Unless Congress makes major changes by 2014, we will face The Affordable Care Act. Many American consumers are unhappy with some aspects of government-run health care and pundits rant on its failings and merits. Consumers deserve a lucid presentation of the choices and costs that they will face directly, and in “Part 1” (of this blog) that is shown. Separately, it is important to understand the government intentions to alter health treatment delivery and handle costs. That will be covered in “Part 2.”
The Affordable care Act carves the population into income and age strata. For low-income people under age 65, Medicaid is the plan. For those aged 65 or older, Medicare is the plan. For those eligible, it’s their employer’s health plan. Those ineligible for an employer plan must choose from a “Health Exchange” plan, of which there is supposed to be at least two options. If you choose “no plan” you are fined.
Your Eligibility | If Your Annual Income is | ||||
Single | Family | ||||
Medicaid for under age 65 | up to $14,404 | up to $29,327 | |||
Medicare for 65 or older | – | – | |||
If Your Annual Income is | |||||
Pick a Health Exchange Plan | Single | Family | |||
with Premium Subsidy | up to $43,320 | up to $88,200 | Subsidy cuts premium to 2 – 9.5% of income | ||
without Premium Subsidy | above $43,320 | above $88,200 | You pay the full Premium | ||
with Cost Sharing Subsidy | up to $27,075 | up to $55,125 | Uncertain Subsidy for co-pays & deductibles | ||
without Cost Sharing Subsidy | above $27,075 | above $55,125 | You pay all co-pays & deductibles | ||
Single | Family | ||||
If You choose “No Plan” | fine of $695 | fine of $2085 | or up to $2.5% of family income | ||
If eligible for an employer’s health plan but you do not enroll, you are automatically enrolled in plan with the lowest premium | |||||
In the “Pick a Health Exchange Plan” block above, the government subsidy intent is shown. But unknown are the premiums, co-pays and deductibles for the plans that will be available in 2014. In each Health Exchange, there will be at least 2 multi-state health plans (probably HMO or PPO) and likely one or more health co-ops, since Federal funding is offered to co-ops. Each plan must cover everything the Federal government demands without excluding pre-existing conditions, or imposing limits on lifetime payouts. The rich coverage suggests an Exchange plan will cost more than 2010’s typical $4,300 family premium and $2,500 in out of pocket costs. Seven percent inflation would lead to $5,600 and $4,300 in 2014, i.e. about $10,000. The Affordable Care authors think they can contain costs using tactics we’ll show in “Part 2.”
Alan Daley is a retired businessman living in Florida. He follows public policy from the consumer’s perspective.