Quick non-political FI/ER-related post after last night’s dramatic Senate vote to kill the “skinny repeal” bill and by default leave the Affordable Care Act the law of the land. This is a policy post; political comments will not be approved.
Roughly a year prior to the enactment of the Affordable Care Act we learned that my wife had ductal carcinoma in situ, the most common form of breast cancer. Thanks to regular mammograms her doctor caught the cancer before it spread to her lymph nodes, so she had hasty outpatient surgery to remove the tumor, got radiation and hormonal treatments, and has since been cancer-free…obviously cause for great celebration.
However: from the very moment of her diagnosis we were stuck in our home state; no longer free to move beyond its borders. Here’s why.
As you probably know, the ACA’s preexisting conditions clause prohibits insurers from denying coverage to individuals with serious medical problems. Before the ACA, though, insurers were free to write multi-year exclusion riders, or outright deny you, for specific conditions like…you guessed it…breast cancer. If you’d had your condition prior to buying a new policy, tough shit. You yourself were responsible for every penny of the costs until the exclusion rider expired. No insurer would cover you.
And since customers can’t buy health insurance across state lines, as of the moment of your diagnosis you were trapped in your home state. If you’d moved across state lines you would’ve had to buy a new policy, and if you had to buy a new policy, you’d incur a new preexisting condition exclusion or even complete coverage denial. So again, you’d be on your own for any costs associated with your condition.
In short, you were state-locked.
Now…picture this situation. You’re an only child. You and your spouse are self-employed and work from home. Your jobs are completely portable. The two of you have a teenaged daughter who suffers from type 1 diabetes.
Your father has already passed and your elderly mother lives halfway across the country. She develops macular degeneration and starts losing her eyesight. She needs in-home care but for whatever reason can’t get it through her insurer, be it public or private.
It now falls on you to care for your mom, but since your daughter has type 1 diabetes you can’t relocate your family to where your mom lives unless you’re willing to shoulder the costs of your daughter’s treatment yourself. No insurer will touch you, so you’re stuck where you are despite the portability of your jobs.
So you clean out the spare bedroom in your mom’s house and move in with her and give her the care she needs. But since your family has to maintain its current residence to maintain its current health insurance policy, you only see your spouse and your daughter once a month.
See where this is going? It’s not a farfetched scenario. Until the passage of the ACA, your daughter’s diabetes would’ve essentially split up your family. How about that?
And that’s the benefit nobody talks about. For obvious reasons it has a heavy, heavy effect on your ability to work towards/achieve financial independence and early retirement.