The holiday season is looming, but this year Kate Joy and her husband aren’t budgeting for gifts or saving for a vacation. They’re figuring out how to afford the 150 percent premium increases they’ll face in the New Year, thanks to Obamacare.
Joy and her husband live in Sonora, California, and help support their 19- and 21-year-old sons, who both work part-time and attend a local community college. After her husband’s retirement, she enrolled her family in a private policy through Anthem Blue Cross Insurance because the plan the retirement package offered was too expensive.
“There must have been 20 or 30 plans to choose from,” she said, explaining that they ultimately chose a plan with a high deductible and low monthly payments because they are all very healthy and wanted to maintain lower monthly payments.
“We are very healthy, had savings for any emergencies, wanted to lower monthly premiums, so we thought no problem,” Joy said. “Everybody gets one checkup a year, I got all my female checkups, plus two additional doctor visits a year.”
Their deductible was $17,000 per year for their family of four with a $389 monthly premium. In 2011, California required all plans to pay for birth control and the family’s premiums increased to $499 a month.
A Canceled Plan
In late September, the family received a notice from Anthem announcing their plan would be dropped January 1 because it does not meet the requirements of the Affordable Care Act. If they wanted to stay with Anthem insurance, enrolled in an equivalent plan that was compliant with Obamacare, their new premium would be $1,252 a month.
“That means about $14,000 a year that would be paid into an insurance company when all we use health care wise is about two checkups a year each,” Joy said. The new premium amounts to one-fifth of her husband’s retirement salary, and she said that they don’t want to devote that much money to health care.
Desperate for more affordable options, Joy made an account on the California Exchange website. She said the cheapest, best option for her family was only $100 less than the plan Anthem offered and since they live off her husband’s retirement salary, the family does not qualify for any subsidies.
“My husband and I have talked about not getting the insurance at all,” she said. “It’s kind of scary to think that, but I don’t know what else to do.”
Even more frustrating for Joy is Obamacare’s threat to her relationship with trusted doctors. She’s had the same gynecologist for 29 years, in the same office, at the same hospital. But because of restrictions in Obamacare, insurers are sharply limiting their physician networks. Heritage’s Chris Jacobs explains:
Patients could face the choice of giving up their established doctor and traveling long distances to find a new doctor or hospital in their insurance company’s provider network—or paying significantly more to see a more convenient and accessible doctor on an out-of-network basis.
“At this point we really don’t know what we are going to do,” Kate said, fearing the effects a $15,000-plus health care bill would have on her family’s annual budget.
They’re so concerned about the increased costs that she and her husband have already started brainstorming on what they’ll have to cut back on if they choose to enroll in either plan. Here are all the cuts they’ve come up with so far:
- Stop paying the extra payment on my mortgage: $100/month
- Stop eating out: $150/month
- Don’t go to the movies: $36/month
- Switch to getting a haircut every other month: $15/month
- Stop getting manicures: $40/month
- Stop monthly charitable donations to Wounded Warrior and Habitat for Humanity: $70/month
- Stop saving for an annual anniversary getaway: $60/month
- No Christmas gifts to extended family: $40/month
- Quit buying beef at the grocery store: $100/month
- Teeth cleaning only once per year: $30/month
- Cancel all magazine/newspaper subscriptions: at least $30/month
- Cut DISH service to cheaper plan: $50/month
- Cancel land line phone service: $70/month
If Joy makes these cuts, she will save $791 a month, enough to make up the increase in her family’s monthly premiums. She said she realizes that other families aren’t in a position to cut so much from their budgets, and said, “I fear for what’s coming.”
UPDATE: Following publication of this story, Mediaite asserted on November 26 that Kate Joy’s family is eligible for subsidies that would make a Bronze 60 plan available at $4 per month. That is incorrect.
Even though she has chosen not to disclose her husband’s retirement salary, Joy did confirm that it is higher than the $58,899 cut off for subsidies under Covered California.
The Anthem option that is closest to the family’s current plan is $1,252 per month — money that Joy reiterated will cause unwanted cuts in other areas of the family budget:
As I tried to point out and I don’t think it came across, we are in a position to make discretionary spending cuts and we are truly blessed, but we still have a monthly budget and no one, I don’t care their income level, should have to deal with increases like we are seeing with Obamacare.
UPDATE II: In a series of tweets, Mediaite’s Tommy Christopher challenged Heritage’s update to this story. It appears that a poorly worded sentence on our part is causing confusion about whether Kate Joy’s family qualifies for a subsidy.
The sentence originally read: “The 150 percent premium increase amounts to one-fifth of her husband’s retirement salary, and she said that they don’t want to devote that much money to health care.”
In his story, Christopher was basing his calculations on the $753 per month increase in the family’s premium. Over the course of a year, that increase totals $9,036. That’s how Christopher calculated the $45,120 salary he included in his story.
However, in a subsequent email exchange with Kate Joy, she explained the total cost of the premium—not the increase alone—amounts to one-fifth of the salary. She declined to reveal the actual salary, but told us it is more than $58,899 cutoff for a subsidy.
Joy got the subsidy number by using the Covered California calculator. She acknowledged that a family of four could qualify for a Bronze 60 plan at $4 per month, as Christopher explained. Joy’s family, however, isn’t eligible because of her husband’s income.
What does this mean for the Joy family? Kate can purchase the Bronze 60 plan for $1,136 per month from Covered California. Instead, she’s decided to stick with Anthem, at a cost of $1,252 per month, because the Bronze 60 plan has higher out-of-pocket costs in the event of a major medical event.
In our earlier update, we inadvertently used the $1,136 figure instead of the $1,252 monthly cost. We regret the error.