PPACA, Obamacare and General Comments

[MichaelB]

Quote:

Originally Posted by Buckeye Using this calculator, the family cost is the same regardless of how many are purchasing insurance. This makes sense because the family outlay is determined by percentage of MAGI. This makes me conclude things will get more expensive when DH goes on Medicare/Medigap because those costs are not included in the subsidized amount and the premium for my coverage as an individual is already over the amount that is being subsidized. For example, if I create a scenario using income of $45,000, our monthly subsidized premium is $346 for a Silver policy for both of us. When DH goes on Medicare, the subsidized premium for an individual policy for me is still $346 but now we are also paying for Medicare and some sort of Medigap policy. Our monthly costs go up by the cost of Medicare and Medigap premiums. Interesting.

And painful. Your example is probably correct, family policies appear priced that way.

[ERhoosier]

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Originally Posted by MichaelB Yes to the 'real" out of pocket, which is the total OOP plus the premium cost. Not sure what the least expensive option is, it would depend on the difference in premium between policy options. Still, it is easier to compare.

IIUC, the various "metal levels" to be offered in the Exchanges will differ mainly (only?) in the "actuarial value" of each plan's benefits. The "scope" of benefits for all plans would be set by a "benchmark" determined by each state & HHS.
http://www.healthcare.gov/news/facts...11202012a.html
My guess is that, at least initially, consumers will be picking plans based on low price for the given "metal level". Insurers, under this pricing pressure, will be offering little or no additional benefits beyond the benchmark to keep their respective "metal level" plans near the lowest prices in that state's Exchange.
From what we know now, is that a reasonable assessment or am I out in left field

[Buckeye]

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Originally Posted by MichaelB And painful. Your example is probably correct, family policies appear priced that way.

I'm okay with the situation. Painful is when you are 30 years old making $25,000 a year with a pre-existing condition that is no fault of your own and no one will sell you health insurance.

[ShortInSeattle]

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Originally Posted by haha Since when are you supposed to be wealthy to pay for your own health insurance? How quickly perceptions morph. Ha

DH and I were out for a walk today and had the same thought talking this issue through. While it might be only human to feel a stab of annoyance when you are "somewhat" over the subsidy cutoff, the truth is that we (and most FIRE folks) are well off compared to most Americans. IMO, we have no right to feel entitled to subsidies for those who may truly NEED help.

I don't begrudge anyone for taking advantage of the subsidies if they qualify. But I hope that if DH and I don't qualify we can stifle that "human" reaction to gripe and instead feel pleased that we can provide for ourselves.

SIS

[pb4uski]

Quote:

Originally Posted by Buckeye Using this calculator, the family cost is the same regardless of how many are purchasing insurance. This makes sense because the family outlay is determined by percentage of MAGI. This makes me conclude things will get more expensive when DH goes on Medicare/Medigap because those costs are not included in the subsidized amount and the premium for my coverage as an individual is already over the amount that is being subsidized. For example, if I create a scenario using income of $45,000, our monthly subsidized premium is $346 for a Silver policy for both of us. When DH goes on Medicare, the subsidized premium for an individual policy for me is still $346 but now we are also paying for Medicare and some sort of Medigap policy. Our monthly costs go up by the cost of Medicare and Medigap premiums. Interesting.

But at the end of the day if you are 400% FPL or below, your health insurance cost will be based on your income, not on the premiums before subsidy. So in the scenario that you created, I think your subsidy would go up to cover the Medicare premium so your net health insurance cost would stay the same since your income hasn't changed.

I'm not sure how the Medigap would work but if Medicare and Medigap was the equivalent of a Silver plan then it might cover the Medigap premium as well.

[MichaelB]

Quote:

Originally Posted by ERhoosier IIUC, the various "metal levels" to be offered in the Exchanges will differ mainly (only?) in the "actuarial value" of each plan's benefits. The "scope" of benefits for all plans would be set by a "benchmark" determined by each state & HHS. Essential Health Benefits, Actuarial Value, and Accreditation Standards: Ensuring Meaningful, Affordable Coverage | HealthCare.gov My guess is that, at least initially, consumers will be picking plans based on low price for the given "metal level". Insurers, under this pricing pressure, will be offering little or no additional benefits beyond the benchmark to keep their respective "metal level" plans near the lowest prices in that state's Exchange. From what we know now, is that a reasonable assessment or am I out in left field

Excellent point, and you have a good view of what will probably happen (imho). The policies must all meet certain requirements and offer a list of essential health benefits, so while in theory they can all be different, in reality pricing pressures will likely drive them to all compete at the minimum.

[MichaelB]

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Originally Posted by pb4uski But at the end of the day if you are 400% FPL or below, your health insurance cost will be based on your income, not on the premiums before subsidy. So in the scenario that you created, I think your subsidy would go up to cover the Medicare premium so your net health insurance cost would stay the same since your income hasn't changed. I'm not sure how the Medigap would work but if Medicare and Medigap was the equivalent of a Silver plan then it might cover the Medigap premium as well.

I don't think so. The Medicare and Medigap policies are neither covered nor considered by the state exchange. In a family policy at the exchange the total cost might decline but the premium assistance falls as well and the net cost remains the same (Berkeley calculator), but the cost of Medicare plus supplemental is a net addition. The cost here definitely increases.

[bUU]

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Originally Posted by teejayevans Right, but the US Govt (who's here to help ) is suppose to have a federal exchange for those states that don't participate, but rumour has it they are behind schedule, heck it's only been 3 years

The rumors are that the exchanges that are not quite ready to go live are such because the development and deployment efforts were underfunded. As with most other things in the government, politicians work to deliberately sabotage the efforts related to initiatives that they personal opposed but failed to prevail in their opposition.

It's kind-of how the Soviets won the Olympic gold medal in basketball in 1972.

[pb4uski]

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Originally Posted by MichaelB I don't think so. The Medicare and Medigap policies are neither covered nor considered by the state exchange. In a family policy at the exchange the total cost might decline but the premium assistance falls as well and the net cost remains the same (Berkeley calculator), but the cost of Medicare plus supplemental is a net addition. The cost here definitely increases.

Ah ha. So the family unit with one person on the exchange and one person on Medicare pays more compared to two 64 year olds because the net cost of the exchange policy considers the income of both people in calculating the subsidy but ignores the Medicare premium? That's stoopid.

[travelover]

Quote:

Originally Posted by bUU The rumors are that the exchanges that are not quite ready to go live are such because the development and deployment efforts were underfunded. As with most other things in the government, politicians work to deliberately sabotage the efforts related to initiatives that they personal opposed but failed to prevail in their opposition. It's kind-of how the Soviets won the Olympic gold medal in basketball in 1972.

That's how it has worked here in Michissippi. First we had to wait for the Supreme court decision, then we had to wait for the election. Now I guess we are waiting for permission from wealthy puppeteers.

[mpeirce]

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Originally Posted by bUU The rumors are that the exchanges that are not quite ready to go live are such because the development and deployment efforts were underfunded. As with most other things in the government, politicians work to deliberately sabotage the efforts related to initiatives that they personal opposed but failed to prevail in their opposition.

"Never ascribe to malice that which is adequately explained by incompetence."

-- Napoleon (or variously Heinlein)

[bUU]

I have reason to know that it isn't (only) incompetence.

[Chuckanut]

I have a feeling that PPACA will free a lot of people from jobs and positions that are not right for them. Many people are forced to hang on to a job they do not care for because they or a dependent need the medical insurance. With PPACA they will be free to change to a more appropriate job or, perhaps, pursue, entrepreneurial opportunities. Either way, our economy should benefit. This is a hunch, but I think it is a logical one. My 2 cents.

[sengsational]

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Originally Posted by Chuckanut I have a feeling that PPACA will free a lot of people from jobs and positions that are not right for them. Many people are forced to hang on to a job they do not care for because they or a dependent need the medical insurance. With PPACA they will be free to change to a more appropriate job or, perhaps, pursue, entrepreneurial opportunities. Either way, our economy should benefit. This is a hunch, but I think it is a logical one. My 2 cents.

Probably true for pre-existing medical condition entrepreneurs. But the healthy ones? The prices might scare them away.

[MichaelB]

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Originally Posted by mpeirce "Never ascribe to malice that which is adequately explained by incompetence." -- Napoleon (or variously Heinlein)

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Originally Posted by bUU I have reason to know that it isn't (only) incompetence.

If anything, Hofstadter's Law.

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It always takes longer than you expect, even when you take into account Hofstadter's Law

[Htown Harry]

Has anyone come across age-specific advice giving details on how young adult eligibility and premiums will be figured through the exchanges?

Consider this no-so-hypothetical ER scenario...

Married parents are in their 50's, with DH's employment HI providing family coverage for the couple. There is a 19-year-old child in college and another self-sufficient 24 y.o. child presently qualifying for the "under 26 on his parents policy" provision in the ACA.

If the parents begin early retirement in 2014, from the IRS link posted I think it's clear that just as long as he remains a dependent on the parents tax return the 19 y.o. will be part of the household and therefore an exchange-eligible insured as part of the family.

It's not so clear for the older child. I have seen information on under-30's being eligible for a lower-premium, high deductible catastrophic policy, for example on the KFF calculator page:

Quote:

Children and young adults under age 30 are eligible to purchase catastrophic coverage. Catastrophic coverage does not provide coverage for essential health benefits until you reach the annual limit on cost sharing ($12,500 in 2014).

The reason I ask is the Colorado / Berkeley and KFF calculators have very different input screens for children. KFF has a single check-box for "children 20 and younger". The other calculator has one box for "under 21" and a second for "children 21-15".

I ran a scenario on the Colorado calculator for a 3-person, $60,000 household with two 55 y.o.'s and a 19 y.o. The premium after subsidy was $475 /mo. ($1468 unsubsidized). Adding in a 24 y.o. while keeping the rest of the entries the same, the unsubsidized premium goes to $1756 and the premium after subsidy remains $475.

Restating these numbers, the government subsidy covers 100% of the 24 y.o.'s incremental cost of $288.

When I plug in a solo 24 y.o. at $20,000 income I get a $288 unsubsidized Silver premium, but the 24 y.o.'s premium after subsidy is $85.

I found no data on catastrophic policy premiums, but it's won't be zero.

My takeaway: I cannot see a scenario where it makes sense to do anything other than keep a 24 y.o. on the family policy.

[Buckeye]

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Originally Posted by pb4uski Ah ha. So the family unit with one person on the exchange and one person on Medicare pays more compared to two 64 year olds because the net cost of the exchange policy considers the income of both people in calculating the subsidy but ignores the Medicare premium? That's stoopid.

Well, the only reason things get more expensive in the second scenario is because Medicare and Medigap are not subsidized. Whether things get more expensive compared to when there was no subsidy and I'm the only one on the policy is another story.

[Buckeye]

Quote:

Originally Posted by Htown Harry Has anyone come across age-specific advice giving details on how young adult eligibility and premiums will be figured through the exchanges? Consider this no-so-hypothetical ER scenario... Married parents are in their 50's, with DH's employment HI providing family coverage for the couple. There is a 19-year-old child in college and another self-sufficient 24 y.o. child presently qualifying for the "under 26 on his parents policy" provision in the ACA. If the parents begin early retirement in 2014, from the IRS link posted I think it's clear that just as long as he remains a dependent on the parents tax return the 19 y.o. will be part of the household and therefore an exchange-eligible insured as part of the family. It's not so clear for the older child. I have seen information on under-30's being eligible for a lower-premium, high deductible catastrophic policy, for example on the KFF calculator page: The reason I ask is the Colorado / Berkeley and KFF calculators have very different input screens for children. KFF has a single check-box for "children 20 and younger". The other calculator has one box for "under 21" and a second for "children 21-15". I ran a scenario on the Colorado calculator for a 3-person, $60,000 household with two 55 y.o.'s and a 19 y.o. The premium after subsidy was $475 /mo. ($1468 unsubsidized). Adding in a 24 y.o. while keeping the rest of the entries the same, the unsubsidized premium goes to $1756 and the premium after subsidy remains $475. Restating these numbers, the government subsidy covers 100% of the 24 y.o.'s incremental cost of $288. When I plug in a solo 24 y.o. at $20,000 income I get a $288 unsubsidized Silver premium, but the 24 y.o.'s premium after subsidy is $85. I found no data on catastrophic policy premiums, but it's won't be zero. My takeaway: I cannot see a scenario where it makes sense to do anything other than keep a 24 y.o. on the family policy.

Wouldn't you have to count the 24 year old's income if you are going to make them part of the family? The increase in income may have the effect of reducing or eliminating the subsidy.

[Buckeye]

Quote:

Originally Posted by Chuckanut I have a feeling that PPACA will free a lot of people from jobs and positions that are not right for them. Many people are forced to hang on to a job they do not care for because they or a dependent need the medical insurance. With PPACA they will be free to change to a more appropriate job or, perhaps, pursue, entrepreneurial opportunities. Either way, our economy should benefit. This is a hunch, but I think it is a logical one. My 2 cents.

+1, but I think it will be more ER's than entrepreneurs.

[Katsmeow]

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Originally Posted by Buckeye Wouldn't you have to count the 24 year old's income if you are going to make them part of the family? The increase in income may have the effect of reducing or eliminating the subsidy.

The language quoted in Post 36 does seem to suggest that you count the income of everyone.