26, Uninsured, and Mad: 2014 Can't Come Soon Enough!

(Editor’s Note:  The real-life letter from “Ticked off” below has been edited to make the language more suitable for general audiences.)

Dear Cheasty,

WTH. I hate health insurance companies. I used to be covered by my father’s insurance, but I just turned 26 years old and had to go buy insurance on my own because I don’t have insurance through my job. I submitted my application today, and I AM SO MAD. I found out that i might not get covered because of having been born with Juvenile Rheumatoid Arthritis. WTH WTH WTH WTH. I thought they couldn’t do that anymore because of Obamacare.

AND!!!!! They made me pay the $196 up front before they even reviewed my application. CORPORATE BULLIES. Where is the picket line?

Ticked Off in Texas

Dear Ticked Off,

All right, I’ve got good news and bad news. Which do you want first – the bad news? OK, then. A little bit of bad news, then a healthy serving of good news. Here we go.

The bad news is that, just like every other kind of insurance (home, auto, life, etc), health insurance companies have every right to ask you to pay your premium up front. The way it works today is that you get your money back only if they deny you the policy you’d like to buy, for whatever reason (i.e., a pre-existing condition). This is part of what makes purchasing insurance so difficult for individuals and small business owners – full premium payments up front. This up-front payment rule isn’t going to change with the Affordable Care Act.

The good news, however, is that with changes coming with Obamacare, insurance companies won’t be allowed to turn you down for coverage – or even charge you a higher premium! – for pre-existing conditions like your JRA. This rule is already in place for children (in other words, if you were 18 or younger, this question of whether they’d turn you down wouldn’t be an issue), and will be in place for adults starting on January 1, 2014. So hang in there, Ticked Off! I know it’s not an immediate fix to your current problem, but in a little over a year and a half from now, you’ll never have to worry about gaps in your coverage again. When you pay that premium up front after selecting the plan you want, you can be assured that you will be insured.

Now, to address your “corporate bullies” comment. Here again, some good news! Beginning in 2014, in every state’s new private insurance market (called an “Exchange”), those for-profit companies will have to compete with non-profit insurance companies.

But what’s that mean, you ask? The difference between a for-profit insurance company (e.g. Aetna or Humana) and a non-profit insurance company (e.g. Scott & White) is that the for-profit companies use their profits to pay their stockholders. The stockholders, therefore, put considerable pressure on the for-profit companies to earn high profits so they receive higher payments.  Non-profits won’t have that tension – with no stockholders, they’ll have less motivation to extract high-as-possible premiums from their clients.

OK, you say, that all sounds great, but where are these non-profits going to come from? Well, some non-profits already exist, like Scott & White in central Texas, and the ACA is offering $3.8 billion in low-cost loans to help get more insurance non-profits (called co-ops) up and running.  Another advantage of the co-op model is that they will be member-run. That means that you, Ticked Off, could get yourself on the board of directors and really make a difference!

The objective is to have at least one co-op in every state in 2014. I can’t promise you everyone will be able to buy coverage from a nonprofit (in a huge state like Texas, there may be areas without non-profit coverage options), but at least we’re getting co-op options up and running.

All right, Ticked Off. I hope I’ve been able to explain at least a little bit about how the Affordable Care Act will impact your situation. I wish the ACA had been able to flip a switch and guarantee coverage for all overnight in 2010, but the complex nature of the law made a long implementation process necessary. So for now, if you want to shop around and compare plans before you commit to one or another, go check out this website: www.healthcare.gov. Hang in there, Ticked – things are getting better, I promise!

To a well and healthy Texas,

Cheasty Anderson