Do your homework before deciding on health insurance

We are in the middle of the open enrollment period for health insurance so everyone should register to be covered for 2016. Moreover, the Affordable Care Act makes it so everyone is now legally mandated to buy insurance or pay a penalty that increases in 2016 to $695 or 2.5 percent of taxable income, whichever is higher.

The longer the act has been in force, the more it has wreaked havoc. Our dominant carrier in North Carolina, BlueCross BlueShield, has been approved for an average increase of 32.5 percent after requesting 34.6 percent in 2016. Perhaps worse is that, in 2016, the number of people covered by insurance may be only slightly higher than in 2012 — excluding people who are now covered because they got jobs.

Earlier this year the Congressional Budget Office forecast that 21 million people would buy insurance through the Affordable Care Act. The Obama administration now hopes that 10 million will.

Clearly, this act has helped about 3 million people who were unable to be insured previously because they had some preexisting condition. But the price paid to help those 3 million people has been staggering, including the loss of 2.5 million full-time jobs, the CBO estimates.

Essentially all of the jobs lost were held by poor people, so our county has been disproportionately hurt. My adult students continue to report the conversion of their previously full-time jobs to part-time. So while 3 million people now have insurance, about 2.5 million people have trouble keeping a roof.

A recent estimate shows that a net of 260,000 people have acquired insurance through the Affordable Care Act. It is difficult to calculate with certainty because the government refuses to release relevant numbers, but we know that about 7 million people had policies cancelled when the act began and about 10 million will be covered next year.

We haven’t been told how many others have had policies discontinued, how many have purchased individual policies outside of the exchanges, or how many people formerly covered are now opting to pay the fine because the premium has skyrocketed.

One of the other ongoing developments has been the bankruptcy of more than half the state government-sponsored health insurance providers. Fortunately, North Carolina did not establish one, but all the money given to start these organizations is gone and hundreds of thousands of people have to make other arrangements for 2016. To make matters worse, many health care practitioners are not accepting these insurances for the remainder of the year because they fear they will not be reimbursed by the organizations closing their doors.

Look for changes in 2017: United Healthcare, the largest insurer of Affordable Care Act exchanges in the country, recently reported substantial losses and announced that it is reducing advertising for enrollments in 2016. This move is widely interpreted to mean that it will not be in the marketplace in 2017. Authors in media outlets that had been incredibly supportive of the act — The New York Times, Huffington Post, etc. — are now publishing articles about its death spiral.

If only 10 million of the sickest Americans enroll and insurance companies retract, prices will continue to go up, enrollees will continue to go down, and insurance companies in the market will continue to go down.

The strong message this year from the Department of Health and Human Services is to “shop around.” That is always prudent advice. However, the prospect of changing physicians and medical facilities each year is not attractive, particularly for people with chronic conditions.

Be very careful that you understand what you are purchasing. What is the deductible? This is an important consideration for many people buying subsidized policies through the exchange, as their deductible will be more than the annual premium.

Are your doctors covered by the plan? Is your preferred hospital? Are any prescriptions you take routinely covered? (Be on the lookout for the word “formulary.”)

Many people now spend more money on health care than they do on housing, so treat this purchase decision as carefully as you would buying a home.

Eric Dent is a business professor at Fayetteville State University who lives in Lumberton.

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