ACA trouble. Appeals court rules subsidies illegal

[Fermion]

I don't have an ACA plan but looked at them on the exchange out of curiosity. The impression that I got was that the deductibles and OOP maxes were pretty high. Did you get a platinum plan?

I think it is the cost sharing, which can be pretty huge if you manage to skate just barely above poverty level and Medicaid.

The actuarial value of even a silver plan goes up to something like 94% with cost sharing.

 

[aaronc879]

I think it is the cost sharing, which can be pretty huge if you manage to skate just barely above poverty level and Medicaid.

The actuarial value of even a silver plan goes up to something like 94% with cost sharing.

I have a silver plan and have a $500 deductible and $500 OOP max. If I make too much or too little money you can add a zero to the end of both those numbers.

 

[Rpharmer]

I don't have an ACA plan but looked at them on the exchange out of curiosity. The impression that I got was that the deductibles and OOP maxes were pretty high. Did you get a platinum plan?

No, a Silver plan -- that's the only way to get the very low OOP costs via the cost-sharing. The ideal MAGI, though, is around $14K, if I remember right. Since my only taxable income is from CD interest, I was able to swing that.
I make up any income deficit with a Roth conversion, which is an added bonus in its own right. A pretty sweet deal, for a long as it lasts anyway.

 

[donheff]

I never really picked up on the cost sharing component. That does sound like a big deal for low income people. Actually makes HC "affordable." That makes me a bigger fan of Obamacare even though I am footing some of their bill since I am in a highish bracket. Does it phase out gradually or do you fall off a cliff at some income threshold?

 

[samclem]

I never really picked up on the cost sharing component. That does sound like a big deal for low income people. Actually makes HC "affordable."

Just a nit to pick: The subsidy might make health care affordable to that individual, but the subsidy will not make health care affordable in the larger sense (i.e. reduce US health care spending). As far as the impact of the entire law on US overall health care costs, that is still an open question, but when I hear that the law "makes health care affordable" it is obvious that a lot is being swept under the rug by omitting the "individually" affordable clarification. Maybe this will be a case where pumping a lot of new money into a set of commodities will lower their price (?), or maybe price controls will, this time, not lead to shortages. If so, it will be a case that will fascinate economists and require some adjustments to long held understandings of how things work.

 

[donheff]

Just a nit to pick: The subsidy might make health care affordable to that individual, but the subsidy will not make health care affordable in the larger sense (i.e. reduce US health care spending). As far as the impact of the entire law on US overall health care costs, that is still an open question, but when I hear that the law "makes health care affordable" it is obvious that a lot is being swept under the rug by omitting the "individually" affordable clarification. Maybe this will be a case where pumping a lot of new money into a set of commodities will lower their price (?), or maybe price controls will, this time, not lead to shortages. If so, it will be a case that will fascinate economists and require some adjustments to long held understandings of how things work.

I agree. We are a long way from seeing whether the ACA can bend the total cost curve. But I had previously thought that the insurance plans I saw on the exchanges left people with large potential out of pocket cost which has traditionally been the case for the self insured (high deductible, high OOPMax). While this is "affordable" for the moderately well to do it seems a tough burden on pay-check to pay-check people and could keep them away from the doctors office when they most need to visit. The cost sharing subsidies in the ACA as described here sound like they significantly lower that burden for low income folks, including not a few ERers. I have always been a fan of single payer to do away with that burden. But to the extent that the ACA can reduce the out of pocket burden it in those least able to absorb it I am glad to hear about it.

 

[footenote]

I never really picked up on the cost sharing component. That does sound like a big deal for low income people. Actually makes HC "affordable." That makes me a bigger fan of Obamacare even though I am footing some of their bill since I am in a highish bracket. Does it phase out gradually or do you fall off a cliff at some income threshold?

You get more subsidy the lower your MAGI is (until you go below the Medicaid line). You gradually get less subsidy as your MAGI goes up, until you get zero subsidy.

You can estimate those levels for your state, your family, your age(s) and various projected MAGI levels using this Kaiser ACA subsidy calculator: Subsidy Calculator | The Henry J. Kaiser Family Foundation

 

[modhatter]

Using just the word subsidy can be confusing as there are two. One is a premium subsidy. The other is the cost sharing subsidy. Most people are aware of the premium subsidy, but surprisingly many (especially the poor) are unaware of the cost sharing subsidy, which is even more significant.

I have frequently had people come on another health forum, bashing Obamacare's affordability because of the high deductibles and out of pocket costs. They don't know that with the Silver plan the deductible, the max OOP, along with all costs are greatly reduced. Even your drugs. They do not publish these numbers because it is tied to your exact income, so you need to. apply to get the final numbers. But as an example. Someone making only $17,000 a year gets approx. 87% of all costs abated.

The problem is, half of the people who are entitled don't even know about it and don't sign up because no one gets to explain it to them unless they inquire about a policy, and they won't apply because they think they can't afford it or because they don't like the name attached to it.

I do feel that the mark was missed in this area in getting the word out. There was a lot of information and self education required in understanding the new healthcare bill, and I'm afraid many were not up to the task.

 

[EastWest Gal]

I have no idea why healthcare is so expensive anyway. In 2007, DS had a plate put in with 6 screws. It was all made of titanium. We were billed ~$180/screw. I forget what the plate cost--probably a whole lot more. Current price for titanium is $6.10/100 gm. For a < 1 gm gm screw that is about 5 cents raw material. It's a fricken screw, for God's sake!. Anyway, we/insurance (about 50/50) paid not only $180 per screw but also $180 per drill bit, one for each screw hole.

I wish I were in that OR watching the surgery--wonder if a different drill bit was used in each hole. If not, it was fraud. If they used a different drill bit, then why.

3 days ago we got the plate taken out, because ever since then DS has had horrible reactions to metal buttons, metal snaps, and pain where the plate is if he bumps the arm.

They gave us the plate--a tiny thing, and the screws. The whole thing weighs 6 gm. So we paid over a thousand dollars for 30 cents of material, molded in a simple plate, and autoclaved for sterility.

This is a ripoff. The hospital and the supplier got to keep the extra ridiculous amount of money. The doctors get paid their fee--also too high IMHO. I am a doctor. Pediatricians charge about $70 for an outpatient visit, more for check-ups.

Not only that, we couldn't find out the cost up front.

 

[travelover]

...........
Not only that, we couldn't find out the cost up front.

Ah yes. What a beautiful business model.

 

[razztazz]

Originally Posted by EastWest Gal View Post
...........
Not only that, we couldn't find out the cost up front.
Ah yes. What a beautiful business model.

That's the "free market"

 

[aaronc879]

That's the "free market"

That's why I cringe every time I hear the term "free market".

 

[pb4uski]

....But I had previously thought that the insurance plans I saw on the exchanges left people with large potential out of pocket cost which has traditionally been the case for the self insured (high deductible, high OOPMax). ...

While the cost subsidies make these high deductibles and co-pays more affordable, even if they didn't exist the insurance is a good thing given the high cost of health care.

For example, in my state one can get an unsubsidized, catastrophic policy for ~$215/month with a $6,350 OOP Max. Let's say you had a health event tht cost $35k. IMO no matter what your station in life it is much better to owe $6,350 than $35k especially if the cost of protection is $2,600 a year, and that is unsubsidized.

People need to get the idea that health care is free out of their heads. ACA is an attempt by society to make it more affordable but is it still expensive.

It seems to me that health insurance is reverting to what it was back in the 50s - it doesn't cover every little thing.... that cost is on the individual... but it protects people from the financial cost of an expensive health event. It is good that they have made well visits free so people don't cheap out on preventative care.

 

[pb4uski]

That's why I cringe every time I hear the term "free market".

Let's be fair. There are plenty of things that are free market when you can shop for and know the cost of before you purchase so it isn't the fact that medical services are free market that is the problem. Medicine needs to and is heading in the direction of being more transparent albeit frustratingly slowly.

 

[Fermion]

I have no idea why healthcare is so expensive anyway. In 2007, DS had a plate put in with 6 screws. It was all made of titanium. We were billed ~$180/screw. I forget what the plate cost--probably a whole lot more. Current price for titanium is $6.10/100 gm. For a < 1 gm gm screw that is about 5 cents raw material. It's a fricken screw, for God's sake!. Anyway, we/insurance (about 50/50) paid not only $180 per screw but also $180 per drill bit, one for each screw hole.

I wish I were in that OR watching the surgery--wonder if a different drill bit was used in each hole. If not, it was fraud. If they used a different drill bit, then why.

3 days ago we got the plate taken out, because ever since then DS has had horrible reactions to metal buttons, metal snaps, and pain where the plate is if he bumps the arm.

They gave us the plate--a tiny thing, and the screws. The whole thing weighs 6 gm. So we paid over a thousand dollars for 30 cents of material, molded in a simple plate, and autoclaved for sterility.

This is a ripoff. The hospital and the supplier got to keep the extra ridiculous amount of money. The doctors get paid their fee--also too high IMHO. I am a doctor. Pediatricians charge about $70 for an outpatient visit, more for check-ups.

Not only that, we couldn't find out the cost up front.

On the flipside, if there had been some contamination in those screws or plate or defect which caused your DS to become seriously ill or die, would your lawyer be ok to settle a lawsuit for just the $180 per screw refund?

 

[GTFan]

I agree with what you say f the state wants to work with the Fed. I suspect they can fairly easily work around the problem in that case. I think that may apply to about 1/3, maybe even 1/2, of the states not operating their own exchanges. The rest will laugh as the subsidies disappear. They don't want the Feds paying for Medicaid, they won't want them paying for subsidies. And along with the subsidies would go employer mandates and penalties. Those blows to Obamacare will be irresistible to states that strongly object to it. We already have health care have and have not states -- if sustained, the DC Circuit analysis would make that an order of magnitude worse.

The huge flaw to this argument is that it was easy for the politically polarized states to reject Medicaid expansion because it was a new benefit that no one was getting. Now that everyone is getting subsidies it is a big stretch to say that it would be just as easy to take something away that has already been provided.

This is just a bump in the road for the ACA, IMO - the ship has sailed just as it did for Social Security and Medicare. Even if it goes to the Supremes I can't see them taking away the underpinning of the law a few years after doing the questionable 'tax' interpretation to make sure it stood in place. Chief Justice Roberts isn't going anywhere anytime soon, and he was the swing vote in the 2012 decision.

 

[samclem]

I do feel that the mark was missed in this area in getting the word out. There was a lot of information and self education required in understanding the new healthcare bill, and I'm afraid many were not up to the task.

This has been the most widely and thoroughly discussed legislation in my lifetime. The internet makes information "pull" easier than it has ever been. 1-800 numbers and on-call assistance allow information to be provided to people who will not use the internet. If there's a failure of people to understand this law it is not due to "failure to get the word out", it is because of some combination of 1) failure of some people to make an effort to educate themselves and/or 2) the system is not readily understandable

 

[Senator]

GTFan: This is just a bump in the road for the ACA, IMO - the ship has sailed just as it did for Social Security and Medicare. Even if it goes to the Supremes

Exactly. Congress can change the law, making it non-ambiguous. Then, the issue is resolved. The Judges did the right thing. If the law is not 100% clear, it goes to the least restrictive interpretation.

What might be a problem is getting a Dr Appointment at some time. The VA is not the only one that will have a shortage of Doctors.

To lessen the shortage, we could open up many more medical schools, and give free education to anyone that want to be a Dr. It really doesn't take that much knowledge to be a doctor for a specific area, it's the long hurdle getting to that point makes it tough.

Do we really need that much education to pull out a set of tonsils? Most operations could be handled by a much lower level nurse, rather than a Dr. Maybe even a robot.

 

[modhatter]

This has been the most widely and thoroughly discussed legislation in my lifetime. The internet makes information "pull" easier than it has ever been. 1-800 numbers and on-call assistance allow information to be provided to people who will not use the internet. If there's a failure of people to understand this law it is not due to "failure to get the word out", it is because of some combination of 1) failure of some people to make an effort to educate themselves and/or 2) the system is not readily understandable

Actually Samclem. I disagree. Most people were aware that the bill afforded a premium subsidy to lower income folks. However, the cost sharing subsidy was not widely spoken of, and there were not a lot of sites that explained it in full detail that was understandable, nor a lot of media coverage about it specifically.

As for the ease of using those 800 numbers, I don't know what state you hail from, but where I was involved in helping someone get information and signed up and calling an 800 number, I was put on hold for hours. Tried three times, same problem. Got a recording stating that someone could get back to me in a couple of days ( never did) When I finally did make contact, I was told they could not give me any numbers until I completed application and all numbers were submitted on my end. So easy - NO, and I am one persistent puppy who doesn't have to go to work.

I will agree with you on one point. There were also a number of people who didn't care enough to get the information. What percentage they represented, I couldn't say.

 

[Brat]

I think there are a lot of people who have no idea about how to start with all of the details. Just because the information is available doesn't mean that many have the skills/knowledge of how to use it.

 

[MooreBonds]

I have no idea why healthcare is so expensive anyway. In 2007, DS had a plate put in with 6 screws. It was all made of titanium. We were billed ~$180/screw. I forget what the plate cost--probably a whole lot more. Current price for titanium is $6.10/100 gm. For a < 1 gm gm screw that is about 5 cents raw material. It's a fricken screw, for God's sake!. Anyway, we/insurance (about 50/50) paid not only $180 per screw but also $180 per drill bit, one for each screw hole.
...
They gave us the plate--a tiny thing, and the screws. The whole thing weighs 6 gm. So we paid over a thousand dollars for 30 cents of material, molded in a simple plate, and autoclaved for sterility.

This is a ripoff. The hospital and the supplier got to keep the extra ridiculous amount of money. The doctors get paid their fee--also too high IMHO. I am a doctor. Pediatricians charge about $70 for an outpatient visit, more for check-ups.

Do you have a "hard time" understanding why a car windshield - composed primarily of sand, which costs a whopping $.06/lb - costs hundreds of dollars?

Do you have a hard time understanding why a microprocessor costs hundreds of dollars, yet is only composed of raw materials that costs a few bucks?

Perhaps you have found a new business opportunity. Simply manufacture titanium plates and screws with a press in your garage in your spare time, and you'll be able to make a mint!

 

[Fermion]

Do you have a "hard time" understanding why a car windshield - composed primarily of sand, which costs a whopping $.06/lb - costs hundreds of dollars?

Do you have a hard time understanding why a microprocessor costs hundreds of dollars, yet is only composed of raw materials that costs a few bucks?

Perhaps you have found a new business opportunity. Simply manufacture titanium plates and screws with a press in your garage in your spare time, and you'll be able to make a mint!

+1

Similar thing for drugs. Why does a wonder drug that only costs $3 in chemicals to manufacture cost tens of thousands of dollars?

Why not make the cure yourself then? Ignore the fact that 10,000 compounds fail for every one that gets approved...

 

[Mulligan]

+1

Similar thing for drugs. Why does a wonder drug that only costs $3 in chemicals to manufacture cost tens of thousands of dollars?

Why not make the cure yourself then? Ignore the fact that 10,000 compounds fail for every one that gets approved...

I'm pretty much take your side of the argument, but it does burn me to see prices of meds for the same product/manufacturer way more expensive in US, than in other countries. That seems a bit like a racket to me. Fortunately I am on no meds so I guess it shouldn't bother me... Until I have to pay for it, then I guess I will hunt out of country for it and hope for the best it is not a chalk/arsenic compound.


Sent from my iPad using Tapatalk

 

[Fermion]

I'm pretty much take your side of the argument, but it does burn me to see prices of meds for the same product/manufacturer way more expensive in US, than in other countries. That seems a bit like a racket to me. Fortunately I am on no meds so I guess it shouldn't bother me... Until I have to pay for it, then I guess I will hunt out of country for it and hope for the best it is not a chalk/arsenic compound.


Sent from my iPad using Tapatalk

Well there are a few reasons for that. One is there are some countries (India for example) which just do not have the resources to pay for a wonder cure for their significant population. If you totally price them out of the drug there is a good chance they will declare your patent invalid and start manufacturing the drug for their people. Technically then the world trade organization should sanction that country but this would be hard to get approved. Easier to offer the drug to a country based on the ability of the government/population to pay. In essence it is subsidized healthcare on a worldwide scale.

 

[pb4uski]

....Easier to offer the drug to a country based on the ability of the government/population to pay. ...

What about our ability to pay? And also that US taxpayers end up subsidizing the pharmaceuticals in that they get tax deductions for their R&D costs.