No one likes to talk about insurance, any more than they like to talk about their ailments. However, both of them are pretty much inevitable at some point. Fair warning: a political comment or two might sneak into this discussion. This is almost inevitable because the U.S. Government has inserted itself into the insurance business. I will keep my criticisms as factual and mild-mannered as I can. However, I was shopping for insurance today, so I might not be as polite as I would be otherwise.

I’ll try to answer some basic, no-duh questions in this post, but let me caveat this as strongly as I can: I am not an insurance professional. I am not responsible for any advice taken from this blog. If you have serious questions about your insurance, you should talk with your provider.

Why do we have insurance, anyway?
Why not cut out the middleman (or woman) and just pay doctors directly? The bottom line is that health doctors’ services are highly specialized, the risks if they are wrong are high, and if we run into a serious health problem–anything from massive injury to a life-threatening disease–we as individuals can’t afford to pay for the whole tab. And the bigger the problem, the more expensive the treatment. And there are some laws on the books that kind of make it necessary (see below). In short: yes, you need health insurance.

How does insurance work?
Health insurance is a series of bets placed by a company using the premiums of its customers that you or your loved ones won’t get sick. If you do get sick, the money pooled from thousands of people–each paying hundreds of dollars per month–is used to help you pay for your doctor bills, medications, bandages, psychiatric visits, etc. If premiums exceed payouts, the insurance company makes a profit; if payouts due to illness (or accidents or hurricanes, etc.) exceed premiums, the insurance company tends to increase premiums on their customers with the highest risk or most expensive plans.

What’s the Affordable Care Act (ACA) all about and why are some people so upset about it?
I’ll tread lightly here and be as factual as possible. The primary stated goal of the ACA (also known as Obamacare because it is the signature piece of legislation of the current President) was to ensure that millions of Americans who don’t health insurance could obtain it. Other goals and stated outcomes can be found here. One of the reasons that insurance companies have refused to sell insurance policies to specific individuals is that they are too high risk for the company to absorb the costs. This is especially true of people with “preexisting conditions,” such as people with cancer, difficult pregnancies, or other medical issues (such as health effects related to smoking) that are guaranteed to cost a lot of money. ACA prevents companies from denying that coverage. Sounds great, right? However, there are a few catches.

Before I delve into those catches too deeply, take a moment to read Mark Twain’s thoughts on accident insurance for a little levity.  Go ahead, I’ll wait. Okay, feel better? Great. Back to reality.

As I mentioned earlier, to cover the costs of higher-risk customers, insurance companies must pay out claims from money obtained from other customers’ premiums. With additional payers now in the system (subsidized to help them pay–more on that in a moment) and coverage for more pre-existing conditions being mandated, premiums must necessarily go up for people who can and do pay into the system. The subsidies paid to people who previously couldn’t afford insurance come from the federal government–our tax dollars–effectively expanding the pool of money available for coverage–but premiums will continue to go up because of the pre-existing condition requirements of the law. Some folks are upset about the fact that their federal tax dollars are paying for (or not paying for) some forms of birth control. Also, according to a report from the Congressional Budget Office, our national government’s deficit is likely to go up over the coming years.

What is “single payer,” and why don’t we just do that and get rid of insurance companies altogether?
A “single-payer” health insurance system would basically mean that everyone would get their health insurance from the government, paid for out of our tax dollars. The upsides of such as system are that it would remove any doubt about how to handle health insurance matters; it would provide a larger number of people paying into the system; and, theoretically, the system would be more efficient because there wouldn’t be as many players. The downsides are: government isn’t any more efficient now than the private sector; lack of competition means there isn’t any incentive to bring costs down; and because health insurance would be funded by tax dollars, it would be subjected to votes by Congress. Why is this a problem? Because now, instead of your healthcare coverage being subject to a yes-or-no vote based on dollars, it could now be subject to politics.

So what does all this mean for me?
It depends on whether you qualify for a subsidy or not. If you make less than some magic number per year and have X number of dependents, you could qualify for a subsidy. The subsidized health insurance plans are pretty decently priced, with monthly premiums ranging from $200 to $400 per month, depending on the level of coverage.

All of the health insurance plans out there are now ranked by “metal,” with Gold coverage being best, then Silver, then Bronze, kind of like the Olympics, but with less athleticism and more paperwork. Gold plans have higher premiums, but they cover more of your medical costs, have a broader “network” of doctors you can go to, and have a lower deductible (the amount of money you must deduct from your coverage and pay out of pocket). Bronze plans provide at least some coverage (60% of major medical expenses vs. 90%) and their premiums are much lower, but they have smaller networks of doctors to choose from and your out-of-pocket expenses are much higher.

As for what this means for you, personally, again that will vary by your income and personal circumstances. When you go to Healthcare.gov, or your state-level healthcare exchange, which is supposed to help you find insurance plans in your state, the primary things they will ask are:

1. Where do you live?
2. How much money do you make in a year?
3. How old are you, your spouse, or your dependents?
4. Are you getting insurance for yourself or yourself and others?
5. Do you smoke?

The political part comes in because not every state in these United States set up a state-level exchange because they didn’t agree with the federal government interfering in the insurance market this way. That, and because ACA would have required the states to pay for the subsidized insurance–that would mean higher taxes at the state level. Not every governor wanted to do that, and so people living in states that don’t have exchanges need to go to the federal Healthcare.gov site to shop for insurance.

Weren’t there problems with the Healthcare.gov website?
Yes. You can read about the challenges here or on the news website of your choice. My personal workaround was to shop for plans on Healthcare.gov and then, once I’ve found a plan, go to the company directly to purchase the appropriate plan.

I don’t qualify for a subsidy. Now what?
Neither do I. Congratulations, you make enough money that you can pay into the system as a regular customer. Just be aware–this happened to me as a nonsmoking single male with no dependents–plans have changed drastically in the last two years. Plans that existed in 2013 or 2014 are not available. Both plans I obtained off the Healthcare.gov marketplace are now gone and have been replaced by plans with higher monthly premiums and higher deductibles. Your mileage could vary.

Can I get a group insurance rate?
There are some options for freelancers…check out this Forbes article (fair warning–this is from 2012). My personal research showed plans with premium prices and deductibles similar to what I was seeing on Healthcare.gov. Again, your mileage could vary.

I don’t want to put up with all this aggravation! What if I decide that I don’t want insurance at all?
The ACA includes something called the “individual mandate,” which basically states that, by law, everyone must have insurance. If you don’t get health insurance, you have to pay a fine.

Any other advice?
The Healthcare.gov open enrollment period for 2015 is November 15-February 15. Get insurance and remember to budget for that in your annual expenses. Or, if fighting the insurance game really bugs you and you don’t want to pay a fine, you can become a full-time employee of someone else and let their HR and benefits department/person worry about all this paperwork.