This article discusses how some older workers, previously tied to their jobs because of the health care the job provides, will now be able to leave their positions due to the ACA. Examples are given of folks striking out on their own now that insurance will be affordable.
From the article:
My question: Is 15 grand a year considered affordable (even with their income)? That still seems like a big chunk O money to me. I would have guess they would pay that much pre-ACA for health insurance.
The ACA pretty much defined “affordable” as 10% of household income. Or to be precise, 9.5% in most cases, ramping all the way down to 3% for families living just above the poverty line. Or 8% in the context of employer provided plans.
I can’t find a quick and easy reference on private market health insurance. But $15k per family is pretty much in line with the average cost of employer-provided health care costs. Here’s a study from KFF that says the average family health insurance premium in 2013 was $16,351. The employer usually pays the majority of that cost, so the employee only ends up paying $4565 on average.
Like I said I haven’t found similar data for the private insurance market. But everything I’ve heard leads me to believe that the costs are higher, the coverage is less, and sometimes it is impossible to obtain.
No, not really. It gets worse if you are older. A single person in their 50s who makes about 50k can expect to pay $500-800/month or so with no subsidies, so that is 20% of gross income just for premiums not including the deductibles and copays. A person could theoretically pay 30%+ of gross income under the ACA. That isn’t affordable at all.
HA!
I was paying **$1,200/month ** as a self-employed 50 year-old-man, with no pre-existing conditions. After my heart surgery, no insurance company would even underwrite me, at any cost.
In my last job, covering a family of four, we spent about $800 a month in premiums for an HMO type plan - that was OUR share - my employer picked up the rest.
I quit, my husband switched employers, and we went with a HDHP - much more reasonable.
But yeah, $15k a year isn’t out of line when it can be $800 a month AFTER employer subsidies.
We really haven’t gotten to "affordable (although you can carve out $15k pretty easy on a $150k income in much of the country - you might need to cut out the Spring Break vacation in Mexico) - but its “more affordable”
About fifteen years ago, the company I worked for started send us an end-of-year “Hidden Paycheck” statement. It listed our total compensation after adding the cost of company health benefits, insurance, retirement etc.
It was astounding to see how healthcare could cost many thousands of dollars a year - and made us realize that healthcare was not free.
(It softened the blow a bit to see the first COBRA bill for the two of us - for $958/month - when I was let go in 2009)
I’m glad you’re doing better under the ACA (a silver plan for a 50 year old may only be $400). But for a lot of people the subsidies are taken out when people still may need them. For someone earning 50k, again, they could end up spending 20% of gross income on premiums alone.
And, somewhere among the many news articles I read in the last week or two, I noticed that those low-income subsidies are only available if you income is at least 100% of the poverty line. If your income is less than that, you aren’t eligible for a subsidy. (Go figure.)
IIRC, I thought it said that such people were also exempt from the requirement to buy insurance. So people getting less than 100% of poverty level won’t have to pay the penalty if they don’t get insurance, but they probably won’t be able to afford any insurance either.
What is the logic of excluding the lowest-income people from the subsidy, who need it the most?
The intention is that all of the people at that income level would be covered by Medicaid in the state they reside. States are strongly encouraged to expand their Medicaid coverage (up to, off the top of my head 150% of the poverty line). The difference in cost was going to be guaranteed overwhelmingly paid by the federal government for some duration (again, off the top of my head, over 95% for 10 years). For the most part, the teeth of this provision were stripped by the Supreme Court’s ruling, so that in some states there will be no expansion of Medicaid coverage. This does mean that in some states, some people like the ones you’ve described will be exempt from the mandate but uncovered by any insurance.
This is one of the areas that the law could be meaningfully improved by a hypothetical congress that is capable of compromise.
Indeed, when a lot of democrats were cheering the ACA ruling, I was practically sobbing, as I realized that allowing ACA to go through with the mandate, but not forcing states to expand medicaid would result in tons of poor people uninsured. It would have been better to strike the whole thing down, IMHO, than to allow the mandate to occur for the vast majority of people, and the rest of the legislation, but not to force states to expand their medicaid coverage for the poorest people, who can’t afford coverage any other way.
Arkansas came up with a compromise for this. Poor people here will get fully subsidized insurance from the exchange. I believe several other states are doing this.
It may depend on whether the person has pre-existing conditions. If they do, then it may be that pre-ACA no money in the world would allow them to buy insurance privately. Given my wife’s health problems, 15 grand a year would be a steal under the old system.
That’s exactly it. Striking off on your own requires you to be able to finance your living expenses including health insurance. Not being able to get it at all (and I probably couldn’t) is a deal killer. My wife could do it because she was covered by my insurance.
It is possible that news coverage of the people who could have been covered by an expansion will either shame governments into going for it or cause a change in governments. Most of those people are no worse than before, though.
Meanwhile many people will benefit.
The best is the enemy of the good.
There are other provisions already in place to help with affordability, like forcing insurance companies to limit how much is not spent on customers, but true affordability is going to take a while. Evidence based medicine and the publication of costs for procedures across hospitals will surely help.
I don’t understand paying so much. I’m single male 60 y.o. buying my own coverage and have an 80/20 with oop capped at 13k a year and unlimited prescription coverage for 295.00 a month. Plans like that are all over sites like esurance, although they did send me a letter saying it’s going up 50$ a month cause of the ACA, but ACA is just going to make the market bigger and it sounds like I can keep it around 300$ just shopping around. But I still ain’t going to the DR unless I’m dragged there unconscious with blood dribbling the corner of my mouth and can’t stop them…
With luck ACA will do some good by flushing the whole mess down the toilet so we can start fresh.
I was covered under my wife’s COBRA until 2010, HMO, no deductible, no coinsurance, just copays; $500/mo for me. When COBRA ran out, the best quote I could get for a comparable policy was $1400/mo, for one person. That’s $16,800 a year.