutely crazy.

      I understand Obamacare is an attempt to bring fairness…at least in the beginning it was. That said, it is doing anything but bringing fairness. More than doubling premiums for families is not “fair”. That’s also not to mention the fact that the only real choice consumers have is bad and worse.

  • I’m on my wife’s plan but when she was looking to go the solo route as well, we looked into the ACA. Hold crap was that an eye opener! I don’t think “affordable” should be included in the monthly cost! I think when it comes down to it, one of us will work for an employer to get our health insurance. There is no way I am paying a monthly premium that is close to $1k/month for 2 healthy adults.

    • John Schmoll says:

      I remember you saying that Jon. I completely understand why you’d not want to pay that much when you’re both relatively healthy. It’s just ridiculous that a couple would have to pay that much for basic coverage with nothing else going on.

  • This is a really sore issue in our home, and quite frankly a challenging one for me as a financial planner. When people ask me what concerns me about my clients more than anything, it’s the growing cost for healthcare and the challenge to even plan for it. We fortunately have our insurance through my husband’s school; however, I am concerned for the day that they will decide to not cover families because the costs are just too high. Something really does need to change, healthcare inflation is just not sustainable, especially when wage inflation is non-existent.

    • John Schmoll says:

      Oh, I can only imagine that you deal with this as a planner. I’d hate to know the number of individuals and families who are seeing their goals being impacted by something like insurance -especially when they’re healthy. Excellent point on the lack of wage inflation. If I were making 24% more per hour over night then maybe I’d be ok with it, but that’s certainly not the case.

  • You aren’t alone in facing higher expenses. I think a lot of people (yourself, Holly, etc.) make too much to benefit from any sort of subsidy, so you are essentially stuck paying the full price.

    I feel it’s important for me to quickly say I work for a health insurance company and these opinions are solely mine.

    Even employer sponsored plans have gone up quite a bit. I took the highest premium plan because my wife and I have medical issues that have caused us to max out our insurance, but the deductible and out of pocket max are still relatively high – and that’s with our employer pitching in a lot of money (employers pitch in a lot more than people think imo).

    With having no employer giving money towards individual/self-employed plans, combined with higher health care bills overall (mainly cancer and other pre-existing conditions that insurers used to be able to reject), I’m not surprised at all that insurance is so expensive now. It’s really all priced through models so there is little anyone involved can do about it unless someone makes a miracle cancer drug that can cure cancer. That’s where most of the costs are, and I think it’s money well spent right now.

    Kind of rambled and didn’t really respond to your question haha but I tend to do that on health care posts.

    • John Schmoll says:

      Yea, we’re out of bounds in terms of the subsidy so we’re stuck.

      I know many employer plans have gone up and was always amazed at how much many covered for their employees in the first place. The sad fact, in my opinion, is that more and more employers are only going to push this to the employee to deal with on their own – much like the shift from pension to 401k. The end result will only turn into more dealing with this and being pinched even more in their budget.

  • Michelle says:

    This is something we have been struggling with. We just received a letter saying that our health insurance will increase by 69% next year, which is a CRAZY amount. Especially since our deductible is $12,700 a year.

  • I get insurance through my provider, and I have to admit that it’s a good plan – even if the whole in network / out of network thing drives me nuts. I went to my state’s exchange website and couldn’t find one that was even close to what I get through my employer. That being said, we had huge jumps in our premiums….why? Well, my employer – due to the ACA or as I call it the Forced Purchase Health Care, Don’t Worry If you Can’t Afford It The Middle Class Will Pay For It Act – now being forced to provide insurance to more employees were forced to raise everyone’s rate. Thanks Obamacare!

  • Grayson Bell says:

    I’m sorry to hear this my friend. Just looks like another way small business owners get screwed for being successful. You get no breaks and everything is just up against you.

  • What are you doing to lower your healthcare premiums?
    > We moved to Canada in 2009.
    Are there any solutions you can think of to this situation?
    > Yes–a single-payer, universal healthcare system
    Were you positively or negatively impacted by Obamacare
    > No affect on us. 🙂

  • Sorry to hear this. I’m glad you and Holly have opened my eyes as well as other readers to the affect of the new ACA/Obamacare policies. We haven’t heard much about it in the mainstream media. My employer provides health insurance, and while the premiums have increased a decent amount recently, it’s not as bad as those who are self-employed.

    • John Schmoll says:

      Not a problem Andrew. While it has done good things, it certainly has its issues. When a healthy family pays more for their health coverage needs than they do their mortgage something is plain messed up.

  • I agree that this situation sucks for many, but I’m sure the people who now have healthcare are very grateful for it. I’m at the point where I would almost prefer for healthcare to go into the tax system, like the education system, so that it’s being paid for, but we don’t have to feel the hit every month.

    • John Schmoll says:

      There have been some very good things come out of it, though it comes with a hefty cost to many others as well. I’m all for looking at something different. No system is perfect, but I’d jump at what is available in Canada or some of the European plans

  • My insurance is going up by $52 dollars Jan 1st, so I’m looking for a new plan, either outside of cigna who I’m currently with or a cheaper plan with cigna. what a pain!!! Can I blame it on OC…hard to say, because way before OC I was with blue cross and they would raise my premium by a lot at random. Either way, it’s one of the HUGE downsides of working for yourself. 🙁

  • Our family wasn’t overly affected by Obama Care because Chris works for a large company and we have healthcare insurance through him. And I am incredibly grateful for that benefit as I know many people are not so fortunate. And I agree – the worst part is that both parties just point fingers and blame one another, rather than work together and find a real solution. There are people out here hurting because they won’t work together and it’s just sad. And frustrating, because you’re right – most will get reelected too. Ugh.

  • PAUL LATTA says:

    John,
    I hear you, man. Currently without coverage. I think it’s unconstitutional that the government is forcing us to buy a service. It’s really no different than say forcing everyone to buy a gym membership.

    I worked as a nurse for 22 years. Most of my health issues are a result of that career. Heck, I should get 100% free coverage for life.

    Currently, I’m making a go of it by living off my meager investments and selling stuff on EBay.

    Health care should be free.

    • John Schmoll says:

      Sorry to hear that Paul, especially considering your health issues were largely caused by working as a nurse. Something has got to get better, though I’m not too terribly hopeful. Thanks for stopping by.

  • Tre says:

    I negotiate the policy for my employer. We have seen premium increases over 20% since Obamacare was introduced. It’s not much better than the individual market. The current system isn’t sustainable.

  • Kim says:

    It does kind of make it appealing to just stop trying to make money. I see pros and cons with Obamacare, and I don’t think anyone should be denied health care because they are poor or have pre-existing conditions, but it drives me nuts that people can do nothing and get free health care. At the very least, it should be some sort of sliding scale.

    • John Schmoll says:

      I feel the same way Kim. I know earning less isn’t an option for us, though it’s good to know that if we made nothing we could possibly get “affordable” coverage. 😉

  • Ginger says:

    Interestingly my employer’s cost did not go up, even with changing from a grandfathered plan to a ACA plan (aka as of the first my OB visits and birth control do not have a copay) but part of that was that my employer already had preventive care visits for children without a copay and that would have been an increase. But, even more interestingly is that they increased the portion the employees are paying. They used to cover the employee 90%, now it is 88% and families 75%, now 73%.
    I really think ACA has helped many people, who could not get insurance they needed and that the 80% must be treatments helped keep the cost down, but I think many people have no idea how expensive health insurance really is and that is where the disconnect is. Coming from having to COBRA at 25, and paying over $500 for myself has made me expect the cost to be this high, but for others they always had subsidies from their employer or were so healthy the insurance companies were willing to take them. Now, we have “employer plans” on the open market and it is a shock for many people.

    • John Schmoll says:

      I remember how much my previous employer covered and knew it was pretty substantial. I got to see that even more when I had to go on COBRA for several months after leaving them so I completely understand where you’re coming from with that.

      I know ACA has helped some, though many have also been impacted negatively. That said, you’re exactly right – many are in sticker shock. I just hope few to none have to choose between it and something else they need.

  • Michelle says:

    My sister works at a school district and she hasn’t had to pay for insurance. This year, they have to start paying because of all of the changes.

  • Katie says:

    Our health insurance for my husband and one year old is going from $150 a month for the cheapest highest deductible plan to $340 a month for the same, yet with a higher deductible of $12,600 a year. My husband has never seen a doctor since his required physicals in school, years ago. The frustrating thing is that I get coverage through my work on just myself for health insurance, so even though my family makes less than $50,000 a year gross, we still are unable to receive a subsidy. The tables they show say that if you make under like $74,000 for a family of three, you can get a tax credit, but because I am not ensuring myself on that plan I do not count. The only reason I stay on my health insurance through work is that I have a lower deductible and they provide an HSA which I will definitely need with my upcoming 2nd child’s birth, otherwise I would go off of the plan because my employer even offered to pay me a little more if I went off their plan because I would save them so much money! I also have two separate deductibles to meet which is a pain in the butt! lol Gotta love the government!

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