PPACA, Obamacare and General Comments

[sheehs1]

I am just curious why you think that health insurance premiums should be on a sliding scale On average, doesn't someone consume the same amount of health care when they earn $61K as someone who earns $200K

Not necessarily. What they use is very dependent on an individuals circumstances.

I suppose it is about affordability. If we are going to subsidize those that make less than $60K, our government is making a statement that they can't afford it otherwise. Affordability is relative to the income you make. Taxes are done on a sliding income scale are they not?
To me, it just makes sense. It's sort of like those that want the "fair tax". Take the same percentage regardless of income. ObamaCare is not taking the same percentage based on income. They are taking the same REGARDLESS of income.
At least as it stands at the moment.

I'm curious. You don't see that as problematic

 

[sheehs1]

Let's not say all... I work at a small firm and we are not dropping our healthcare insurance... as of right now I do not think even most firms who already provide health insurance will drop it... if they did not provide, I do not think they will add it either...


Also, we provide dental, vision, STD, LTD, AD&D and death... none of which is required...

I think my point was "it may be more beneficial to our employees to drop it" than if we offered it. Dropping it is not a negative although it may be perceived that way at first.

 

[Mulligan]

It did happen to us. The plan we had just closed, with 30 days notice, and we were all invited to get new policies elsewhere. Our new plan cost about 40% more IIRC.

If anyone would have a legitimate complaint with our present total health care cost and set up, it would be you then, Michael. If I remember correctly, didn't have to also deal with some of your HSA funds being swiped from you?

 

[Chuckanut]

For what it is worth this is what one state's insurance commission found when the big insurers filed their rates for next year under PPACA. No big increase.

Premiums under new health-care law remain about the same | Local News | The Seattle Times

 

[Texas Proud]

Not necessarily. What they use is very dependent on an individuals circumstances.

I suppose it is about affordability. If we are going to subsidize those that make less than $60K, our government is making a statement that they can't afford it otherwise. Affordability is relative to the income you make. Taxes are done on a sliding income scale are they not?
To me, it just makes sense. It's sort of like those that want the "fair tax". Take the same percentage regardless of income. ObamaCare is not taking the same percentage based on income. They are taking the same REGARDLESS of income.
At least as it stands at the moment.

I'm curious. You don't see that as problematic

If you noticed, I said 'on average'.... that takes away the individuality...

I see your concern.... but disagree where the problem is located... from what I read.... the cost of the insurance will be the same for people that choose the same insurance (let's say basically, so we don't get off track).... however, the gvmt said that they are willing to pay part of this cost for people who make less than X dollars... if you make more than that, you are left out.... that is not that unusual for any gvmt program...

If you make too much, you don't get food stamps, welfare, earned income tax credits, etc. etc. etc....

So no, I do not see it as problematic that someone who makes a bit more than the stated level pays the same rate as someone who makes $250K.... or even millions... to costs are the same...


The big problem is how big the subsidies are for people just under the amount..... I would much rather see a smoother line of declining subsidy where someone who is at 399% gets very little subsidy so all this 'cliff' talk would go away.... now, if we are able to save money and move that line out a bit more, fine with me....

The problem I see in your post is that if they move the line to say $70K... then someone who makes $71K will say.... 'why do I have to pay the same rate as someone who makes $300K?'..... the subsidy has to stop somewhere.... but the cutoff is not the problem, it is the size of change if you are on one side or the other......

 

[Texas Proud]

I think my point was "it may be more beneficial to our employees to drop it" than if we offered it. Dropping it is not a negative although it may be perceived that way at first.

I was not referring to your post about your company.... but the earlier post where you said ALL companies under 50 will drop coverage... since our company is not, that is not a true stmt.... I then suggested that maybe not even most will drop.... but this is just an opinion with nothing backing it up....

It might make sense to drop coverage if at the end of the day your employees benefit... (ie, low paid employees)... I work in a company where it would not help the vast majority.... maybe a couple or people would get subsidy.... the rest not... (ps, my company pays 100% of all insurance for employees)....

 

[sheehs1]

I was not referring to your post about your company.... but the earlier post where you said ALL companies under 50 will drop coverage... since our company is not, that is not a true stmt.... I then suggested that maybe not even most will drop.... but this is just an opinion with nothing backing it up....

It might make sense to drop coverage if at the end of the day your employees benefit... (ie, low paid employees)... I work in a company where it would not help the vast majority.... maybe a couple or people would get subsidy.... the rest not... (ps, my company pays 100% of all insurance for employees)....

i stand corrected. Meaning "not all" but "many". It does matter what the overall skill set and salaries of the employees are. In our case while we have less than three making top dollar, we have "many" under that $60K mark.

 

[sheehs1]

The problem I see in your post is that if they move the line to say $70K... then someone who makes $71K will say.... 'why do I have to pay the same rate as someone who makes $300K?'..... the subsidy has to stop somewhere.... but the cutoff is not the problem, it is the size of change if you are on one side or the other......

I think that is what I said when I voiced concern that there was no sliding scale. So I think we are voicing the same thing regarding "where the problem is". Perhaps saying it a different way but in agreement.

 

[Texas Proud]

I think that is what I said when I voiced concern that there was no sliding scale. So I think we are voicing the same thing regarding "where the problem is". Perhaps saying it a different way but in agreement.

OK, I will agree that we might be saying the same thing... it just came across that you thought that the cost for someone making $61k should be different than someone making $250K.... I don't.... without any other difference, the cost should be the same for everybody.....

 

[MichaelB]

If anyone would have a legitimate complaint with our present total health care cost and set up, it would be you then, Michael. If I remember correctly, didn't have to also deal with some of your HSA funds being swiped from you?

Yup. When the two top guys at Canopy financial confused their money with customer's deposits. Happened 4 years ago, but some money was recovered and depositors were made whole earlier this year. Investors and other creditors are SOL, fees will probably eat up the rest. One guy is in jail, the other chose to meet his maker.

You and I are on opposite ends of the PPACA reforms. You will (sooner or later) be hit with a large price increase, I will finally be able to buy (unsubsidized) insurance without abusing the kindness of friends, and my price will not increase at all, and may decline (it's already above what the calculators show). We are going to see some real hardship toward the end of the year as middle income people begin to see how much they will have to pay and find it unaffordable. Even worse, of course, is that we pay with after tax funds. The word dysfunctional does not capture the true state of our health care system.

Despite my personal benefit, I am disappointed with the reform efforts so far, but do not see an easy way to improve. Some simple, but $$, things could be done, such as extend and soften the phase out of premium support, or even make all healthcare costs fully deductible from the first dollar spent could be done to ease the pain.

To quote my physical therapist last year

this is gonna hurt, and afterwards, it will still hurt

 

[scrabbler1]

That's interesting Mulligan as it has happened to me. I have changed policies twice over the last 7 or so years due to the insurance provider jacking up the rates on my existing private policy. I'm not talking about small increases. As an example: several years ago my premium was going from roughly $400 a month to over $700. I bet the people left in that plan are now paying well over $1000 a month or more.

This seems to have happened to me, too. I was paying $469 a month in 2009 and by 2011 it had increased to nearly $700 (it was just over $700 before they gave us a break and rolled it back to just under $700, how generous!). I got out by May.

 

[sheehs1]

OK, I will agree that we might be saying the same thing... it just came across that you thought that the cost for someone making $61k should be different than someone making $250K.... I don't.... without any other difference, the cost should be the same for everybody.....

oopps NO we don't agree. I do think it should be different for someone making $61,000 versus someone making $250,000. That there should be a sliding scale. I thought that is what you were saying when you talked about the cliff on either side of the cut off "being the problem." I thought because you made that statement, you thought it to be a problem. I agreed because I believe the cliff on either side is a problem.

 

[FinanceDude]

And the IRS is in charge of making sure all pay their fair share, what could go wrong?

 

[Texas Proud]

oopps NO we don't agree. I do think it should be different for someone making $61,000 versus someone making $250,000. That there should be a sliding scale. I thought that is what you were saying when you talked about the cliff on either side of the cut off "being the problem." I thought because you made that statement, you thought it to be a problem. I agreed because I believe the cliff on either side is a problem.

I think what we do agree is that having the cliff at such a big amount for so little change is not right.... I think we also agree that changing it is important....

From what I gather from your posts, you think the subsidy should continue for people making more than the 400%.... just have it less and less.... this is where I do not agree...

I would rather see the subsidy lowered faster.... so the cliff is not as big as it is right now.... and possible cover more people because we save money on the people that are in the 300% to 400% range...


I don't think my graph is copying correctly.... nope....

But, I think that you want to continue the subsidy at the same slope as it is now so it covers more people.... I want the slope changed where the subsidy is less for most people.... and with any savings we can cover more people... yours would cost a lot more to the gvmt.... mine would be neutral.... it would make poorer people pay more.... but the cliff would not be there....

 

[pb4uski]

oopps NO we don't agree. I do think it should be different for someone making $61,000 versus someone making $250,000. That there should be a sliding scale. I thought that is what you were saying when you talked about the cliff on either side of the cut off "being the problem." I thought because you made that statement, you thought it to be a problem. I agreed because I believe the cliff on either side is a problem.

But I think that we would all agree that a couple making 399% FPL ($62.5k) and getting $9k or more of subsidy compared to a couple making 401% of FPL ($63.0k) and getting zero subsidy is unfair. IMO, an additional $500 of income shouldn't have such a perverse effect on the subsidy that someone gets.

I could see it being fair that the most one would pay would be 9.5% of income for health insurance so a family would pay 9.5% of income or less for health insurance. Low income would pay less than 9.5% because they would get higher subsidies. High income would pay less than 9.5% because the unsubsidized premium would be less than 9.5% of their income. The problem with a scheme like the above is that so many more middle class would be subsidized that the cost of subsidies would balloon the deficit.

 

[Mulligan]

Yup. When the two top guys at Canopy financial confused their money with customer's deposits. Happened 4 years ago, but some money was recovered and depositors were made whole earlier this year. Investors and other creditors are SOL, fees will probably eat up the rest. One guy is in jail, the other chose to meet his maker.

You and I are on opposite ends of the PPACA reforms. You will (sooner or later) be hit with a large price increase, I will finally be able to buy (unsubsidized) insurance without abusing the kindness of friends, and my price will not increase at all, and may decline (it's already above what the calculators show). We are going to see some real hardship toward the end of the year as middle income people begin to see how much they will have to pay and find it unaffordable. Even worse, of course, is that we pay with after tax funds. The word dysfunctional does not capture the true state of our health care system.

Despite my personal benefit, I am disappointed with the reform efforts so far, but do not see an easy way to improve. Some simple, but $$, things could be done, such as extend and soften the phase out of premium support, or even make all healthcare costs fully deductible from the first dollar spent could be done to ease the pain.

To quote my physical therapist last year

I certainly would welcome healthcare costs being tax deductible, like workers receive, and also by them purchasing the families insurance through pretax dollars. But then again, we are back to the cost factor, as that would hit the government coffers a bit. So I guess ultimately your earlier comment is the most beneficial; getting the nation's healthcare costs under control.

 

[Texas Proud]

But I think that we would all agree that a couple making 399% FPL ($62.5k) and getting $9k or more of subsidy compared to a couple making 401% of FPL ($63.0k) and getting zero subsidy is unfair. IMO, an additional $500 of income shouldn't have such a perverse effect on the subsidy that someone gets.

I could see it being fair that the most one would pay would be 9.5% of income for health insurance so a family would pay 9.5% of income or less for health insurance. Low income would pay less than 9.5% because they would get higher subsidies. High income would pay less than 9.5% because the unsubsidized premium would be less than 9.5% of their income. The problem with a scheme like the above is that so many more middle class would be subsidized that the cost of subsidies would balloon the deficit.

Why couldn't we charge poorer folks 9.5% They will get more subsidy because their share of the premium would be less.... but lowering the percent they pay is not fair IMO....

 

[pb4uski]

Why couldn't we charge poorer folks 9.5% They will get more subsidy because their share of the premium would be less.... but lowering the percent they pay is not fair IMO....

You do understand that when I use a percentage that I'm talking about the subsidized cost and not the unsubsidized cost, right? The unsubsidized cost will be the same for people of similar age, family size, etc. irrespective of income. The subsidy would reduce their net cost to 9.5% of income or less.

IMO a lower percent of income for the subsidized cost for lower income people is fair because cost of living (rent, food, etc) consumes more of their income than higher income people.

 

[Texas Proud]

You do understand that when I use a percentage that I'm talking about the subsidized cost and not the unsubsidized cost, right? The unsubsidized cost will be the same for people of similar age, family size, etc. irrespective of income. The subsidy would reduce their net cost to 9.5% of income or less.

IMO a lower percent of income for the subsidized cost for lower income people is fair because cost of living (rent, food, etc) consumes more of their income than higher income people.

Yes, I understood what you said....

But first, we are talking about poor people and poorer people... (per the definition of getting a subsidy)....

The really poor get a lot of other gvmt benefits that the 'less poor' just do not get... so I would say that it might not be true that the really poor pay more for their cost of living than the slightly poor.... I do agree that a person earning 70K probably pays more as a % for cost of living than someone who earns $200K.... but not always...

Also, the really poor will be on Medicaid.... so not paying anything anyhow... I really do not know, but what is the cutoff for Medicaid Maybe the group of people is pretty slim....

 

[pb4uski]

I think Medicaid is 100% FPL for states that do not expand and 138% FPL for states that do expand. For a 57 yo couple with no kids, 100% FPL is ~$15,750.

At $16k of income, after rent, food and other living costs for two there can't be much left to pay for health care. According to the calculator a couple with that amount of income would pay 2% of their income for health insurance after a 98% subsidy.

The same couple earning $70k would get no subsidy and pay ~$15k for medical insurance (21% of income). The same couple with $200k income will also not be subsidized but their health insurance will "only" be 7.3% of their income.

Subsidy Calculator | The Henry J. Kaiser Family Foundation

 

[Texas Proud]

I think Medicaid is 100% FPL for states that do not expand and 138% FPL for states that do expand. For a 57 yo couple with no kids, 100% FPL is ~$15,750.

At $16k of income, after rent, food and other living costs for two there can't be much left to pay for health care. According to the calculator a couple with that amount of income would pay 2% of their income for health insurance after a 98% subsidy.

The same couple earning $70k would get no subsidy and pay ~$15k for medical insurance (21% of income). The same couple with $200k income will also not be subsidized but their health insurance will "only" be 7.3% of their income.

Subsidy Calculator | The Henry J. Kaiser Family Foundation

I have not done subsidy calculations before.... but decided to take a look...

From what I see, the couple can save by choosing a Bronze plan...

For example, you could enroll in a Bronze plan for about $3,277 per year (which is 5.37% of your household income, after taking into account $8,915 in subsidies).

Not quite as bad on the premiums... still, the premiums seem pretty high to me...

 

[anethum]

Now...now....let's don't get too political on here, pointing fingers because others have a different view. The same can be said for the system we had. No need to have changed it - just tweak it to work. There was a lot that could have been done with that first, without this massive social change. But I digress before I get too political.

No, I think there was no way to simply "tweak" the existing dysfunctional system. Every year, more Americans have no health insurance. Every year, a major cause of personal bankruptcy was due to individuals who HAD health insurance who found themselves with enormous medical bills far beyond their lifetime caps. Every year people who had health insurance were dropped by their insurers when they got sick. Every year, millions of people with pre-existing conditions were unable to obtain health insurance at any price, or any realistic price. The current system is untenable.

And as you said, "before I get too political", the bill is not perfect but amendments to improve the PPACA became impossible because one side was only concerned with stopping the bill completely. Those opposed never offered an alternative which would have provided near-universal coverage and fixed the major problems I mentioned above.

There has been an enormous amount of speculation in this and other threads about the PPACA. After October 1, we should all have real numbers and other specific information to go by. I think that all of this speculation at this time is pointless.

 

[pb4uski]

....still, the premiums seem pretty high to me...

I agree and the 2014 proposed premiums are out for our state and the calculator premiums are much higher. I expect my HDHP Bronze plan to be ~75% of the bronze plan premiums shown by the calculator. It might be a California thing as I know costs are higher out there.

 

[REWahoo]

I smell pork...

 

[MichaelB]

Lets stay away from blame and speculation and try to stick with with what we know. The healthcare threads have been informative and useful.