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ObamaCare Clusterfuck: ObamaCare not so affordable for families at three and four times the poverty line

Who knew? Kaiser Health News:

The lure used to get uninsured Americans to sign up for health law coverage was the promise of generous premium subsidies.

But the promise comes with a catch for almost 3 million people earning between three and four times the federal poverty rate: They may have to pay up to 9.5 percent of their income toward that premium before the subsidy kicks in.

That could take a substantial bite from their budgets — potentially as much as $600 a month for mid-priced plan for a family of three earning between $58,590 and $78,120.

And that's before we talk about the high deductibles, the high co-pays, narrow networks, narrow formularies, and balance billing.

As a result, some middle-class families may decide health insurance is beyond their reach, and pay a penalty rather than buy coverage. While consumers in that income range account for a relatively small share of the 17.2 million eligible for subsidies to buy private insurance, that could still spell political trouble for the law. Insurers could also see problems if premium costs deter the sign-up of healthy enrollees, whom they need to offset the costs of covering the sick. ....

It’s too early to know the big-picture answer because consumers have until the end of March to buy coverage in the federal and state online marketplaces.

But individual families have begun making their decisions.

“Awfully high,” is the verdict of Tim Ross of Madison, Ind., the owner of a light commercial construction firm who canceled coverage for his family of five several years ago during the depths of the recession.

Under the health law, Ross’ income qualifies his family for a subsidy that would cover about half the cost of a mid-level “silver” plan, according to online calculators. There are five silver plans he could choose from, with his share of the cost ranging from $494 to $590 a month.

Ross, 47, would also be responsible for copays for doctor visits and prescriptions and an annual family deductible ranging from $4,000 to $7,000.

“I would love to have insurance,” said the small businessman, who knows he would take a big chance by remaining uninsured.

But he said he is likely to forego buying a policy, hoping that if a family member needs expensive care, he can negotiate lower prices with doctors and hospitals as he has done in the past.

“We are at the point in our lives where if we want to go out to supper,” he said, “we can. “If I want to buy my kid a pair of blue jeans, I can do that. If I had to pay $600 a month out of my income, we could no longer do that.”

Pretty amazing. Claw your way out of a Depression and save your small business, and have to choose between insurance and a night out with the family. Such reckless extravagance!

The law’s drafters set the 9.5 percent benchmark during final negotiations over the health law, mainly to meet a directive from the White House and congressional leadership that the law cost less than $1 trillion over 10 years and contain provisions to pay for that, which included new taxes and fees on drug makers, insurers and high-income Americans. The primary goal was to get the bill passed, not figure out what struggling middle-class families thought they could afford.

Well, naturally (and that's a pretty amazing statement coming from Kaiser Health News). How could Obama bail out the insurance companies if he didn't get the bill passed? Let's be reasonable, here.

The Bureau of Labor Statistics has found that the average household spent about a third of its income on housing, 17 percent on transportation and nearly 13 percent on food, the three largest categories, according to the Bureau of Labor Statistics. Health care accounted for nearly 7 percent, including premiums, drugs, doctor visits and medical supplies.

But averages aren’t how most families live.

The Economic Policy Institute, a ["progressive"] think tank in Washington, D.C., says that housing costs vary widely across the country. Two parents with one child living in Bowling Green, Ky., for example, would spend about $675 a month on housing, while a similar Los Angeles family would spend $1,421. Adding health premiums and deductibles to the plate can be tough – and many families have no savings.

“I would like to live in a world where people didn’t have to trade off health care versus putting food on the table,” said economist Elise Gould at the Institute. “Should it be fixed in the health care law? Or are there other things we could be doing so people don’t have to make those choices?

Why yes, Elise. Yes, there are. There are "things you could be doing." Single payer would eliminate all this random variation and make health care coverage truly universal. God, "progressives" suck. Such concern. Couldn't you just hear the concern? [gag. spew.]

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deborama's picture
Submitted by deborama on

I can't afford to pay $468/month for the CHEAPEST crappy bronze plan available to me in New Jersey, one that leaves me $12,000/year out of pocket after the premiums and deductible and doesn't let me use any of the best doctors and hospitals...this is over $150 more/month than I had been paying for an individual plan (that did not include mental health or prescription benefits, so it no longer "qualifies").

A single person gets no subsidy if you make (that is to say, GROSS) a penny over $45,960/year, which is PEANUTS in New Jersey. It is just incredible that this threshold level was not adjusted for the cost of living in the different states. People in the expensive states are getting totally slammed.

Let's take a a self-employed person in NJ (which I am) who dares to gross $45,961/year. On that they will pay $7,352 in federal income tax, $1,032 in state income tax, and $5,666 in FICA, making their annual net $31,641, or their monthly net $2,637. The average two-bedroom apartment in NJ rents for $1,420/month, so assuming this individual doesn't try to live in anything bigger than that (GOD FORBID!), that leaves them with $1,217/month. Now subtract the $468/month that Obama thinks is an "affordable" price for this person to pay for their health insurance premiums (remember, they still haven't gotten any actual health CARE for this money).

That leaves a whopping $749/month left over for food, utilities, car payment and gasoline, other insurance such as auto and tenant's (highest in the country), clothing, "savings" (what a joke!) and anything else. If you have to service a student loan ($700/month in my case) or actually need health care and end up paying that deductible, you'll be naked, starving and walking to work real fast to get out of your cold, dark apartment. And don't even think about having a companion animal or taking a vacation, you loser.

I just wanna know how anybody did this math and decided this was acceptable.

Alexa's picture
Submitted by Alexa on

remember, the main source of revenue TO PAY THE SUBSIDIES, is not the puny tax on "the wealthy," (as I understand it).

It is the surtax, or 'penalty' for NOT buying a plan.

I don't have access to the older laptop right now, but I've had the criteria for figuring out the percentage/formula used to determine the subsidy amounts.

For instance, in this formula, no allowance was given for a phone (ANY type of phone), or for one to have internet service. With all the talk about "broadband access," you would think that this expense would be "allowable."

And imagine holding down a job, but not having access to any kind of phone to contact one's employer in the event that a problem or illness crops up.

I've never figured out why 'grassroots' progressives didn't make an issue over the ridiculously low subsidies.

Although, I doubt it would do any good, for the reason that I just mentioned.

Alexa's picture
Submitted by Alexa on

IOW, the PtB consider a phone and internet service to be 'a luxury.'

Their argument, I suppose, would be that all of us who need health insurance should be willing to "give up" these luxury items or services, in order to afford to pay own health care premium.

What else can one take away from their formulation?

(Jerks!)

Personally, I would love to see the progressive blogging community, or better yet, the Democratic Party Base, take up the issue of "subsidy" insufficiency.

But I doubt that it will ever happen, in my lifetime.