I was one of the unfortunate small-business owners in New Hampshire who received a cancellation notice from Anthem for my family individual-market health insurance policy. After quickly "doing the math," my spouse and I decided to opt out and pay the penalty. A $1,000 tax penalty vs. $12,000 in premiums for a $11,900-deductable, HSA-supported plan? No brainer for two middle-aged adults who exercise rigorously, have low cholesterol, still wear clothing that fit from our college days, have a healthy marriage, and don't smoke. So in other words, we didn't need the federal government to give us maternity coverage, bariatric surgery, mental health services or birth control. (Did I mention that my spouse is of the same sex?!)
As the last couple of weeks passed and we spoke to other small-business owners who decided to opt out, pay the tax penalty, and self insure, all of us had the same profile: 1) very healthy, 2) no history of family illnesses, and 3) have the financial means to weather catastrophic illnesses. Those who were "opting in" have: 1) chronic health problems (or poor lifestyle choices that contribute to chronic health problems), 2) cancer or heart disease family history, and 3) no means to address these ongoing problems, let alone a catastrophic illness or injury.
The week before last, I told our insurance agent of our decision to opt out because I did not want her to spend more time on trying to place our business with the monopoly called "Anthem." Imagine my pleasant surprise to find out today that Anthem will change the renewal date on our policy to December 1, 2013, for a mere $50 increase in the monthly premium, and we get to keep the policy with which we were perfectly content and continue to fund our HSAs through December 1, 2014.
Of course, come December 1, 2014, we are faced with paying $12,000 in premiums for a $11,900-deductable policy with a plethora of benefits that we absolutely will never need. Does anyone in Washington, D.C., actually think we are suddenly going to act in the collective social good and "play ball" come 2015?
To those sitting out there with group plans through your employers, do you actually think you will escape a similar fate, as your employer hands you your tax-free (for now) voucher and sends you into a private insurance health exchange where you will be subject to underwriting standards such as those in the individual market must undergo, and then you must make up the premium difference between your voucher and the actual premium?
Some of the Fortune 500 companies are already starting the transition. The wagon will soon be weighed down with other companies, small-to mega-cap sure to follow. Then the final blow will come when offering health insurance becomes more expensive than paying the penalty and sending your employees into the individual market for most companies.
At some point, enough companies will select this latter option and health insurance will be "off the table" in the compensation arena.
I am sure we can all see the soon-to-be "death spiral" of Obamacare in New Hampshire, and I assume in other states with relatively small populations for which only one insurer signed up to participate in healthcare.gov. Most of the healthy people will opt out, and the system will be left with those who receive more in benefits than they pay in premiums. The premiums will increase, and more and more people will opt out and pay the penalty. This will be the biggest example of adverse selection the New Hampshire insurance market has ever seen. And guess what? Not one more person of limited means or with a pre-existing condition will really be helped. Wasn't that what started all this?
Susan G. Price is a property casualty underwriter and former Democratic state representative in Barrington.