Buyer Beware: Buy Only ACA-Compliant Plans

For individuals buying coverage for themselves or their families, enrollment must be completed by December 15th, 2021, for a January 1st, 2022 effective date. Once again, we want to reiterate the importance of only buying Affordable Care Act (ACA)-compliant plans for the protection those plans provide.

Please do not consider the following as a substitute for Affordable Care Act-compliant plans:

• A Christian ministry co-operative or any other type of co-operative. These plans are not insurance.
• Short term coverage.
• Supplemental coverage or a limited benefit plan of any sort.
• Association plans which appear too inexpensive to be legitimate and/or your tie to the organization is questionable.

Please note that student coverage offered through a college or university was forced to become ACA-compliant with the reforms of the individual market which took effect in January, 2014.

A cover story in the Wall Street Journal on October 29th featured a tragic story headlined, “$100,000 in Debt: Arbitrary Hospital Prices Hit Some Hard.” Arbitrarily inflated hospital charges, extreme variability in hospital negotiated rates, and the general lack of transparency in the field are outrageous and unacceptable. However, the reason this couple incurred such substantial debt was that they were not on an ACA-compliant plan when the wife was diagnosed with cervical cancer. ACA-compliant plans regulate out-of-pocket maximums for in-network services. Out-of-pocket maximums for in-network services were as follows for 2020 and 2021:

The article suggests arbitrary hospital charges are the reason the woman featured in the Wall Street Journal story incurred the massive debt. She was apparently diagnosed with cancer in 2019 and sadly died earlier this year, but it is clear from the article that when she was diagnosed she was not on an ACA-compliant plan and therefore did not have comprehensive coverage and protection. The plan the couple were enrolled in is domiciled in Oklahoma. The couple resided in South Dakota.

Individual coverage that provides the most protection is coverage that is purchased either through the Marketplace (federal or state depending on your state of residence) or directly from an insurance company offering ACA-compliant plans based in your official state of permanent residence. These are plans that have been approved by that state’s Insurance Department and hence meet both federal and state guidelines.

An additional tragedy is that according to the article, the couple’s income suggests they would have qualified for a premium tax credit, or subsidy, for an ACA-compliant plan offered through healthcare.gov in their state. It is possible they would have paid less for an ACA-compliant plan that what they paid for their non-ACA compliant plan.

The out-of-pocket maximums are staggering numbers, and potentially ruinous, for some. Nevertheless, when you have serious illness and need medical services, ACA-compliant plans provide protections that more limited benefit plans do not. We understand that in certain circumstances, ACA-compliant plans can disappoint as far as networks, referral rules, and high premiums (for those who are not eligible for a subsidy). However, in the case of serious illness or injury, they protect the insured from ruinous medical bills.