LifeAfterDx--Diabetes Uncensored

A internet journal from one of the first T1 Diabetics to use continuous glucose monitoring. Copyright 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016

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Location: New Mexico, United States

Hi! I’m William “Lee” Dubois (called either Wil or Lee, depending what part of the internet you’re on). I’m a diabetes columnist and the author of four books about diabetes that have collectively won 16 national and international book awards. (Hey, if you can’t brag about yourself on your own blog, where can you??) I have the great good fortune to pen the edgy Dear Abby-style advice column every Saturday at Diabetes Mine; write the Diabetes Simplified column for dLife; and am one of the ShareCare diabetes experts. My work also appears in Diabetic Living and Diabetes Self-Management magazines. In addition to writing, I’ve spent the last half-dozen years running the diabetes education program for a rural non-profit clinic in the mountains of New Mexico. Don’t worry, I’ll get some rest after the cure. LifeAfterDx is my personal home base, where I get to say what and how I feel about diabetes and… you know… life, free from the red pens of editors (all of whom I adore, of course!).

Saturday, October 12, 2013

Hey brother, can you spare a dime?

There was a green piece of paper stapled to my pay stub. Never a good sign. Well, I thought, at least it isn’t pink. Yes, my job was safe—it was my health insurance that got laid off. The green note told me that the company’s health insurance, which has gone up by leaps and bounds over the last few years, was set to go up another whopping 25% next year, and my employer was throwing in the towel. They can’t stay in business and provide us health insurance.

I was cast upon the Exchange.

OK. I can do this.

The first stop, recommended by my employer, was the Kaiser Family Foundation, where they have an online calculator that estimates what a plan will cost based on your age, family size, income, location, and what not. It also estimates how much help you might get in paying the tab. As a reminder, the law requires all of us to get insurance, but lower income folks are supposed to get a subsidy to help pay the tab.

So I entered my state, my zip, what I thought my income was last year, the fact that my employer kicked my insurance to the curb, the number of people in my family, my age, my wife’s age (her real one, not the one she tells everyone), admitted I was a tobacco user, logged one living child, and confirmed that HE was not a tobacco user—no shit, it asks—then pressed the submit button.

One second later I had the answer.

Two seconds later I thought that there must have been some kind of mistake.

Because my estimated premium for health insurance was 19.7% of my annual pre-tax income. Maybe. Actually, it might be a lot more. There was a little note that said “In most states, insurers can charge a tobacco surcharge of up to 50% of your total premium.” It went on to say that any subsidy I got could not be applied to this surcharge. So that raises the base premium to 29.62% of my gross income. For those of you not of a business bent of mind, gross income is my pre-tax income, not what I get to “take home.” This means the premium would take an even bigger bite out of the household budget than it looks like it would. And it gets worse. About half my income is from various forms of self-employment, all of which are not only taxed at a higher rate, but we self-employed folks pay both the employer and employee share of social security taxes, reducing our take-home pay by 13.3% before we even get to the income taxes. (Don’t freak out, in your state the health plans may be cheaper, and if so, I may have to migrate there).

All of that combined means there is no fucking way I can afford to pay for health insurance. Literally. When the bills are paid, there ain’t much left. This premium would require a hair over a third of my take-home pay, and like most Americans, I’m juggling bills and living paycheck to paycheck.

Right now I’m very spoiled. I have awesome Canadian-style insurance that I only paid like $45 a month for. Of course my pay is low, but I always viewed good insurance as the counter balance for that. So I checked in with my boss, Hey, these exchange premiums are really insane. Will the company be helping me out with them in some way?” The response? “We cannot legally supplement premium costs for those on the exchange.” Followed up with, “I am sorry about all this—the aches and pains of the Affordable Care Act will take several years to resolve, and your situation is one that will be painful while it does.”

Ya think? Well, I’m sorry too. I work seven fucking days a week to help people with diabetes be healthy and I can’t even afford health insurance? It’s bitterly ironic. It would be funny if my life weren’t in the balance.

But wait, what about that subsidy? The help I’m supposed to get from the government. Won’t that knock something off the tab? Yes. And in my particular circumstance they will pick up 55% of the non-tobacco share of the premium. (OK, I could give up my evening cigar, but I have to be smoke-free for something like five years before I don’t have to pay the surcharge.) That subsidy sounds generous on the surface, but it’s not nearly enough to make this workable. The premiums would still be a budget-busting check what would exceed 23% of my monthly take home pay every month, a premium/surcharge check that surely would bounce if I had the courage to write it. But let’s say we lived without electricity, heat, and running water and gave nearly a quarter of my take-home pay to the local insurance company. How well would my new insurance cover my health needs?

About one quarter short of a dollar.

All the estimates the calculator gave me are based on the “Silver” plan. For those of you who don’t know yet, all exchange plans come in four flavors: Bronze, Silver, Gold, and Platinum. The only difference is in how much you pay out of pocket vs. how much the plan pays for covered services (what is covered and isn’t covered is as much a mystery as ever). The percentage covered by the plan ranges from 60% for bronze to 90% at the Platinum. Of course, to get Platinum coverage you need to pay a Platinum Premium. 

Anyway, at my estimated Silver level I would need to pick up 30% of my doctors visits, lab tests, imaging, and prescriptions. Frankly, that’s the one that scares me shitless. Thirty percent of the cost of a vial of rapid-acting insulin is $49.46. Thirty percent of a vial of basal insulin is $56.99. Thirty percent of a pair of Victoza pens is $102.73. Thirty percent of a month’s supply of test strips is $54.00. Altogether that’s $263.18. And we haven’t even gotten started. How well will durable medical goods will be covered? How much will my CGM sensors cost me? And if I decided to go back on a pump, the total medical costs would exceed my income! Well. Actually, they won’t. After all, there is an out-of-pocket limit.

Of $12,700 a year.

If you work the math, and please don’t, in my case when I add my premium, surcharge, and my maxed-out out-of-pocket expenses, it works out to something like 51% of my income. My pre-tax income.

Oh, and I also have to pay for 30% of mental health and substance abuse treatment, both of which I’m thinking I’m going to need real soon.

So what’s my option? I can choose to opt out and pay a fine. Next year it will be 1% of my income. The year after that it would be 2%. Sounds like I can opt out for a long time before I’m paying fines of 51% of my income. Would I be better off paying the fine and putting that money towards my meds and gear? Yes. Unless I ended up in the hospital for some reason, get run over by a truck, fell out of a plane, get cancer, or whatever.

What triple sucks is that I’ve always been a supporter of this reform. I don’t mind paying more and getting less if we are moving forward as a society. And I’ve always believed that people who whined about the law were (a) bad citizens who don’t care about their fellow man or (b) unrealistic idiots who couldn’t see the handwriting on the wall. I’ve been saying all along that if you think your insurance is good, you haven’t used it; and If you think your insurance is stable, you haven’t talked to your employer recently.

During the debates the nay-Sayers wailed and gnashed their teeth about who would pay for “Obama Care.” No one asked the real question: Who will pay for doing nothing? The train was out of control. Double digit cost increases can only go on so long before the costs exceed all the money in the world.

I knew my coverage would be worse this winter, but I knew it was worse than bad for so many others right now. I was happy to move down the ladder a few rungs so the people down below could climb up a few. I also knew I’d be paying more for that worse insurance, but I was OK for that. We’re all in this together. It just never occurred to me that it would be quite literally unaffordable.

That rather than move down the ladder I would fall off of it.

Next time: Navigating the Exchange. Or trying to, anyway…


Anonymous Anonymous said...

Hi Wil, love your writings.

Yes, tuff times indeed. The real change though is that your employer has decided to save their money by not making a contribution for your health insurance. Do you know roughly what this was?


10:53 PM  
Anonymous Anonymous said...

I'm curious if the 19.7% figure already includes the tobacco surcharge, which seems like it would since you entered that information and got an actual quote. I'm also wondering about the 55% subsidy of the non-tobacco premium, seems like it should be higher based on what you included as your income and the estimator on the Kaiser Family Foundation website ( It would be more likely that you'd have to pay no more than 2% of your income for the non-tobacco part of the premium. Actually, if you're stated income is the entire household income for your family of 3, you might likely qualify for Medicaid coverage if you live in a state that has accepted Medicaid expansion.

$45 a month would be about 10% of an average full premium for individual coverage. Individual coverage can run about $5000 to $6000 a year. If you priced Family coverage, that runs about $12,000 to $18,000 a year. Either way, it sounds like you're getting either an okay price for individual coverage or a great price for family coverage on the exchange. It does suck that your employer dropped coverage, but it sounds like it was becoming unaffordable to them with or without Obamacare. There are small business tax credits that they might qualify for, or at the very least could share in the cost savings of dumping health insurance by paying out a bonus and/or raise - however they cannot connect it to reimbursing you for your premium, otherwise you might not be eligible for the subsidy through the exchange.

The individual Out-of-Pocket Max is actually $6,350 (it's $12,700 for the whole family) and includes copays, deductibles, and prescription costs. Note - prescription costs are not included towards the OOP Max for people with employer-based insurance who have self-funded plans until 2015.

Finally, even through a Silver Plan must have at least a 70% actuarial value, that doesn't mean a straight 70%/30% split - the coinsurance is likely to be 80%/20%, and the lower actuarial value is mostly because of the deductible, likely around $1,500. You may have more than one plan option at each level, so even through two plans are considered "Silver" they might have slightly different designs. You can also buy a cheaper "Bronze" plan (or a more expensive "Gold" plan) and apply the same subsidy which is based on "Silver".

As for the penalty, if buying health insurance costs you more than 8% of your income, you are exempt from the penalty for not having it.
Hope that helps.

4:08 PM  
Anonymous Anonymous said...

Here's the failure in your analysis. You didn't say what you'd be forced to pay getting health insurance on the private market prior to obamacare.

One has to ask whether you are reeling from the shock of having to pay for your own healthcare IN GENERAL, or if you are reeling from having to pay for obamacare specific coverage.

My guess? As a smoker and a diabetic, you probably wouldn't have been able to purchase a policy at all.

8:46 PM  
Anonymous Anonymous said...

I think anonymous needs to learn how to read a post, and can keep his or her judgmental crap about not needing insurance to his or her self.

7:19 PM  

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