by Kaiser Health News | Updated on 12.5.18
Dana Farrell’s car insurance is due. So is her homeowner’s insurance — plus her property taxes.
It’s also time to re-up her health coverage. But that’s where Farrell, a 54-year-old former social worker, is drawing the line.
“I’ve been retired two years and my savings is gone. I’m at my wit’s end,” says the Murrieta, Calif., resident.
So Farrell plans — reluctantly — to drop her health coverage next year because the Affordable Care Act tax penalty for not having insurance is going away.
That penalty — which can reach thousands of dollars annually — was a key reason that Farrell, who considers herself healthy, kept her coverage.
Now, “why do it?” she wonders. “I don’t have any major health issues and I’ve got a lot of bills that just popped up. I can’t afford to pay it anymore.”
Farrell is among millions of people likely to dump their health insurance because of a provision in last year’s Republican tax bill that repeals the Obamacare tax penalty, starting in 2019, by zeroing out the fines.
The Congressional Budget Office estimated that the repeal of the penalty would move 4 million people to drop their health insurance next year — or not buy it in the first place — and 13 million in 2027.
Some people who hated Obamacare from the start will drop their coverage as a political statement. For people like Farrell, it’s simply an issue of affordability.
Since Farrell started buying her own insurance through the open market in 2016, her monthly premium has swelled by about $200, she says, and she bears the entire cost of her premium because she doesn’t qualify for federal ACA tax credits. Next year, she says, her premium would have jumped to about $600 a month.
Instead, she plans to pay cash for her doctor visits at about $80 a pop, and for any medications she might use — all the while praying that she doesn’t get into a car accident or have a medical emergency.
“It’s a situation that a lot of people find themselves in,” says Miranda Dietz, lead author of a new study that projects how ending the penalty will affect California.
People like Farrell whose incomes are too high to qualify for tax credits are especially vulnerable, says Dietz, a research and policy associate at the University of California-Berkeley Center for Labor Research and Education. They must pay the entire premium themselves.
Premiums, even for a bronze plan with a deductible of more than $6,000, are enormous in some cases, she says. “The state’s done a great job of implementing the ACA,” she says, “but there are still Californians who just find insurance out of reach.”
Up to 450,000 more Californians may be uninsured in 2020 as a result of the penalty ending, and up to 790,000 more by 2023, boosting the state’s uninsurance rate for residents under 65 to 12.9 percent, according to the study. The individual market would suffer the biggest losses.
Covered California, the state health insurance exchange, predicts that enrollment in the individual market — both on and off the exchange — could drop by 12 percent next year, says agency spokesman James Scullary.
Exchange officials also blame the end of the penalty for a 3.5 percent average increase in premiums, because the departure of some healthy people from the market will lead to a sicker and costlier insurance pool.
Health insurance can be difficult to afford, but going without it is a “bad gamble,” Scullary says. Keep in mind: More than 22,000 Covered California enrollees broke, dislocated or sprained arms or shoulders in 2017, and 50,000 enrollees were either diagnosed with — or treated for — cancer, he explains.
“We know that none of those people began the year thinking, ‘This is when I’m going to break my arm,’ or ‘This is the year I get cancer,’” he says.
If you’re considering dropping your plan and risking the devastating financial consequences of an unexpected medical expense, check first to see if you can lower your premium.
“A big mistake for people is to look at the notice they get for their current health insurance and see it’s going up a lot and then throw up their hands and decide they’re going to go without,” says Donna Rosato, a New York-based editor at Consumer Reports who covers health care cost issues.
“Before you do that, look at other options.”
The most important thing to do is seek free help from a certified insurance agent or enrollment “navigator.” You can find local options by clicking on the “Find Help” tab on Covered California’s website, www.CoveredCA.com.
Next, see if you can qualify for more financial aid. For instance, if your income is close to the threshold to qualify for tax credits through Covered California or another Obamacare insurance exchange — about $48,500 for an individual or $100,000 for a family of four this year — check with a financial professional about adjusting it, Rosato suggests. You might be able to contribute to an IRA, 401(k) or health savings account to lower the total, she says.
Beyond that, be flexible and willing to switch plans, she advises. Consider different coverage levels, both on and off health insurance exchanges. If you’re in a silver-level plan (the second-lowest tier), you might save money by purchasing a less expensive bronze-level plan that has higher out-of-pocket costs but would protect you in case of a medical emergency.
This year, Farrell got a clean bill of health from her doctor after a round of tests. She’s nervous about being without coverage next year, but feels she doesn’t have a choice.
“It’s going to be the first time in my life I’m not going to have insurance,” she says.
Written by Kaiser Health News
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Universal single payer healthcare, cradle to grave. That is the only sensible healthcare system.
I’m still looking for that elusive plan Obama promised me where I can keep my doctor, keep my plan and it would cost me less. About 30% less. You can tell when the Democrats are lying. Their lips are moving.
I don’t know all of Dana Farrell’s circumstances, but you say she is 54 and been retired for two years. If capable the wisest choice might be returning to work. retiring without substantial savings is never in anyone’s best interest. Retiring early only compounds the problem.
I want Congressional healthcare- not single payer.
UNIVERSAL SINGLE PAYER HEALTHCARE SYSTEM CRADLE TO GRAVE!
Absolutely dropped with no looking a back. ACA is a plan where the middle class and above subsidize the low income people who are either not smart enough to make it or want to live off of the hard workers of the world. My family of five would have had to pay $1850 in 2017 and close to $2000 so that we can subsidize all of these people. Utterly ridiculous. Why would any middle class person want this socialist plan Obama put in place?
Haven’t had heath insurance since my insurance company I had a HSA with for 23 years went bankrupt and I lost all my savings. I will never pay for crap insurance. Pay out of pocket.
Take time to research insurance options. The market ,plus new options will make things better. Beware gloom and doom and media fear mongering.
I am lucky enough to be provided with Company health insurance. However, I spend over $5,000 a year for my kid’s coverage. Since the deductible is over $12,000 for family, it may be more financially feasible to pay out of pocket. Health insurance providers are making huge profits and continually raising premiums and deductibles. We are basically giving money to monopoly health insurance providers, so they can buy mansions on the oceans, exotic cars and islands.
Universal health care NOW! The ACA was a good stepping stone and it was dramatically better than the diminished shadow of the ACA we have left after the trump scourge. Removing the penalty destroys much of the program. Removing protections for those with preexisting conditions is disgusting and evil.
We all need healthcare at some point or another. Health insurance is not a great system, but it's the one we're stuck with (for now). People who refuse to buy insurance and then show up at the ER asking for charity care increase costs for all of us, so it's part of a good social contract to buy and maintain health insurance of some sort to help us keep costs down. I'm very open to reform, but dropping insurance is irresponsible and causes pain to everybody.
Kill the parasite healthcare insurance industry! They contribute nothing to healthcare except make it too expensive for 75 millions Americans to see a doctor so they can pay their CEOs $22 million a year! Only when grass roots mass movements get in the streets will the capitalist government give us Medicare for All, a reasonable, cost-efficient national system.
Anyone that drops their policy is a fool. The cost to be seen by a doctor is $200, without tests. Blood tests alone could cost hundreds of dollars. Ultrasounds above $1,000.00, hospital stays could be thousands, depending how long a stay you have. Prescriptions can be astronomical too.
Fix healthcare - the GOP has gutted the ACA instead of fixing the issues - they didn’t help in creating it - now do at least one nice thing before you guys are ultimately forced out of office - fix the ACA. We are a developed nation that doesn’t take care of its citizens - absurd
Single payer health insurance.
Even though I have service connected disabilty, I keep my insurance, to help pay for treatment not connected to the service and cover my wife.
Universal Single Payer Healthcare!
Maybe America is starting to see that government should stay out of the insurance business.
Obamacare must be expanded and improved. This is a fundamental right for all Americans.
We have a Cadillac plan ! But my wife needs treatment that is listed in the top 10 reasons for using it ! But since Medicare doesn’t allow it ! We have to pay out of pocket ! That’s right our CADILLAC PLAN IS GOVERNED BY MEDICARE ! I know what will fix this !!! SINGLE PAYER !!!! (She is in her late 40’s )
The Unaffordable Care Act has destroyed insurance, as it was intended to do.