Part I
Concerns regarding “unaffordable” healthcare boil down to two aspects — monthly premiums to maintain the health insurance and out-of-pocket payments to receive healthcare services.
Undoubtedly, the premium hike outpaces every index of inflation while the coinsurance percentage is dropping like flies. Meanwhile with despicable insurance practices such as kicking up brand drugs to a higher tier very year, patients become distraught and frustrated, after finding out that the copayment would rocket from $100 to $800 a month next year(see the example of Truvada for PrEP).
Nevertheless, federal law has set the upper limit — the out-of-pocket (OFP) max — of an individual or a family would pay for healthcare if one holds a marketplace health insurance. For year 2020, a conventional private insurance individual plan OFP max is $8,200 and $16,400 is for a family. This limit is mandated by law, which means that once you pay this amount within the plan year for healthcare services, all subsequent covered procedures, services, medications and doctors’ visits become effectively “free” for the plan holder, as they are, required by federal law, to be covered at 100% by your insurance.
With the soaring cost of healthcare, deductible or co-insurance has essentially become an illusion; another confounding factor in the whole healthcare cost equation. Because, to be cynical at the very least – and god forbid – if any major medical condition were to happen to any individual nowadays, just be prepared to hit the OFP max from the get-go.
With all that being said, everyone should just pick the plan with the lowest monthly premium. And bully for us, most of time such plan is Health Savings Account Compatible (HSAC) — the mandated OFP max is actually lower than a conventional plan. For year 2020 such HSAC plan OFP max is $6,900 for an individual, compared to $8,200 that of non-HSAC.
With current marketplace individual insurance rate, the monthly premiums is around $300 upwards to $600. Let’s use my insurance plan for example, the Blue Cross Blue Shield Texas HSAC individual HMO. My premium is $350/month. if anything were to happen to me (knock on wood) I would have to prepare to spend $350 times 12 months, plus $6,900. That is the sum of premiums for a year plus the out of pocket max.
And the magical number is — drum roll— $11,100!
Andrew Yang has proposed the “freedom dividend” of $1,000 per adult American per month, that is $12,000 a year. What a joyous coincidence! This would cover the two aspects of current “unaffordable” healthcare system on an individual basis — monthly premiums and out of pocket payments to the worst case scenario of reaching OFP max.
Hey! The government is legitimately paying for my healthcare!
Without making a chaos, the “Yang Dividend” could factually provide healthcare for all.
Mind you, I am not here to argue the feasibility of Universal Base Income (UBI). This is only my narrow-minded opinion on how Yang could potentially solve the healthcare cost conundrum. I am not factoring in the inflation of such “free money” to all might cause, or how it might burden the taxpayers. I am fairly certain that if UBI were to become a reality, there will be more regulations and choices for American people in the regard, i.g. use it as a tax deduction option for people with higher income. After all, the standard deduction for someone filing as single and dependent-free, is $12,200 for FY 2020 (this has been doubled by Donald Trump in 2017 by his sweeping tax cut), so who is to say this is not Trump’s “freedom dividend” to us already?
To be continued…
Part II the Liz Warren Bash
https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/
https://thelink.ascensus.com/articles/2019/10/16/hsa-eligibility
https://apps.irs.gov/app/IPAR/screen/IPAR_1/en-US/summary?user=guest
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