Better Care Reconciliation Act

Better Care Reconciliation Act

My son has been diagnosed with autism this year. The treatment he is receiving is extremely expensive. There’s been a lot of talk about repealing and replacing the Affordable Care Act, or Obamacare whatever you want to call it, and honestly I’m worried about it. I’ve read a lot of articles, listened to podcasts and watched a lot of debate about the new healthcare bill. I find it frustrating because I’m still not sure how the changes will affect my family. It can get hard and confusing to apply what I hear in the news to my situation so, I decided I’m going to read the new healthcare bill from the Senate to figure out exactly how my family is going to be affected by its passage. So far it’s been long tedious work. It took me about 2 ½ hours to get through seven pages of the bill. The biggest take away for me so far in the first 7 pages is:

  • The actuarial value of the benchmark insurance plan drops from 70% to 58%

So, what does that mean? Well, actuarial value is the amount your insurance covers on your health care expenses. It means when a medical issue happens like pregnancy, ER visit or autism you pay more out of pocket when it happens. For example, Oliver’s therapy for autism costs about $80,000 a year. Under the current system, insurance would cover 70% of the total expense, while I would be responsible for 30%. That means insurance pays 56K and I pay $24k through some combination of deductibles, copays and coinsurance. Under the proposed plan in this bill, the insurance coverage would drop to 58%, leaving me responsible for 42%. That means insurance covers 46K, which leaves me with 34K. That’s about $10,000 more my family would have to pay a year. Also, i would assume that over time the federal guidelines would affect the entire market. If the federal guideline for actuarial value is 58%, private insurance companies and employers could offer remarkably lower coverage and still compete. A company would be able to attract employees with a 65/35 ratio rather than an 80/20 which would affect every person, not just the enrollees the government exchange. I hear constant talk about the price of premiums when it seems the cost of the actual medical procedures are much more likely to sink families when life happens.

So I guess the fundamental difference between the two bills is whether or not you want a rise in premiums or a rise in out of pocket medical costs. Under the Affordable Care Act, the monthly payment for a premium may rise, but the insurance covers the bulk of the medical expenses. Under the Better Care Reconciliation Act, premium prices remain similar to the current system, but the total out of pocket cost rises when a medical issue happens. The answer seems pretty clear to me when I think of it in those terms. It is much more affordable to pay incremental increases monthly than having to come up with thousands after a medical incident.

Another takeaway is that legislation is way too hard to read.

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