Meg MacFadyen owner of Art & Invention Gallery in East Nashville is reflected in a mirror at the store.

-- Michelle Morrow | The Ledger

As owners of East Nashville’s popular Art & Invention Gallery, Meg and Bret MacFadyen are part of the city’s growing population of creatives, a group that includes entrepreneurs, artists, musicians, writers and all sorts of contractors.

But unlike the solopreneurs and freelancers who may see their health insurance premiums skyrocket in 2016 by as much as 36 percent, the MacFadyens are sticking with the policies they bought through their insurance carrier years ago.

It’s still reasonably affordable and still provides plenty of coverage, Meg MacFadyen says. And even if their carrier were raising premiums by 36 percent or 44 percent for many enrolled in Marketplace plans through the Affordable Care Act, non-Marketplace policies are not likely to be affected at all.

“Unfortunately for us, as self-employed people, we have always paid the premium price for insurance,” she says. “I know a lot of people who actually did buy the (ACA) insurance who now won’t be able to afford it again and are probably going to be uninsured again.”

Nearly 12 million Americans were enrolled in health insurance through the Health Insurance Marketplace in 2015, including more than 230,000 Tennesseans.

But officials say not enough young and healthy people are enrolled to even out rising health care costs, that many now enrolled were previously unable to obtain insurance because they had chronic, costly health conditions that would have rendered them ineligible.

Although the ACA was intended to make things easier for such people, the upshot has been that premiums keep going up and up.

The problem of affordability is growing, despite penalties assessed to those who would simply chose to avoid the confusion and skip health care altogether. Those, too, are going up.

In 2014, the penalty for not having insurance was 1 percent of your household income or $95 per adult, whichever was higher. This year, those fees rose to 2 percent or $325 per adult; and next year they will rise again to 2.5 percent of household income or $695 per adult.

Even small business owners with fewer than 51 full-time workers are exempt from the steep increases affecting three of the five Marketplace plans being offered in Tennessee in 2016. That’s because they can enroll themselves and their employees in SHOP (Small Business Health Options Program). As a group, they won’t be affected, as most carriers are basing medical-loss ratios on individual categories.

“We experienced a $141 million loss on this line of business,” says Mary Danielson of BlueCross BlueShield Tennessee, which accounts for about 70 percent of the Marketplace share in Tennessee.

Danielson notes that more than half of people enrolled through the Marketplace were previously uninsured. “For every dollar we received in premiums, we paid out $1.14 to cover medical care. Calculating for taxes and administrative costs, our actual loss was 35 cents on the dollar.”

With 3 percent of Marketplace enrollees driving 50 percent of the claims cost, the outcome was staggering.

“We expected about 1,000 of the members who were previously uninsured to have claims greater than 10 times the premium (greater than $30,000 in claims),” says Danielson. “We had about 3,000 of these members at this claims level. This additional 2 percent of higher-cost members resulted in an extra $80 million in claims costs.”

And as for subsidies helping to offset the rising costs for those individuals, they really only affect that segment who sometimes teeter between struggle and profitability from year to year.

Without a regular paycheck, the self-employed have to estimate their income for the coming year and hope that demand for their services will remain constant. If they find themselves earning more than they thought, they’ll have to revisit the Marketplace and report higher earnings, possibly losing any subsidies they might have qualified for.

And if they find themselves earning less, making them suddenly eligible for subsidies? They can report it, but they’ll have to wait until they file their federal income tax returns to see any financial relief.

Joe Smith knows the struggle is all too real for many people in his position but is lucky enough to have managed a thriving business for over 20 years. Before the ACA went into effect in 2014, Smith researched his options but found the website too difficult to navigate. He turned to an insurance broker in his neighborhood who sold him an ACA-compliant policy.

“Before the ACA, I was buying my own insurance,” says Smith, whose sole proprietorship, Art Dude Creative, does contract work in marketing and advertising.

“In 23 years of owning my own business, I didn’t have health insurance for the first seven or eight years at all. I did buy insurance for my children, which was horribly prohibitive.”

In Tennessee, any subsidies or help with premiums only applies to people earning below a certain level. For a single-person household, for instance, no help is available for anyone who earns more than $46,680.

That’s not a problem for Smith, whose income is not likely to fall that low and who, at 53, is in good health with no chronic health conditions.

He counts himself lucky that he typically only needs to schedule annual physicals with his doctor, but he finds the “affordable” part of the “Affordable Care Act” a little lopsided.

“That’s my only issue with this ACA,” he says. “I am the one who’s actually paying quite a bit more than I use.”