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Baseline: Geezers in the Health Insurance Exchanges


because 64 seems as good a baseline as any...

Got a request for some sample calculations, so...

I've used this calculator before (more on that later) from but there are others out there on the interwebz if you want to search for them. I've gotten approximately the same results in different places, so maybe they're just all stealing each others code.

My income (when I've had one) has mostly been in the range of 200-250% of poverty level for the past several years, so I picked $28,000 (240% of poverty level) since those were some nice round numbers. Age 64 is the oldest listed, since at 65 you'll presumably be switching to Medicare, and it's got a nice catchy little tune associated with it so I picked that one for this demo.

And that's about all that's nice about any of this.

Income? $28,000
Employer coverage? no
Adults? 1
Age? 64
Kids? no
Tobacco? no

Maximum % of my income I'll (theoretically) have to pay for insurance premiums if I qualify for a subsidy? 7.7%
Maximum subsidy I'll qualify for? $6895 (remember this number)

That's doable. I'd have to turn off the internet and turn all the cats out to fend for themselves, but it's doable.

If I'm feeling lucky next year, I can take that $6895 subsidy and use it to buy some serious (bronze) underwear under-insurance for the low low price of only $609 per year. That's only about $50 per month, or about 2% of my income. I could keep the cats (buy cheaper catfood) and the internet (downgrade to dialup) and still have insurance! Win!

Bonus points for noticing that that would be a real-life example of the chained CPI in action. Bonus bonus points for noticing that nowhere in there do they mention how much your out-of-pocket maximum is if you buy the bronze plan.

Speaking of out of pocket expenses, keep in mind that even though you're paying at least part of your insurance premiums out of your own money, that expense is not counted as "out of pocket." My additional out-of-pocket maximum expenditure, should I get expensively sick, is (theoretically) $5200. Wait... 5200/28000=0.1857142857142857, or approximately 18.5% of my income.

Some months ago this same calculator was telling me that my maximum out-of-pocket was approximately $3200, not $5200 (nope, I have no screen shots). I have no clue whether the law has changed, or whether something was wrong with the old calculator, or whether something is wrong with the new calculator. Whatever, it's a baseline.

So, as it stands right now, if I buy silver insurance in 2014 and get sick, I stand to lose 7.71+18.57=26.3% of my income. I'm not going to have to turn my cats loose, I'm going to have to eat them.

Average: 5 (2 votes)


Alexa's picture
Submitted by Alexa on

Brass Quintet.

And I very much appreciate that you've taken the time and effort to 'put some numbers to' this mess.

After all, the 'expense' of the ACA is one of the primary concerns for most folks.

Aside from whether or not they'll actually receive any health care, of course.

One of my greatest concerns is the fact that the Administration has effectively 'lowered the bar,' by making the silver plan (70/30) the 'standard' plan.'

We really should be making a big deal out of this fact. ;-)

Submitted by hipparchia on

glad you like the quintet too. this isn't the first time that i've wished they'd named the 60/40 plans "brass" instead of "bronze." :)

Submitted by hipparchia on

my brother would approve; he played euphonium (and a couple of others of the more obscure varieties) as well as trumpet and trombone when we were in school. he didn't keep it up though, which is a shame, because he was pretty good. he also turned out to be pretty good at photography and videography, which he is still doing, so there's that.

Submitted by lambert on

... if you get really sick, you're doomed, at least financially.*

I thought insurance was supposed to prevent that?

Perhaps this is why RomneyCare reduced the number of those claiming medical expenses as a cause for bankruptcy from (IIRC) 57% to 52% (too lazy to find the link...)

Submitted by lambert on

This was beta site of the real exchange. Official, too. Just can't find it!

Submitted by hipparchia on

It would be fun to work through this on a "real exchange."

it would indeed.

i was planning to write about california a little later in the week. got more to say about this particular bit first, but the present top post is too long as it is.

Splashoil's picture
Submitted by Splashoil on

I thought the subsidies in the "exchanges" would only support the "Silver" plans. I read somewhere that "Gold" and "Platinum" were not eligible for a subsidy. Maybe even "Bronze." If you are a member of a Taft-Hartley trust plan you are also not eligible for a subsidy for that. Please correct me if I am wrong.

Submitted by lambert on

... why subsidize only one plan?!). Kaiser via PNHP:

To provide a more tangible picture of what coverage people would be required to buy, the Kaiser Family Foundation commissioned Aon Hewitt, a prominent benefit consultant, to estimate dollar values for several illustrative cost-sharing structures for non-group bronze and silver level plans when the ACA is fully implemented in 2014. Bronze plans are the least comprehensive of the four tiers, and represent the minimum coverage people purchasing non-group coverage could buy to satisfy the individual mandate. Silver plans are likely to be the most common level of coverage because premium tax credits are based on silver plan premiums and only people enrolled in silver plans will be eligible for cost-sharing subsidies.

Then again, Covered California is wicked confusing:

The premium subsidy reduces the amount that an individual or family pays for health insurance coverage by providing an advance tax credit. These subsidies are only available through the Exchange. Subsidies are determined on a sliding scale, based on income, so that individuals at the lower end of the income scale get the most help. The subsidy is based on the premium for a Silver Level standardized plan (the second lowest [why?] most silver plan available in an Exchange). An individual or family who wants a more expensive or higher tier plan (i.e., gold or platinum) must pay the difference.

It's utterly unclear (in the FAQ as well) whether the silver plan is being used as the basis to calculate the subsidies, or whether it's the only plan that offers the subsidy.

US News seems to have the most complete explanation:

The silver plans have a special role in the tax credits and payment subsidies. In a state insurance exchange, the second cheapest silver plan will become the benchmark for tax credits. (Using the cheapest plan might have led to insurers trying to game the system.) Because healthcare costs differ around the country, this benchmark premium will not be the same in every state.

While this tax credit is tied to a silver plan, the family is free to buy any plan in the exchange it can afford. Whatever the premium is for the plan, the family will be able to reduce its payment by the amount of its credit: $7,095.70. The only exception is that if it decides to buy a cheaper policy with total premiums of less than this amount, it will not get any money back.

To also qualify for out-of-pocket supports, individuals and families with incomes up to 250 percent of the FPL must buy a silver plan in their state exchange. If they do so, the very lowest-income group would pay only 6 percent of its out-of-pocket expenses and the supports would cover the remaining 94 percent. At the upper end of this scale, a family earning 250 percent of the FPL would pay up to 27 percent of its out-of-pocket expenses and the supports would cover the remaining 73 percent.

This is just so fucking confusing.

Submitted by hipparchia on

This is just so fucking confusing.

feature, not a bug! :)

aha! actually, i'm really glad you posted this, this sentence clears up a little of the confusion: To also qualify for out-of-pocket supports, individuals and families with incomes up to 250 percent of the FPL must buy a silver plan in their state exchange.

if that article is correct, there are two different subsidies....

the first one is the subsidy to help you pay the premiums to buy the insurance, and this is the one everybody is talking about, mostly. if you're not poor enough for medicaid, but your income is less than 400% of poverty level, then you'll be given a subsidy that you can use to buy either bronze, silver, gold or platinum insurance with.

the second subsidy is more narrowly targeted - if you buy the silver insurance AND if your income is less than 250% of poverty, your maximum out-of-pocket expenses will be made lower, at least in california. that explains, perhaps, the discrepancy i got for my maximum out of pocket expenses (approx 11% of my income in the earlier version) between the earlier version of the calculator and this version.

i wonder if this extra subsidy is only going to be funded in the state-run exchanges, but not in the federal? i'll have to dig around and see what i can find out, if anything.

Submitted by hipparchia on

it appears, from what i've been able to find so far, that if you qualify for a subsidy:

1. you can spend that amount of the govt's money to buy a platinum, gold, silver, or bronze plan;

2. you cannot use any subsidies to buy any catastrophic plan;

3. if you use your subsidy to buy a gold or platinum plan, you have to pay the extra premium yourself.

i was planning to do 2 or 3 posts on various scenarios for folks using the exchanges - adding in an example of buying a better plan is a good idea. i'll do that in the next post.

Submitted by hipparchia on

Why are the rules as they are?!

vampire squids gotta eat too!

and when you're feeding this many vampire squids, you gotta rope in a lot of constituencies...

bleeding hearts: more free care for poor people!

moral scolds: more skin in the game!

rich people: needs more cowbell loopholes!

Alexa's picture
Submitted by Alexa on

forget which commenter mentions this, but I've seen it stated the opposite way (per the Kaiser article).

And with all the 'carrot and stick' garbage that Dems love to promote (didn't they 'invent' the nudge theory?), it would not surprise me if somehow, they decide NOT to allow folks the freedom to apply their subsidies to any level of plan.

But I'll go with what you're 'digging up,' hipparchia. I'm sure grateful that you're game to plough through all the "stuff" out there.

I'm beginning to believe that most of the health care reporters don't even understand the ACA (except maybe Julie Rovner (NPR), and a couple of Kaiser and PNHP folks!

Submitted by hipparchia on

I'm sure grateful that you're game to plough through all the "stuff" out there.

you're welcome. i believe i heard you volunteering to research both merp and union plans... :)

Alexa's picture
Submitted by Alexa on

some union plans.

I hope that you'll consider blogging more extensively on that topic. I'm not going to be able to invest much time on this topic for the next week, but after a little poking around, it appears to me that some of the same restrictions will also apply much more broadly to the entire private 'group insurance sector'--especially, those that are self-funded.

If that is correct (and I'm still going to check it out further), it may reduce the chances of the unions being able to get a 'carve out.'

IOW, if they do, then most self-funded corporations will demand the same treatment, and frankly, as I perceive it, that would in effect overturn much of what the ACA was intended to achieve.

And by that I mean--to spread the risk and the cost to the broader 'group market,' in order to lower the cost to the entrepreneurial class (who purchase their insurance in the private, individual market).

I hope what I'm saying is 'understandable.' (It's one of those "I know what I mean, but I'm not sure how to say it" situations.)

Rainbow Girl's picture
Submitted by Rainbow Girl on

You are right. And reading the excerpts you posted painfully illustrates the issue. These are supposedly "explanatory" (as in, make clear to potential "customers") how the thing works. I don't think the confusion is any accident. It has worked wonderfully for FIRE to snag unsuspecting dumb money into involuntary debt servitude. It's just another FIRE Vampire, with indecipherability as a feature-not-bug, specifically to screw people.

Rainbow Girl's picture
Submitted by Rainbow Girl on

Use, propagate, and alter in good health!

(And thank you for doing this invaluable research on trying to price a real-life scenario with the (un)(dis)information available.)

Frankly, the fact that everyone needs to turn into a full-time fraud detective to figure out WHAT THIS COSTS tells us all we need to know. As pointed out, current empllyer plans have a one page summary of the money milestones -- premiums, copays (and what they are if doctor visit, hospital, etc.), deductible (and what goes or doesn't go towards it), and RX co-pays. The whole of ObamaCare as it currently exists is a (ghastly) parody of the worst of the worst in adhesion contract drafting -- Ten Billion words and no meaning -- until you're exhausted and ... just pay. That's the strategy and Obama/Sebelius et al are sticking to it.

P.S. Excuse me, but how exactly are these "navigators" drawn from the community non profit outreach crowd going to be of any use at all, when you've got a few of us here (led by Lambert) devoting some serious time to understanding and coming up very short???!!!!

Submitted by hipparchia on

Excuse me, but how exactly are these "navigators" drawn from the community non profit outreach crowd going to be of any use at all,

i'm going to guess that their main purpose is to make you feel all warm and fuzzy about the insurance-buying experience. deskilling is a favorite tactic of the neoliberals.

Rainbow Girl's picture
Submitted by Rainbow Girl on

... on an ObamaCare Insurance Exchange Product.

This reminds me -- sometime around when Yves Smith published her superb post about Obama the Great Betrayer (and Liar) I suddenly saw Obama as just a cleaned-up Pusher Man in a Brooks Brothers suit. Doping you up with Hope/Change as he's putting you on the Obama Grey Hound Bus to the fake shower stalls of poverty, desperation and slow (and painful) death.

Navigators = Pusher Man's assistants.

katiebird's picture
Submitted by katiebird on

My insurance options (through former employer, I pay entire premium) show real life examples.

Susie has this list of medical issues through the year. This is what she pays in premiums. This is what She and the Company pays for each event. Copays and deductibles and medication are listed.

Jim has THIS list (something different) and same breakout.

It doesn't go on for infinity but, you get enough of an idea to be able to substitute Doctors visits. and whatever.

It's not just a mish-mash of gibberish.

Submitted by hipparchia on

indeed they do.

and that kind of comparison is supposedly one that you're going to be allowed to make, once the exchanges' websites are up and running. i'll be curious to see if this really happens, because if it does, and does so in great enough detail, a critical mass of people may begin to refuse to do business with the insurance companies at all. can't have that, can we? :)

that would seriously be a gift for the medicare-for-all crowd.

katiebird's picture
Submitted by katiebird on

That would be nice. I think....

Although I DO have some questions about Medicare now that I'm getting old enough to read up on it in a serious way.

Just how important are Supplemental Plans? Because the literature about them is even more obscure than the Exchanges. The links about Supplemental and Part D plans is even harder to read than the stuff about the Exchanges. For the Part D plans, you have to put in your drugs to find plans that cover what you are taking!!!!! That's crazy.

Submitted by hipparchia on

Just how important are Supplemental Plans?

that's up to you. this report calculates original medicare's (part a and part b together) actuarial value at 80%. i've seen other estimates (can't find any links) that it's only about 70-75%. be forewarned - actuarial value is not necessarily a good guesstimate of what any one individual might end up paying. actuarial calculations are designed only for making estimates about populations, not individuals.

you can buy supplemental insurance insurance to cover some or all of that gap (which is why it's often called medigap). it used to be fairly straightforward, but since this is private insurance we're talking about, it's gotten more complicated over the years. roughly speaking, there are 3 different ways to buy supplemental insurance---

medicare part d (yes it says medicare, but don't be fooled, it's private insurance) pays only for drugs. any other expenses you may have that aren't covered by a+b you'll have to pay for out of your own pocket or else you'll have to buy yet another supplemental policy that covers non-drug expenses.

medicare part c (yes it says medicare, but don't be fooled...) it's a public/private kinda sorta hybrid chimera, but people like it because they pay one big fat premium to an insurance company and that's it. the insurance company then turns around and pays the govt your part b premium for you, and also pays for some other extra benefits as well (like drugs, or all your deductibles, or...), up to and including 100% of all your medical bills if you want to pay that big a premium.

medigap or supplemental insurance. it used to be that parts c and d didn't exist, so some medigap plans paid for drugs too. but now that parts c and d exist, these policies are no longer allowed to cover drugs (i think there are some policies that have been grandfathered in, but no new policies will be allowed to cover drugs) so this kind of insurance covers whatever out of pocket expenses, other than drugs, you might have (doctor visit copays, hospital deductibles, etc, for example).

there, that's all clear as a mountain stream, isn't it? /snark

because what americans really want is choices! the insurance companies have designed what seems like a limitless number of plans, all of which are obscure and can pretty much be changed at any time (but only by the insurance company).

Rainbow Girl's picture
Submitted by Rainbow Girl on

... a huge racket and the source of extreme stress for all the Medicare people not rich enough to absorb all the easter eggs nasty surprises that come with that territory. Granted, my source of information is anecdotal -- several people I know who have entered Medicare (and others whose parents have as well). It's another jungle of "actuarial values," no transparency or disclosure about what is or isn't covered and for how much, etc. An infinite cornucopia of traps to ensnare the most vulnerable population -- the elderly. (Sounds a lot like ObamaCare Insurance Exchange Products to me.)

katiebird's picture
Submitted by katiebird on

Are there any caps at all for Medicare .... is there a maximum amount we might have to spend if we get really, really sick? I could probably handle even 30% of a fair amount of money (not really, but I'm imagining) .. But 30% of infinity? Probably not.

Rainbow Girl's picture
Submitted by Rainbow Girl on

I personally have no idea or any way to evaluate. However, I would do some serious research before shelling out $$ for one of those "products." I imagine there must be "geezer discussion boards" across the WWW on the subject and also, you never know, consumer fraud investigations or audit reports by some fed, state or local authority, or, better, class action lawsuits (though because it involves FIRE Fraud, those might be tucked out of sight by confidentiality agreements demanded by insurers and politely enforced by judges.)

Submitted by hipparchia on

I could probably handle even 30% of a fair amount of money (not really, but I'm imagining) .. But 30% of infinity? Probably not.

that sounds a lot like my parents. probably a lot of people fall into this category.

no, there are no caps on original medicare, which is why people buy the various kinds of supplemental insurance. my parents did the part c thing for a while, decided it wasn't worth the extra and went with just a+b for a while. now they're really getting up there in years and have original medicare plus they've found a part d plan that seems to be working well for them.

whatever you decide to do, you're generally only stuck with that choice for a year. open enrollment happens every year and you can always change plans then.

my various friends and family members who were/are in the insurance biz have all retired or moved to other parts of the country now, so i'm not up-to-the-minute informed on the insurance markets, products and prices.

medicare has taken a stab at estimating some out of pocket costs:

the $104.90 part b premium listed there is current for 2013,so i'm guessing that the rest of the estimates on that page are for 2013 also.

then again, this medicare page on open enrollment is from 2010 so who knows? still, it's got some good suggestions that might serve as a starting point.

the lack of spending caps in original medicare is one of the reasons why pnhp is pushing for both expanding and improving medicare. i know you know this, but i like to spread the word about hr676 as often as i can! :)

Submitted by hipparchia on

thanks! i was going to do that, but my computer froze up at that point, so i decided to quit before i got any behinder than i already was. i'll try to remember to add tags next time.

Alexa's picture
Submitted by Alexa on

was in regard to union members 'only during periods of unemployment,' then I would think that they could possibly get some remedy for that (I think that I misread the comment).

At any rate, I hope that they can do so.

[I'm not anti-union, believe me. I'm a former federal union rep.]

Splashoil's picture
Submitted by Splashoil on

Yesterday I attended a Concord Coalition (Pete Peterson) Deficit forum sponsored by my Democratic Centrist Congresswoman Suzan Delbene. Sorry I could not respond.
I believe most Taft-Hartley trust plans were given an exemption to the Cadillac tax until 2017.
At the same time T-H plans are not eligible to participate in the "exchange subsidies." I must be brief right now, but there obviously is a lot to discuss.

Alexa's picture
Submitted by Alexa on

from another blog regarding this.

It may sound harsh, if it does, I am very sorry. I say this as a former federal service union steward (DAF), so I'm definitely not 'anti-union.' Just fed up at times, that folks will not 'wake up' to the fact that they've been sold out. Most unions are simply apparatchiks of the Democratic Party anymore. They are mostly useless in regard to the 'interests of the rank-and-file members.'

Here's my comment to another commenter, who apparently was 'clueless' above the surcharge, in spite of the fact that it was 'screaming from mainstream media headlines' for literally years now.

Here's the commenters partial comment below:

I have no problem with the idea that everyone should be protected. I support ACA.

But how can I help feeling betrayed when my lawmakers and president say that unionists should be taxed on their health benefits in order to finance ACA for those who did not fight and work for decent health care?

The money to "equalize" healthcare should come from the common pot (income taxes) and the people with good health plans should not be attacked, nor their healthcare reduced.

My reply:

What I'm puzzled about is this--why on earth didn't the 'rank-and-file' complain about the Cadillac when the bill was being written?

This was reported on extensively in the Washington Post, NYT, and probably most newspapers that carry 'AP?'

Believe me, if your union leaders are saying they didn't know about the 'surcharge' law that 'they negotiated, which was delayed UNTIL 2017--you're being hoodwinked.

As a former union rep, I'd love to see the union rank-and-file finally wake up. Some (not all) of the union 'leaders' sold you folks out years ago.

BTW, some Democrats 'led the charge' to tax the Cadillac plans.

Please see The Washington Post piece below.

What Makes a Health Plan a 'Cadillac'?

By Keith B. Richburg,
October 01, 2009

NEW YORK -- In the scramble to find money to overhaul the health-care system, Senate Democrats have been eyeing the most generous insurance packages -- what some call the "Cadillac" plans -- as a lucrative target to tax.

But as the competing proposals are debated on Capitol Hill, a fundamental challenge has emerged: Few people agree on exactly what constitutes a Cadillac plan.

Many proponents of taxing high-end employer-based coverage have singled out the titans of Wall Street finance and industry, whose insurance might pay for regular EKGs, CAT scans and weekend health retreats at tony spas. The California Health and Longevity Institute, for example, offers "comprehensive physicals" over several days that include personalized counseling on wellness, fitness and nutrition.

I hope that by pointing the 'betrayal' of the unions by the Senate Dems, MAYBE some of these folks won't reflexibly (robotically is more apropos) support Dem candidates.

I attempted before the 2012 election--using EVERY conceivable avenue to send a "Tweet" to the SEIU.

NONE of my 'Tweets' ever showed up on the SEIU live Tweet feed.

I hope that if you have access to union rank-and-file in any capacity, that you will let them now that they've been sold out.

Maybe 'the unions' will stay home during the mid-terms next year.

Frankly, I can't think of anything worse than complete Democratic control of the legislative branches and the White House, UNLESS one wants to see the TOTAL evisceration of the social safety net (per Bowles-Simpson's proposal, The Moment Of Truth).

Keep up the good work getting out the truth about the MERP, etc.! ;-)

Alexa's picture
Submitted by Alexa on

My comment about the union rank-and-file being unaware of the Cadillac Plan Surcharge was not directed 'at you.' I appreciated the link, and the clarification that this was what I was seeing talked about, on the blogs, etc.

Thought I'd just use it as a segue to post the WaPo piece about the Senate Dems.

How cynical and duplicitous can our officeholders get? Jeeeeeezzzzzz!

Alexa's picture
Submitted by Alexa on

Seriously, I'll try to ferret out more by some time next week. Serious time constraints this week.

Actually, the more I'm reading--the more confused I'm becoming!

I may have to settle for just linking to some articles, and letting others interpret them.

It truly seems that much of the language is designed to obsfucate.

So, not sure that I have the knowledge to 'interpret' the information.

But I'll try to see what I can find. . .

Submitted by hipparchia on

:) oh yes i'm sure i heard that! :)

and yes, just digging up some articles and linking to them is a very useful public service. probably the single biggest, most important thing i've ever learned from corrente, is that i can learn about stuff that i never thought possible. at the beginning of the big meltdown, before any of us really knew or understood what was going on, lambert especially, but some others too, just kept digging up articles and linking to them.