How to Handle the Increased Costs We’ll All Pay Under ObamaCare
The Affordable Care Act, or as it’s now commonly called, ObamaCare, is changing how and what we all pay for health care. And when I use the word, “changing,” what I mean is “increasing.”
You see, when the Affordable Care Act says it’s “affordable,” it could be referring to the monthly premium cost of plans purchased on the exchange, the available subsidies, or perhaps its hoped for future result, but it is not referring to what it will cost you out of pocket today, should you become ill or get injured… because there’s no question about it… you and I are going to pay more out of our pockets going forward than ever before when we use our health plans.
The Affordable Care Act created out-of-pocket maximums to be established by the IRS. For 2014, they are $6,350 for an individual and $12,700 for a family. So, that means that we’ll all pay coinsurance, copays and deductibles up to those out-of-pocket limit amounts… $6,350 for an individual and $12,700 for a family.
And that’s a lot for most people. It’s also a whole lot more than we’ve had to pay out of our pockets for health care in the past.
So, yes… ObamaCare has made health insurance available to millions of Americans that couldn’t afford it before the new law went into effect. And yes, there are no more pre-existing conditions stopping people from getting coverage. And there are many other positive developments that the Affordable Care Act has created.
But, that doesn’t change the fact that many of us are seeing our health plan premiums increase, or that all of us aren’t going to have to pay more out of pocket when we’re ill or injured and need medical care, because those are both facts of life under ObamaCare.
So, I’ve found the answer. Or, I should say, my wife found it.
This year, my wife and I became what people often refer to as “empty nesters.” Personally, I hate that term… my daughter’s away at college, that’s all. I don’t like thinking about our home as any sort of “empty nest.” But, regardless, with our daughter away much of the year, my wife decided that she wanted to return to the workforce, and so she went out and got a job.
To be entirely candid, I didn’t pay much attention to what she was doing, and after a week or two passed, she asked me over dinner at our favorite sushi restaurant if I even knew that she was working. I replied that I knew she was going somewhere in the morning, but wasn’t entirely sure where… LOL.
She explained that she had taken a position working for AFLAC… you know… the insurance company with the duck in its television commercials that quacks when it says, “AFLAC!”
Now, my wife has never had any sort of sales position before… ever. In fact, I would have bet that she wouldn’t have any sort of sales job her whole life, but out of nowhere she was explaining all of the reasons she loves AFLAC and why she decided to go to work there. She was selling me on why Aflac was so great.
“AFLAC is the insurance company that pays you, not your medical providers,” she explained. “So, you get the check, and you can use the money to pay whatever you want… you could use it to pay your deductible, or you could use it to pay your car payment or your mortgage… it’s up to you.”
I said I thought that sounded great, and since she was still studying to get her insurance license, I told her I thought that was great too. In truth, I didn’t think she’d actually make it very long in sales, so just in case, I told her about the many different opportunities there are in the insurance industry.
And then we changed the subject, and went back to eating our raw fish and rice.
As the months passed, I realized that I had been wrong… she was really getting into the whole AFLAC thing. She got her insurance license, and soon was telling me about how she was about to enroll her first small group… and then it was another small group. She was following the AFLAC training to the letter and succeeding… and I was amazed. It had to be really good for my wife to be willing and able to sell it, I thought.
So, I started to look into it… AFLAC. Now, I know a lot about health insurance and managed care plans, having worked in that industry for many years, but I knew nothing about AFLAC, except that they offered some sort of supplemental disability insurance coverage… that was it. So, I was surprised to learn that AFLAC also offered other plans, like a hospital plan, an accident plan, a dental plan, a cancer plan… and a few others I can’t remember exactly at the moment.
I was learning about the AFLAC plans at right about the same time I was trying to figure out what ObamaCare was all about… and one day, while I was listening to my wife explain the benefits of the AFLAC hospital plan, the two things collided and I said to her, “Wait a second, I don’t think you’re explaining that the best way. What about the impact of ObamaCare?”
She wasn’t sure how to answer that, and neither was I, but I started looking closely at what the AFLAC hospital plan would provide and then I called a few friends in the health insurance industry to run my thoughts by them… I had to make sure what I was thinking was right.
And it was. The fact is that when a company with at least three employees offers AFLAC to its workforce, the employees can enroll in the AFLAC hospital plan, which for very little money (and by “very little” I’m talking about between $5 and $15 a week in California), would pick up something like HALF of the out-of-pocket maximum under the new ObamaCare limits of $6,350 for an individual, should the employee be hospitalized.
So, think about that for a minute. Let’s say your health insurance premium is $800 a month. If you end up in the hospital, chances are you’re going to be responsible for paying $6,350 of the bill. But, if you had AFLAC’s Hospital Advantage Plan, which would only cost you let’s say $50 a month and maybe less, AFLAC would be sending you a check for roughly half that amount… and potentially more.
So, in this example, you can pay $800 a month and have a bill for $6,350. Or $850… and the bill gets cut in half. And the truth is, most people are paying more than $800 a month for a family’s health insurance coverage… ours has gone up to $1,500 a month! So, an extra $20, $30, $40, $50 or even $60 a month is really nothing when you consider the difference having the extra coverage makes should you end up in the hospital.
It doesn’t cost companies a nickel to offer AFLAC to its employees… and all you need are three employees to qualify as an employer group. Not only that, but the employees can pay their premium payments with pre-tax dollars, which saves them even more, while the company saves on payroll taxes.
Then there’s AFLAC’s Cancer Plan, which can be purchased as an individual or offered by a company. It’s what I would consider cheap, as far as the monthly premiums go, and should you be diagnosed with prostate cancer, as in the example below, AFLAC would be sending you a check for roughly $7,760.
Maybe you’d use that money to pay your deductible, or maybe you’ve already met your deductible that year and you’d need it to cover your mortgage payment that month. It’s up to you how you spend the money you get from AFLAC.
Here are three simplified examples that my wife put together for me… of course, rates and plans vary, but this should give you the general idea.
EXAMPLE #1 ““ Heart Attack
Male Age 45 has a heart attack, which requires:
5 days in hospital X $2,000* = $10,000
Other services such as ambulance, physician visits, Angioplasty Surgery & Meds = $16,000
Estimated total cost of heart attack in this example = $26,000
(*Average daily hospital stay in a CA for-profit hospital = $2,000)
ObamaCare Bronze Plan Member Pays:
$5,000 deductible for medical & RX plus…
30% hospital co-pay after deductible is met.
$26,000 hospital bill – $5,000 deductible = $21,000 X 30% co-pay = $6,300. Then, $5,000 + $6,300 = $11,300, which exceeds the out-of-pocket maximum, so the insured only pays the out-of-pocket maximum of $6,350.)
Bronze member maximum out-of-pocket expense = $6,350.
AFLAC Hospital Preferred Plan Could be Expected to Pay:
$100 ambulance
$100 emergency room
$1,000 hospital stay
$100 per day in hospital X 5 = $500
$150 MRI
$750 angioplasty surgery
$75 ($25 per each of 3 follow-up doctor visits)
Total AFLAC Pays You = $2,675
In that example, AFLAC WOULD COVER APPROXIMATELY 42% OF YOUR BILL.**
** This is an estimate only.
EXAMPLE #2 ““ Auto Accident Injury
Female age 30 has an auto accident, which results in a broken leg, which requires:
2 days in hospital X $2,000* = $4,000
Other services such as ambulance, x-rays, physician visits, surgery & physical therapy = $11,000
Estimated total cost of a broken leg = $15,000
(*Average daily hospital stay in a CA for-profit hospital = $2,000)
ObamaCare Bronze Plan Member Pays:
$5,000 deductible for medical & RX plus…
30% hospital co-pay after deductible is met.
$5,000 ($15,000 – $5,000 deductible = $10,000 X 30% = $3,000)
Then $5,000 plus $3,000 = $8,000 which exceeds the out-of-pocket maximum, so the insured only pays the out-of-pocket maximum of $6,350.
AFLAC Accident2 Plan Could be Expected to Pay:
$200 ambulance
$1,000 hospital stay
$250 per day in hospital X 2 = $500
$25 x-ray
$900 surgery for broken leg.
$125 crutches
$210 ($35 per each of 6 follow-up doctor visits)
$350 ($35 each x 10 physical therapy visits)
Total AFLAC pays you = $3,310
In this example, AFLAC WOULD COVER APPROXIMATLELY 52% OF YOUR BILL**
** This is an estimate only.
EXAMPLE #3 ““ The AFLAC Premier Cancer Plan
Male Age 55 – diagnosed with prostate cancer.
Estimated total cost for treatment of prostate cancer = $10,584
ObamaCare Bronze Plan maximum out of pocket expense = $6,350
AFLAC Premier Cancer Plan pays: $7,600
In this example, AFLAC WOULD COVER APPROX 120% OF YOUR BILL**
** This is an estimate only.
OKAY, SO HERE’S WHAT I THINK…
Over 50 Million people worldwide have AFLAC coverage. And AFLAC pays claims fast, like in a few days.
You can buy an AFLAC plan as an individual or as a company. The minimum size to be a group plan is only three employees, and group plans mean lower premiums. And if you’re a small or larger business, offering AFLAC to your employees costs you nothing. It’s a voluntary benefit plan, so your employees decide whether they want it or not. You just set up the payroll deduction, and many plans are tax-deductible for both employees and employers.
But, think about it… if your employee ends up with a large hospital bill, how will they be at work as a result? Wouldn’t they be that much better if they received a check for half of it? I’ve been an employer for 20 years and I can tell you the answer is yes. And with out of pocket costs higher than ever before, shouldn’t you consider something that puts money into your pocket?
As it says on AFLAC’s Website:
“Though reform will have an impact on every American household, startling enough, most are not prepared for what lies ahead. Though it may not be keeping workers up at night yet, new research shows most don’t understand reform and many fear they’ll suddenly wake up and not be protected when it comes to benefits.”
“As companies consider changes to their benefit plans, and compliance with health care reform legislation, they should carefully consider the potential negative impact on employee productivity, engagement and job satisfaction metrics of simply shifting expenses to their workers.”
If you want more information about any of AFLAC’s plans, you can visit AFLAC.com, and of course, contact my wife, Stacey Andelman at:
stacey_andelman@us.aflac.com
If she can help you… great. But if she can’t, at least she can get you to someone who can.
AFLAC has been around a long time, but its value to millions of American is as new as ObamaCare. Now that we’re all going to have to pay more out of pocket, I urge most everyone to consider supplemental coverage through AFLAC before you end up with a much larger bill for medical care than you expected.
Health insurance is something you purchase hoping you won’t have to use it. But if you do, it becomes the best thing you’ve ever bought.
Mandelman out.