I recently wrote an article responding to the Americans for Prosperity video about Emilie Lamb that has been making its way around the internet. I spoke with Emilie and took a good look at the plan she used to have, comparing it with her new Platinum plan. To sum it up, her old plan was a limited benefit policy with a $25,000 annual benefit maximum. Her new plan is ACA-compliant, so there are no lifetime or annual benefit maximums. And while her old plan had no limit on out-of-pocket costs, her new plan caps her expenses at $1500 annually.
The downside is that the old policy was $52/month (her employer and the state also paid $52/month each, so the actual premium was $156), and her new policy is $373/month after her small subsidy. That’s a big increase, and she’s understandably upset about it.
Emilie has lupus, and she’s been lucky that most of her expenses over the last several years were covered by her limited-benefit policy. During the course of researching and writing my article, and after it was published, I’ve had plenty of comments along the lines of “how much exactly should a person with lupus expect to have to spend in a year on healthcare?” and “Are catastrophic expenses a realistic outcome with lupus?”
But that’s missing the point of health insurance.
If we used that logic – extrapolating future medical expenses based on past and current medical history – I should probably just go without health insurance. Over the course of my life, the only health insurance claims I’ve ever had were for preventive care. Since I’m healthy and have never needed my health insurance, should I assume that will continue to be the case?
Obviously, the answer is no. Although I’ve never filed a claim with my health insurer for anything other than preventive care, I’ve also never gone uninsured. Because I know that there is no guarantee that I will remain healthy, despite my best efforts to do so. And I know that truly catastrophic healthcare expenses can happen to anyone, with little or no warning. The fact that I’m healthy now is no guarantee that I will still be healthy next month.
The same logic applies for people who do have pre-existing conditions. The ACA has – happily – done away with medical underwriting, so people can now purchase health insurance and know that their current medical conditions will be covered by the new policy (remember that there are open enrollment windows… you cannot wait until you need care and then enroll). But the main point of health insurance is to cover the things that might happen in the future that we don’t yet know about. Obviously, if a person already has a serious medical condition that is requiring extensive care, the fact that new policies cover pre-existing conditions is a huge bonus. But health insurance – like any insurance – is there to protect us against unforeseen catastrophes, like getting hit by a bus. The whole point is that we don’t know what those catastrophes will be, nor do we know if or when they will occur.
Some people will remain healthy long after they’ve become eligible for Medicare. Others will need significant care in their 20s or 30s.
Looking at a person with lupus and trying to determine future expenses by calculating costs that are only lupus-related is missing the big picture of what health insurance is supposed to do. A person with lupus could have a non-lupus-related catastrophic medical expense just as easily as person who is perfectly healthy. Our health today does not guarantee our health tomorrow.
Emilie’s old limited-benefit plan covered her expenses over the last few years. She was lucky, plain and simple. But luck shouldn’t have to be part of our financial planning when it comes to healthcare expenses. And there is no guarantee that Emilie’s old policy would have continued to cover the bulk of her medical bills in the future. But there is a guarantee that her new policy will. That’s what health insurance is supposed to be: peace of mind and a knowledge that even if you have a serious accident or are diagnosed with a significant illness, you won’t have to wonder how you’re going to pay for your care.
Benefit auctions and bake sales are a great way to pay for new lights for your middle school’s football field. But they shouldn’t have to be part of any family’s plan for paying for healthcare expenses.