Obamacare is not eliminating the short term cover it was supposed to

Somebody stated to me that history would remember Barack Obama for Obamacare. But I am not so convinced. I suspect that he will be remembered only for being the first “black” (actually only half-black) President. He may also be remembered for his tendency to allow fear to subordinate his actions. His tendency to overthink issues and take little action and his disinclination to develop strategies may also be remembered. Whether Obamacare will stand the test of time remains to be seen. In the short time it has been in force, large parts of it are counter-productive. That may just be a peculiarity of the “open enrollment” windows or something more fundamental.

The primary benefit of Obamacare (Affordable Care Act) was, ostensibly, to make health care affordable to all. For older people it is proving to be unaffordable and they have to seek alternative cover. As Reuters reports, the alternative cover that Obamacare was supposed to eliminate has risen by over 100%. Alternative cover is even being chosen by the young for “catastrophic” coverage. To make matters even worse, those who take out such alternative cover are deemed uninsured and are subject to penalties.

Reuters:

Despite the promise of coverage through the U.S. Affordable Care Act (ACA), the number of people applying for non-compliant, short-term health insurance policies was up more than 100 percent in 2014, according to new data available from companies who broker these policies.

This type of health insurance is exactly the kind that the ACA, known commonly as Obamacare, was supposed to upgrade. Short-term plans provide low-cost coverage for major medical events like hospital stays, with high deductibles and out-of-pocket costs, and are subject to denial if applicants have pre-existing conditions. They do not offer the protections of Obamacare for preventive care or maternity coverage, for example.

The government does not count these gap plans as qualifying health insurance, so people who have them are subject to penalties for being uninsured. ……..

….. Sign-ups at eHealth Inc to the short-term plans it offers through its website were up to 140,000 in 2014 from 60,000 in 2013, an increase of 134 percent, according to the company.

At another short-term carrier, Agile Health Insurance, a subsidiary of Health Insurance Innovations Inc, new policies were up 100 percent last year over the previous year, and are up again so far in 2015, according to Scott Lingle, the company’s senior vice president of business development.

Accounting for much of the jump are individuals who somehow missed the open enrollment period for an Obamacare plan. More than 11.7 million consumers signed up for Obamacare coverage through Feb. 22, according to the government. …… 

Both eHealth and Agile are also seeing new signups from retirees who are looking for a low-cost plan to tide them over until Medicare kicks in at 65. At eHealth, the 55 to 64 age group is now 9 percent of the market.

“If you shop for a 50-year-old on healthcare.gov, it is very expensive,” says Agile’s Lingle. “There are people who have looked at the prices and it makes more sense to buy short term.”

The largest constituency is young, healthy people seeking low-cost catastrophic coverage. Those aged 18 to 34 account for 57 percent of eHealth’s buyers. A typical policy could cost around $100 a month, depending on the state of residency and the features of the plan.

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