Articles such as this one puzzle me somewhat:
Nelson, who will be 62 in January, said he had been without health insurance since 2009 and is trying to get coverage for him and his wife…
He was skeptical about Covered California’s offer of a grace period for those who were unsuccessful in signing up for coverage Monday.
“But that’s predicated upon, among other things, getting the first step done so that I can apply. But I can’t get the first step done, so I don’t think it would apply,” said Nelson, who has a doctorate degree in natural sciences. “And I’m sure there will be a lot of people like me.”
I have no doubt there are. And, having spent a great deal of time on the California website myself doing research, I’m not defender of the site (nor of Obamacare, as anyone who reads this blog regularly knows).
But my point is this: why are so many people such as Nelson so very frantic at the moment? I fully understand why people who already had coverage that’s ending in January would be scrambling and almost desperate to get coverage that picks up where theirs left off. And I understand why those with pre-existing conditions who had trouble getting it before would be chomping at the bit as well. But for someone such as Nelson, who had no coverage before and who appears to have no pre-existing health condition that would drive him pronto to the doctor, why the terrific rush to get covered immediately? The Obamacare penalty doesn’t kick in unless a person hasn’t enrolled by March 31, 2014, and by my math that’s a full three months away. The present deadline (whatever it was or is) is only for coverage beginning on January first of 2014. If a person isn’t ill, and hasn’t had coverage in years, there’s nothing exceptional about that date, although it’s understandable to want to be covered as soon as possible.
But if a person is really eager to be covered tomorrow (and I mean “tomorrow” literally) there are temporary alternatives. Most people don’t seem to realize, and most newspapers don’t appear eager to tell them, that if they don’t have pre-existing conditions they can sign up in the meantime for what’s called “temporary” health insurance. It’s catastrophic insurance and non-compliant with the Obamacare regulations and therefore does not protect against the penalty if it’s held past March 31, 2014, but it’s better than nothing, and it’s relatively inexpensive (and, by the way, gives you choice of any doctor you want).
Several reputable companies sell it; it hasn’t been outlawed yet. The buyer pays month-to-month or in one lump sum for up to six months in California (a person can sign up for two 6-month periods, but that’s the limit in California and many other states). A person can drop it as soon as he/she obtains permanent coverage from Obamacare or elsewhere.
So someone like Nelson (who appears to have no pre-existing conditions; at least, the article doesn’t mention any) could buy temporary insurance, and as long as he drops it by March 31, 2014 and picks up Obamacare-compliant insurance instead, he won’t even be liable for the Obamacare penalty. For a 62-year-old man in California in the San Luis Obispo area such as Nelson, a policy with a $7,500 deductible would cost about $275 a month (I checked) or about $199 a month if paid for by the lump-sum method. For a man of 32, living in the same area, that same policy ($7,500 deductible) would cost about $77 a month, or a little over $52 a month if paid for in one 6-month lump sum (and not much more for a deductible of $2,500, although the differential for someone of Nelson’s age would be much greater).
That’s a lot less than either person would pay for regular insurance under Obamacare. It’s even less than most would pay with subsidies under Obamacare. And although temporary insurance only pays once the buyer meets that deductible, and therefore everything prior to that must be paid for out-of-pocket, it offers some peace of mind against catastrophic loss. Isn’t that what insurance was originally supposed to do?
Not a perfect solution, to be sure. But many people might prefer it to nothing and to anxiety while waiting for the recalcitrant website. Not only does it protect from catastrophic events, but it would buy time to let the Obamacare situation sort itself out at least a bit, if such a thing ever happens.
So I repeat: what’s the big rush to get Obamacare for those who don’t have pre-existing conditions? I think it’s because most people don’t even know about the existence of temporary insurance. Why the newspapers seem to be keeping mum about this option I’m not sure, but my guess is that they either are unaware of it too, or they are reluctant to say anything that would lessen people’s motivation to buy Obamacare ASAP.
I’ve had temporary health insurance myself in the past (I think I’ve mentioned that I’ve had almost every kind of health insurance under the sun), and I really liked it. It was exactly what I was looking for: low premiums, protection from the worst, with everything else out of pocket. My only regret was that I was forbidden by law keep on buying it past the two 6-month periods. Somehow the government decreed—even years ago, before Obamacare—that there needed to be rules to “protect” people from this sort of thing.