I’ve spoken before about the ‘Affordable’ Care Act, better known as ‘Obamacare’. As you might remember I wasn’t too keen on it, especially citing the fact that I don’t utilize medical services very often.
Well, a few months ago, right before Tekkoshocon 2014, I suffered a pretty good medical scare. At first we thought I had an about-to-rupture appendix, but it turned out to be a kidney stone (umm, yay?). I have discovered that a 3mm stone trying to pass through the 1mm wide passageway between the kidney and the bladder is incredibly painful. Painful enough that I, who gets regularly praised for my high pain tolerance, finally agreed to let my wife take me to the hospital (of course remember that I thought I was suffering appendicitis).
She was *very* convincing.
So we’ve gotten the bills for the doctor, the ER, the Urologist, the lab, the lab technician, the pharmacy, and everything else I got billed for (at least I didn’t get charge for a $20 can of soda, this time, like when I had Strep Throat).
All in all, I was looking at about $8,000.
Yeah, I’ll give you a second to take the number into consideration for a three-hour ER. I wasn’t admitted and put in a bed for the night, I didn’t have any surgery performed, they just ran some tests and said, “Yup, it’ll pass in a few days. Here’s a ‘scrip for pain and here’s a ‘scrip for nausea. ‘Bye.”
So…GTFO and pay me eight grand.
Now here’s the issue I had with Obamacare before: I could pay $120 a month to get a Bronze plan that covers 60% of my bills…after a $5,500 deductible.
Now, a few things have changed since I last made a post about Obamacare. My wife is no longer working, so our income is lower. Our household now qualifies for the tax credit to lower the marketplace insurance cost. That same $120 plan is now only $86 a month. So now I’d only have to pay $1,032 a year, instead of the aforementioned $1,440 a year. Of course, the site’s still not sure…one page says yes, the other says no.
So by paying $1,440 a year, plus the $5,500 deductible, I would reduce the remaining $2,500 by 60%. So I’d only have to pay $1,000. So all in all, instead of paying $8,000, I would only have to pay a total of $7,940.
Yup, because of the premium and deductible I only save about $60 from the original $8,000. And next year, if I got another kidney stone (blessed fate, please do not be tempted to make that happen?) I’d only save $40, again. And if nothing happened and I didn’t see a doctor or go to the hospital all year, next year, I’d still have to pay $1,440 for nothing to happen.
And if I only had $6,000 worth of costs from the situation, like if I had been able to swallow the chalky crap instead of needing to get the IV-injected stuff for the CT scan, or something like that, then the numbers would be even worse.
Original Cost: $6,000
Premium: $1,440 (or $1,032 with tax credit)
40% of Remaining ($500): $200
Total Cost to Me: $7,140 (or $6,732 with tax credit)
Difference: $1,140 – $732, depending on tax credit
Yeah, so…I’d actually pay out more than I was charged, if I had insurance for more minor things, with the insurance.
But what makes the situation even more tilted in my favor is…the hospital I go to has a plan where people without insurance get a 50% discount if they pay their bill on time. This means that my $8,000 bill was actually only $4,000.
I paid a total of about $4000, with no insurance. Obamacare will charge me a fine (paid along with my taxes) at the end of the year for not having any insurance; that fine is about $160. So I’ll pay a total of $4,160 without insurance.
Anybody want to calculate that difference? Here, I’ll do it for you…I’ll even account for the premium discount for my wife not working…
With Insurance: $7,532 (with tax credit, as mentioned $7,940 without credit)
No Insurance: $4,160
Difference: $3,372 less ($3,780 if I don’t actually get the discount)
And before you jump on the same bandwagon as my mother, I’ll address the defensive question I always get when I point out those numbers to her: “But what if something really serious happened? Like…you got cancer and needed treatment?”
Let’s say I need $80,000 worth of treatment for my cancer. Guess what? I’d still have to pay the $1,032, plus the $5,500 deductible. Then 40% of the remaining $74,500. That’s $29,800, plus my $5,500 deductible, plus my $1,032 premium. Grand total cost to me would be $36,332.
Okay, so that is still saving 54% on something that expensive. Just one problem with that point: It still equals out to 140% of my gross annual income.
If we assume I can afford to pay $3,000 a year on medical costs, then I would never break even on that total. So spending ~10% of my annual income on paying off my medical bills, after the first year I would go from owing $36,332 to owing, roughly…$37,366.
This is because at 10.99% interest rate, the debt would go up by about $333 a month, whereas 3k a year only equals out to 250 a month. So each month I would actually go 83 dollars further in debt.
And before you say that such an interest rate on medical bills is ridiculous…Wyoming hospitals charges upwards of 18% interest on hospital bills. I chose 10.99% because if it was any higher, I’d get a Personal Service Loan from my bank and that’s their PSL interest rate.
If I’m going $83 deeper in debt every month, when I’m already spending more than 10% of my income on the bills; I would have to declare bankruptcy.
You know what would happen in this situation if I didn’t have insurance at all, with or without the 50% discount for uninsured people? I’d have to declare bankruptcy. So why not save myself a grand a year and declare bankruptcy, instead of paying some company to force me into bankruptcy for their own profit?
Either way I wind up broke; probably homeless and starving. Thanks Obama.