Report: ACA's Effect on Insurance Premiums Varies by Income Level

[wanaberetiree]

Report: ACA's Effect on Insurance Premiums Varies by Income Level - California Healthline

"Report Findings
The report found that middle-income residents could see individual health plan premiums increase by an average of 30% and total health care costs increase by an average of 20% under the ACA.
However, families earning less than $60,000 annually could save up to 84% on premiums and 76% on total care costs with the help of federal subsidies, according to the report.
Researchers found that residents with annual incomes between 250% and 400% of the federal poverty level who currently are enrolled in individual plans will pay an average of 47% less when they have access to subsidies under the ACA (Terhune, Los Angeles Times, 3/28)."

 

[dgoldenz]

It's always been obvious that older people and those with health problems will be better off under the law at the expense of everyone else. This doesn't really say anything we didn't already know. Those over 400% of FPL that get no subsidy not only will pay much more for their coverage, but they are also the most likely to pay more taxes to fund the subsidies for everyone else, a double whammy. The insurance premiums are the same regardless of income, the only difference is who pays for it.

 

[pb4uski]

+1 It seems to me that the middle class (>400% FPL) gets screwed. Those under 400% FPL benefit greatly. And while the very wealthy pay more as well it doesn;t hurt them as much. Am I missing something?

 

[travelover]

........ Am I missing something?

If you have a catastrophic illness you don't have to go bankrupt?

 

[pb4uski]

If you have a catastrophic illness you don't have to go bankrupt?

If you are just over 400% FPL you go bankrupt paying health insurance premiums instead.

According to this calculator http://www.coveredca.com/resources/calculating-the-cost/

A 55 yo couple with $62,500 of income would not qualify for any subsidy and would pay $20,676 (33% of their gross income) in health insurance premiums.

Are you actually defending that outcome?

 

[gerrym51]

If you are just over 400% FPL you go bankrupt paying health insurance premiums instead.

According to this calculator Health Insurance Calculator | Covered California

A 55 yo couple with $62,500 of income would not qualify for any subsidy and would pay $20,676 (33% of their gross income) in health insurance premiums.

Are you actually defending that outcome?

i think you are just doubling a single. I live in mass. and actually have bought from the connector here. depending on what plan you buy-bronze-silver-gold

i bought a plan for a single-but i was looking at plus spouse and family.

it would be 12-14 thousand for a couple

still a lot of money and i am against the mandatory aspects of obamacare

 

[wanaberetiree]

A 55 yo couple with $62,500 of income would not qualify for any subsidy and would pay $20,676 (33% of their gross income) in health insurance premiums.

How did you get $20,676? I see the max premium as $12,800.

 

[pb4uski]

i think you are just doubling a single. I live in mass. and actually have bought from the connector here. depending on what plan you buy-bronze-silver-gold

i bought a plan for a single-but i was looking at plus spouse and family.

it would be 12-14 thousand for a couple

still a lot of money and i am against the mandatory aspects of obamacare

All I am doing is typing in household of 2, income of $62,500 and age 55. The resulting premium per month is $1,723 so 12 months would be $20,676, which is 33% of $60,500. The $1,723/month is the same as the Berkeley calculator.

 

[gerrym51]

How did you get $20,676? I see the max premium as $12,800.

you misread the calculator. it says 1700 dollars a month for the premium.


the 12,8oo is the out of pocket max. that is after premiums. it does not include them

 

[gerrym51]

All I am doing is typing in household of 2, income of $62,500 and age 55. The resulting premium per month is $1,723 so 12 months would be $20,676, which is 33% of $60,500. The $1,723/month is the same as the Berkeley calculator.

although i do not understand totally i went to the california calculator and confirmed what you said.

all i can say is HOLY ****!

 

[pb4uski]

How did you get $20,676? I see the max premium as $12,800.

The $20,676 is the $1,723 premium per month * 12 months.

The $12,800 is the maximum annual out of pocket cost (not including premium). Hover over the blue Out-of-Pocket Limit.

So if this family had a health event that went to their OOP limit they would pay 54% of their gross income for health care. Outrageous.

 

[gerrym51]

The $20,676 is the $1,723 premium per month * 12 months.

The $12,800 is the maximum annual out of pocket cost (not including premium). Hover over the blue Out-of-Pocket Limit.

So if this family had a health event that went to their OOP limit they would pay 54% of their gross income for health care. Outrageous.

i agree the calculator suggests this amount. I cannot believe it is correct. California must be super expensive

 

[JoeWras]

The $20,676 is the $1,723 premium per month * 12 months.

The $12,800 is the maximum annual out of pocket cost (not including premium). Hover over the blue Out-of-Pocket Limit.

So if this family had a health event that went to their OOP limit they would pay 54% of their gross income for health care. Outrageous.

And it is not difficult to have such a health event. For example, a trip to the hospital for some bad torso pains that you think may be a heart attack, but instead are just kidney stones that are eventually passed, could put you at the limit. Not hard to do at all.

 

[pb4uski]

i agree the calculator suggests this amount. I cannot believe it is correct. California must be super expensive

It seems credible to me in that the $1,723 is 2-3 times what I am paying now in a no underwriting state and that is the rough magnitude of increases in premiums that some pundits are expecting.

I hope I am wrong.

 

[MichaelB]

Under our current system individuals enjoy low premiums until they need health care or show certain conditions, then they are either charged outrageous premiums or simply denied coverage. Those in large groups enjoy competitive premiums others are denied. Those without coverage are exploited by providers that charge far higher prices for the same service. To say that the old and sick will benefit at the expense of others is quite disingenuous when for so many years those others have been the ones with the advantage. .

This will be a very difficult adjustment for all of us.

 

[bondi688]

A scenario where a couple making $62500 paying $20672, a third of their income for health insurance premium, has to be hypothetical, because they will be getting health insurance coverage at work and the employers pick up a substantial part of the group rate.

But that said, there may come a point when the employers say that they cannot afford to continue to pay for those health insurance coverage for employees, and then everyone will be facing the true cost of paying for health care.

 

[kmt1972]

What is in that calculator is nothing compared to NY state. See

Stephen T. Parante and Tarren Bragdon: Why Health Care Is So Expensive in New York - WSJ.com

and

http://www.nydailynews.com/life-sty...0-000-year-state-data-shows-article-1.1144838

Because of community rating and guaranteed issue the NY state health insurance market are just filled with people that are very ill since insurance companies cannot deny them coverage or charge them differently. BTW, this is just like what Obamacare will want to do except NY state does not have "tax" for no health care coverage. Most people in NY state, unless these prices come down, will just pay the "tax" if they do not have coverage and could not get it via a company. Hopefully the exchanges as part of Obamacare will work to lower the prices but I doubt it.

 

[gerrym51]

A scenario where a couple making $62500 paying $20672, a third of their income for health insurance premium, has to be hypothetical, because they will be getting health insurance coverage at work and the employers pick up a substantial part of the group rate.

But that said, there may come a point when the employers say that they cannot afford to continue to pay for those health insurance coverage for employees, and then everyone will be facing the true cost of paying for health care.

this scenario has nothing to do with employers. this is the price the california calculator gives for someone purchasing through the obamacare exchange

 

[kmt1972]

Of course the discontinuous nature of Obamacare subsidies also will lead to all sort of economic distortions. Just put in family of 3, income of 78120, and age of 55. The put in income of 78121. Monthly cost jumps from 618 to 1723. Granted the higher cost can be deducted from federal income tax. But one way or another from 78120 to 78121 this faimily faces a massive marginal tax rate.

 

[gerrym51]

the reason i think the calculator is wrong.

I live in massachusettes which already has Romneycare.

i just turned 62 and purchased a single policy on the exchange.

i bought a silver plan.

it is 575 dollars a month with a 2000 deductible and 4000 max out of pocket.

massachusettes requires everything be covered like Obamacare that copies it.

California has to be super expensive?

 

[FIREd]

i agree the calculator suggests this amount. I cannot believe it is correct. California must be super expensive

Yes, the prices on that CA calculator are eye-popping. Coupled with the high cost of living, it makes me wonder whether we can afford to stay in CA after DW retires.

 

[bondi688]

this scenario has nothing to do with employers. this is the price the california calculator gives for someone purchasing through the obamacare exchange

But that couple would be buying health insurance at their work place and not at the exchange.

What I was saying is if and when employers decided that they cannot afford to continue to pay for work place health insurance for employees, then every one has to buy insurance from the exchange. And if those are the rates, I cannot see how a lot of family can afford health insurance coverage.

 

[bondi688]

Then what is the point of bringing in the ACA when at the end of the day, even if health insurance policy is available for every one to purchase at those exchange, people cannot afford to pay the premium, if those are the rates? People will still be uncovered. They may have to pay the fine like presently in MA instead.

 

[Mulligan]

Then what is the point of bringing in the ACA when at the end of the day, even if health insurance policy is available for every one to purchase at those exchange, people cannot afford to pay the premium, if those are the rates? People will still be uncovered. They may have to pay the fine like presently in MA instead.

If I understand the penalty for not buying insurance correctly, it can only be collected by confiscating tax refunds. If I wasn't going to buy health insurance, I would make darn sure my withholding forms were set up in a way where I am sending a check instead of a refund. It is hard to imagine much income flowing to the treasury by the penalty process. If I was married and making $70k, there is no way I would pay a third of my income to health insurance. I keep hearing these potential numbers, and I just can't wrap my head around it. If I ever get thrown into the exchange and the premiums are as high as being thrown around here, I better stay nice to my GF. I have a standing offer to get married and jump on her companies subsidized plan of about $200 a month with a very small deductible.

 

[bondi688]

Mulligan
In MA, if you do not carry health insurance, you forfeit your personal deduction of the state income tax , so you do pay a higher amount of state tax as penalty. But that is a tiny amount compared to the outlandish premium in CA and NY. Yes, you will be better off not buying health insurance, and just pay the penalty. And I suspect that is what will happen in CA and NY, especially among younger people, if those premium rate is accurate.
So the problem of a segment of people not having health insurance remains unsolved by the ACA.