Will Obamacare Make You Blow Your Budget?

NEW YORK (MainStreet — Two in five Americans, or some 40%, are spending more money on health care now than last year and are concerned how the new Affordable Care Act will affect their finances.

Only 8% of Americans say they are spending less money now on health care, according to a new Bankrate.com report.

Consumers are questioning how the Affordable Care Act, also known as Obamacare, will affect their current health coverage. 28% say this is what they would most like to know about the new law, followed closely by the 24% who want to know how it will affect their household budgets. Another 23% are most curious about whether the Affordable Care Act is really going to happen, and 15% say their top question is simply what Obamacare is.

"We're just three weeks away from when the new health insurance exchanges will begin accepting applications and we're still observing a disturbing lack of consumer education," said Doug Whiteman, Bankrate.com insurance analyst. "If this doesn't change soon, millions of Americans could miss important deadlines or make uninformed decisions."

When open enrollment on the health insurance exchanges begins on October 1, individuals who lack employer-sponsored coverage will have the opportunity to buy a health plan for themselves and their families.

28% percent of Americans are feeling more negative about the Affordable Care Act now than they were 12 months ago, twice as many as the 14% who are feeling more positive. One in four people say it is more difficult to handle medical expenses now than it was a year ago.

Since the law is over 900 pages, consumers are stymied by the details, said Whiteman.

"It is very complicated," he said. "The law runs over 900 pages and is very nuanced and maybe people are tuning out."

Consumers need to be proactive and start doing research if they do not have an insurance plan currently, he said.

"It is time for people to start paying attention and be more educated particularly if they are uninsured or buying their own health insurance," he said. "It is the reality. It is happening. People will have six months to shop for a health plan after October 1. We are very concerned people are missing out on important deadlines and benefits such as the subsidies that will cut the cost of health in insurance."

Employees who are enrolling again in an employer-sponsored plan should be aware of changes beyond the cost of the plan premium, said Robin Gelburd, President of FAIR Health, a national not-for-profit corporation. Employees should examine the benefits such as whether the plan's provider network changed, the services that the plan covers or the out-of-network reimbursement provisions, she said.

"Consumers should not assume that their plan benefits will stay the same when re-enrolling," Gelburd said. "Consumers also should be aware of plan elements that may significantly affect out-of-pocket costs. It is important for consumers to understand how a plan's cost-sharing features such as deductible, co-pay and co-insurance impact their overall costs."

A recent survey conducted by Aflac, the supplemental insurance company, found that 83% of workers can only afford $1,000 or less in deductible costs each year while only 46% of employees have less than $1,000 in savings for medical expenses.

"Ensure that no stone is left unturned when it comes to choosing benefits," said Audrey Boone Tillman, vice president of corporate services for Aflac. "Learn more about all insurance policies offered by your employer or on your state's exchange, including supplemental insurance plans which provide an additional layer of coverage and help employees cope with out-of-pocket costs associated with accidents or illnesses—expenses major medical insurance is not designed to cover."

Half of employees agreed that $25 is the maximum increase to their monthly health insurance premium that they are able to cover financially while 4 in 10 employees will have to cut expenses elsewhere to cover the difference if monthly premiums increase, the survey said.

"It's important to also look at previous records and bills to understand how much health care actually costs," Tillman said. "The bottom line is that cheaper isn't always better."

20% of people said they will trade down on their benefits package, accepting decreased coverage to get a lower premium.

"Choosing a lower monthly premium may mean electing a lower percentage of coinsurance coverage, which could result in greater expenses if an emergency occurs," Tillman said. "If consumers aren't educated about the full scope of their options, they risk making costly mistakes."

Even if you only go to the doctor once or twice a year, ensuring you have the right insurance plan is important, she said.

"While recent changes in health care may offer more Americans access to major medical health insurance, it may not offer the out-of-pocket cost relief that some consumers expect," Tillman said. "Young consumers need to take a hard look at how they will cover the costs that major medical insurance doesn't in case of an accident or emergency."

The new healthcare insurance requirement will provide more coverage for most individuals, said Donato Tramuto, CEO of Physicians Interactive, an online clinical resources provider for healthcare professionals.

"We know that in 2014 there will not be any more pre-existing condition denials," he said. "I think that is going to be a big plus. I am optimistic that things are changing for the better under the ACA, but consumers also need to understand that healthcare insurance is going to become more like auto insurance. If you are a safe driver with good driving habits, then your rates will be lower. You as the consumer will be in the driver's seat – so much so that insurance companies will no longer be able to cancel your coverage and you also have the ability under the ACA to appeal decisions of your insurance company."

--Written by Ellen Chang for MainStreet

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