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PPACA FAQ: Affordability and Subsidies (Part 1)

katiebird's picture

(Cross posted to The Confluence)

Question: I read a story yesterday that says some employees won't be able to afford Health Insurance even if their employers offer affordable plans.  But, I heard that there will be subsidies to help people afford insurance.  Won't the subsidies help with those plans?

Short Answer: Only the cost to the employee of Employee-Only coverage is considered in determining affordability and subsidies. And to be affordable, Employee-Only coverage must be 9.5% of employee salary or less. If it is then the employee (and dependents if any) is not eligible to purchase health insurance through an exchange or eligible for any subsidy. Without those subsidies, many employees will not be able to afford the plans (either individual or family) offered by their employers.

However, if an employee is self-employed or the employer does not offer affordable health insurance, then the employee can be eligible for subsidies that could limit their share of health insurance premiums to as little as 2% of their income.

Long Answer (here's how it works)

The AP published this widely distributed story (links flooded my WordPress ObamaCare page) yesterday:

Coverage may be unaffordable for low-wage workers

The law is complicated, but essentially companies with 50 or more full-time workers are required to offer coverage that meets certain basic standards and costs no more than 9.5 percent of an employee's income. Failure to do so means fines for the employer. (Full-time work is defined as 30 or more hours a week, on average.)

But do the math from the worker's side: For an employee making $21,000 a year, 9.5 percent of their income could mean premiums as high as $1,995 and the insurance would still be considered affordable.

Even a premium of $1,000 — close to the current average for employee-only coverage — could be unaffordable for someone stretching earnings in the low $20,000's.

With such a small income, "there is just not any left over for health insurance," said Shannon Demaree, head of actuarial services for the Lockton Benefit Group. "What the government is requiring employers to do isn't really something their low-paid employees want."

Based in Kansas City, Mo., Lockton is an insurance broker and benefits consultant that caters to many medium-sized businesses affected by the health care law. Actuaries like Demaree specialize in cost estimates.

Another thing to keep in mind: premiums wouldn't be the only expense for employees. For a basic plan, they could also face an annual deductible amounting to $3,000 or so, before insurance starts paying.

"If you make $20,000, are you really going to buy that?" asked Tracy Watts, health care reform leader at Mercer, a major benefits consulting firm.

And low-wage workers making more than about $15,900 won't be eligible for the law's Medicaid expansion, shutting down another possibility for getting covered.

It's not exactly the picture the administration has painted. The president portrays his health care law as economic relief for struggling workers.

[A quick note to express my frustration that the AP and other such respectable news agencies haven't adopted the blogger tradition of linking and quoting primary & supplemental sources.]

"The law is complicated" is a gross understatement but let's use this AP story in an attempt to break it down:

Essentially companies with 50 or more full-time workers are required to offer coverage that meets certain basic standards and costs no more than 9.5 percent of an employee's income.

What are those standards?

The IRS issued final regulations earlier in the year (as reported by the N.Y. Times)

Federal Rule Limits Aid to Families Who Can’t Afford Employers’ Health Coverage

In deciding whether an employer’s health plan is affordable, the Internal Revenue Service said it would look at the cost of coverage only for an individual employee, not for a family. Family coverage might be prohibitively expensive, but federal subsidies would not be available to help buy insurance for children in the family.

The policy decision came in a final regulation interpreting ambiguous language in the 2010 health care law.

Here's a little more detail, According to Kaiser Family Foundation, "EXPLAINING HEALTH CARE REFORM: Questions About Health Insurance Subsidies" (pdf document)

Who is eligible for premium tax credits?

Citizens and legal residents in families with incomes between 100% and 400% of poverty who purchase coverage through a health insurance exchange1 are eligible for a tax credit to reduce the cost of coverage. People eligible for public coverage are not eligible for premium assistance in exchanges. In states without expanded Medicaid coverage, people with incomes less than 100% of poverty will not be eligible for exchange subsidies, while those with incomes at or above poverty will be. People offered coverage through an employer are also not eligible for premium tax credits unless the employer plan does not have an actuarial value of at least 60%2 or unless the person’s share of the premium for employer-sponsored insurance exceeds 9.5% of income. People who meet these thresholds for unaffordable employer-sponsored insurance are eligible to enroll in a health insurance exchange and may receive tax credits to reduce the cost of coverage purchased through the exchange.

**********

I found a remarkably clear description of how this will work at a website run by an employee benefits manager (deleted portion of post relates to exempting employees from penalties for waiving coverage):

Think You Understand PPACA Affordability Standard?

The first notice explains that in order to meet the affordability standard, for employees earning less than 400% of the federal poverty level, an employer can charge up to 9.5% of wages for employee-only coverage. Coverage meeting the minimum essential benefits test must be offered to all full time employees and include an option to cover dependent children up to age 26. Note that the 9.5% threshold applies whether or not children are covered. If the affordability test is met, all eligible family members are ineligible for a subsidy.

(snip)

Consider this: An employee earns $35,000 per year. The employer offers minimum essential coverage to her and her children but her unemployed spouse is ineligible. The wife’s employer charges $275 per month for employee-only coverage, which is—barely—less than 9.5% of wages and therefore “affordable.” The employer charges $500 per month to include the children.

The employee and her children are ineligible for subsidies under the exchange since they have available affordable employer coverage (the employee-only coverage is less than 9.5% of earnings). Her husband would be eligible for exchange subsidies because the family income is below 400% of the federal poverty level. Because of the income level, the children may be eligible for state-sponsored subsidized S-CHIP plans.

************

I'll list the essentials:

  1. Employee earns $35,000/yr
  2. Employee-only coverage = $275/mo (This is just under 9.5% of her salary)
  3. Employee +children = $500/mo or 17% of Employee Income (The IRS ruling says that only the cost of Employee-Only coverage is considered for affordability. But, PPACA does require an option for dependent coverage on parent's policies)
  4. There is no spousal coverage option (there is no PPACA requirement for spousal coverage)
  5. Spouse may purchase insurance through an Exchange and would be eligible for a subsidy (because family income is under 400% of poverty)
  6. Employee & Children do not qualify for Subsidies because the Employee's share of the insurance is affordable.

*******

This Employee & Children do not qualify for Subsidies because the Employee's share of the insurance is affordable. However, in the real world, the plans offered by this employer to this employee are not affordable without some level of subsidy. Thus, many middle and lower income families will not be able to afford "affordable" health insurance offered by their employers.

NOTE I welcome feedback. Please let me know of errors or corrections I need to make, and I'll adjust.

EDITORIAL COMMENT Obviously, this is just ridiculously complex. H&R Block and the rest of the tax preparers must be salivating at what they're going to charge people to figure this stuff out. A much simpler approach would be to lower the age of eligibility for Medicare from 65 to zero. Single payer Medicare for All would save at least $400 billion dollars a year and prevent a lot of suffering, because we wouldn't be paying health insurance companies to profit by denying people care, which is basic human right.

5
Average: 5 (1 vote)

Comments

Alexa's picture
Submitted by Alexa on

question.

Question: I believe that I've read that the "rule" was being considered by IRS that "spouses" who are not employed and not offered health insurance under their spouses employer-sponsored "Group" health plans, are going to be allowed to "shop for insurance" in the Health Exchange (although the ACA did not provide for this, initially).

You mention "but federal subsidies would not be available to help buy insurance for children in the family."

I have not seen any further proposed rulings which would allow one to shop for their children's health insurance in the exchange (as you stated above).

Anyhoo, thank you for this excellent analysis.

Hopefully, someone here may have heard an update the IRS's attempt to amend the "spousal" rule, which I believe was put out for public comment in March 2013.

[BTW, sometimes this 'lingo' is so confusing, it's possible that you've said as much--and I didn't 'get it.' I apologize, if that's what's happend, LOL!]

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

katiebird's picture
Submitted by katiebird on

But, I'm not sure I understand your question.... And if I've missed a chance to be more clear, I absolutely want to fix it.

According to The Benefit Advisor that I quoted in my post, the Unemployed spouse can purchase his/her own insurance through an exchange and possibly get subsidies (this is where I would really like to find the actual decision)

Also, in that article was mention that the Children might be eligible for S-CHIP, but that's something for another post since it's a totally new subject for me!

I really think I'm missing something in your question though (as you say this lingo doesn't make the conversation easy at all) ..... I'm sorry.

Alexa's picture
Submitted by Alexa on

It was garbled, and my "amendment" wasn't much better, I'm afraid.

This is my impression of the 'handling' of non-working (non-covered) spousal insurance under the ACA:

Initially, their is not mandate (still isn't) that an employer cover one's (non-working or working spouse).

Now, I've read that "though a glitch" (which I don't buy for a minute), just as folks who are at 100% poverty level, or lower, ARE NOT eligible to shop in the Health Exchange, EVEN if their state does not cover them as uninsured adults.

I've also read that another "glitch" disallows spouses who are not offered coverage from their spouses employer-sponsored health plans, to shop in OR receive tax credits or subsidies (which only apply if they meet the income requirement of 400% of FPL, or less).

SO, putting aside the first category of potential Health Exchange participants--are you saying that from your research, spouses excluded from their spouse's employer-sponsored plans ARE allowed to shop in either a State or Federal Health Exchange. And that, if eligible, they are also allowed to receive tax credits (or subsidies).

I do apology for the garbled syntax. ;-)

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

katiebird's picture
Submitted by katiebird on

Yes. That IS what I'm saying (points 4 and 5 in the list above). But, I don't know what the subsidy level would be for the spouse. (This will be in another Part)

What a mess!!!

Don't apologize, please! All questions are totally welcome.

Alexa's picture
Submitted by Alexa on

any more info on my account.

So long as your research for this blog did cover this area--hey, that's good enough for me. ;-)

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

Alexa's picture
Submitted by Alexa on

Just found this piece entitled "Unintended consequence of ACA might lead spouses to lose coverage."

In fact, it seems that many employers will actually have an incentive to no longer cover spouses, the report said. The ACA requires that companies pay a fee "per life" for every person they cover under their plans. Currently, that cost to the company is $1 or $2 per person, but will rise to $65 in 2014. As such, those companies which do not start excluding spouses in the remaining months of 2013 will likely start doing so when state health insurance exchanges go live next year.

What this means for Americans:

Of course, the prospect of having a spouse lose coverage as a result of an employer changing their healthcare coverage policies is likely to be tough for many workers to swallow, and because of the mandate that everyone be covered in some way, that will likely force many workers to start seeking policies on their state's health insurance exchange, the report said.

But again, these are likely to be at least somewhat expensive, given that policy prices will likely rise across the board once the ACA's mandates go into effect, and that could strain the bottom lines for many families across the country, particularly if the spouse for whom they are now forced to seek coverage doesn't have a job of their own.

In fact, it seems that many employers will actually have an incentive to no longer cover spouses, the report said. The ACA requires that companies pay a fee "per life" for every person they cover under their plans. Currently, that cost to the company is $1 or $2 per person, but will rise to $65 in 2014. As such, those companies which do not start excluding spouses in the remaining months of 2013 will likely start doing so when state health insurance exchanges go live next year.

In fact, I need to 'reword' my question: Will spouses not covered by employer-sponsored insurance be able to 'shop in the Health Exchange,' and are they extended tax credits if they qualify?

It seems to me that this may just be a backdoor way to force more folks into the workforce.

It's clearly structured so that folks who are not employed (intentionally, or otherwise) are at a great disadvantage (unless they are very, very low income, anyway.) And we all know how Medicaid is becoming more and more 'a racket.'

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

katiebird's picture
Submitted by katiebird on

I edited my post to make the unordered list an Ordered List for easy reference.

And I think you are talking about points 4 & 5 in that list? Is that right.

Here's what I don't like about that point.... On one hand the Employee's policy can be 9.5% of income. What does that mean for the spouse when they go to the exchange, is that also 9.5% .... OMG.

This is why going into this post, I labeled it as Part 1. This story is far from over!!!

Submitted by lambert on

... because I'm the $35K (ha ha ha) individual guy (no family, no dependents).

What I am missing is the sense of who wins and who loses. Does it matter (especially financially) if the whole family is insured as opposed to individuals within that family?

An example would help (in fact, we might use this).

"Homer Simpson is employed and his whole family is ensured under his employer's group plan: his wife, Marge, who is not employed, and their children, Bart and Lisa. However, under the PPACA....."

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

katiebird's picture
Submitted by katiebird on

I keep asking my former co-workers if they've heard anything about next year's plans, but there is no news yet.

One thing though, in the last 2 years I went from a $200 deductible (per year, per person) to a $2000 deductible (per year, per person).

Didn't "we" used to assume that $2000 deductible plans were pretty bad? Well, mine costs +25% of our income for Mister and me. Which is insane.

Thus, my interest in subsidies. And I've got more to say about that.

Submitted by lambert on

It seems like there's a matrix of options:

1. Spouse gets company insurance and no subsidy

2. Other spouse goes on exchange and gets subsidy

3. Kids go on Medicaid or some other program.

Aside from the insanity of forcing a family to do this, are those options right, and how does the money work out?

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

Rainbow Girl's picture
Submitted by Rainbow Girl on

1a. Spouse rejects employer policy (because unaffordable in his/her real world), goes on the exchange and buys full-price (unsubsidized) policy (or goes without and pays penalty). [is this permitted by PPACA?]

2a. Other Spouse goes on the exchange, but earns too much to be eligible for subsidies, and buys unsubsidized exchange policy (or goes without and pays penalty).

If 1a and 2a are possible scenarios, you could have families where the only covered persons are the children on Chips or Medicaid.

katiebird's picture
Submitted by katiebird on

1) Spouse gets company insurance and no subsidy

Then, How do they determine the subsidy for (2) Other Spouse?

Spouse(1) is already spending 9.5% of household income just for his/her policy.

All the scenarios I've seen for calculating subsidies looks at this table (pdf):

Income Level Premium as a Percent of Income
Up to 133% FPL 2% of income
133-150% FPL 3 – 4% of income
150-200% FPL 4 – 6.3% of income
200-250% FPL 6.3 – 8.05% of income
250-300% FPL 8.05 – 9.5% of income
300-400% FPL 9.5% of income

So the family is already paying the 9.5% for Spouse(1) company insurance, Does PPACA require Spouse(2) to cough up another 9.5% of the family income?

Because .... No matter how you calculate income (AGI/MAGI -- whatever) 19% is pretty clearly going to be unaffordable for most families.

Rainbow Girl's picture
Submitted by Rainbow Girl on

So the family is already paying the 9.5% for Spouse(1) company insurance, Does PPACA require Spouse(2) to cough up another 9.5% of the family income?

This is a key question. Another way to phrase it: Is the IRS rule for calculating "affordability" in the employer-insurance context also used if someone is just buying direct from an exchange? What if Spouse 1 declines employer coverage and decides to go on the exchange to buy a policy for his family. Is the "affordability" in this case measured only based on Spouse 1 or does the exchange system take into account affordability for the whole family?

Alexa's picture
Submitted by Alexa on

there is no limit on what a Spouse can be asked to pay (if she wants coverage, that is) in the Health Exchanges.

Remember--if it's too expensive--go down to a cheaper plan!

The 9.5% applies ONLY to the individual employee's income (as a test of affordability).

If one if a "non-working spouse" like myself, there is not limit what I can be expected or demanded to pay in the Health Exchange, IF Mr. Alexa's employer should decide NOT to cover spouses of employees, beginning in 2014.

His employer quit covering "working spouses," three years ago.

And no individual (employee) can refuse coverage from their employer UNLESS the premium that is offered by one's employer EXCEEDS the 9.5% affordability test.

IOW, if Mr. Alexa's employer offer insurance to him (or to both of us, even), if the premium that they have set EXCEEDS 9.5% of his salary--then he can shop in the exchange.

But ONLY THEN. And his spouse can't run around shopping in it either (moi) if his company extends the offer to me.

That's my understanding. It sucks.

The truth is there is LITTLE CHOICE for most folks.

Most "Group" employees will take a haircut--either with increased group premiums, or by having their spouses tossed into the Health Exchange, where (if they don't qualify for a subsidy)--they are completely at the mercy of the insurance companies.

And I'll add the disclaimer: If I'm wrong--please do correct me. I welcome all information!

One more disclaimer: I'm 'wearing down,' LOL! Please excuse typos, syntax, etc.

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

katiebird's picture
Submitted by katiebird on

The Benefit's expert above says, "Her husband would be eligible for exchange subsidies because the family income is below 400% of the federal poverty level."

And the subsidies are designed to send money to the insurance companies to cover the amount between "The Cap" on what people in the

My question is, what is his cap? is it also 9.5% of the household income?

(And will navigators be able to answer this question)

Alexa's picture
Submitted by Alexa on

anyone's, regarding 'the cap.'

The problem will be for some who are on a "group" plan now--are sick and being treated, IOW, are AWARE they're ill, unlike some who are ill, but uninsured, and may not even know it--will practically HAVE TO buy health insurance through the exchange, even if the "cap business" allows them to avoid a penalty. (If that makes any sense.)

There will definitely be some who will at all costs (whether it means giving up homes, etc.) probably to go any length to KEEP insurance, if they are very (much less gravely) ill.

So, "a cap" will be a moot point, for some.

But, it would be a good riddle to resolve, especially in light of Rainbow Girl's "CAP" article.

Looks like we didn't start any too soon to try and decipher this mess. ;-)

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

Alexa's picture
Submitted by Alexa on

to convey is that even for American adults who are NOT required to buy insurance, or pay a fine or penalty to IRS because their employer-offered insurance plan(s) for "employee's only" EXCEEDS the 9.5% threshhold, some are likely to be very, if not gravely ill, and therefore be forced to shop in the Exchange.

And since there are NO DOLLAR LIMITS ON POLICY PREMIUMS (imposed by the federal or state governments on insurers--that I know of)--in essence, many Americans will be completely at the mercy of the insurance industry, when it comes to what they must pay for the privilege of carrying health insurance.

I would would think that many adults who've been uninsured for some time (if they have no reason to believe that they are ill), will simply chose to continue to go uninsured.

However, it seems reasonable that a fairly large number of adults who are currently insured through their employers, and are cognizant of their "health status," will feel that no matter what the cost (say--if they are being treated for cancer)--they MUST buy coverage, even if their only choice is to shop in the Health Exchange and pay premiums several times higher than their group plans.

I just wonder how many additional foreclosures (and possibly bankruptcies) will result from this "piece of crap law."

[I'll stop now before my comment becomes even more garbled and confusing. ;-)]

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

Alexa's picture
Submitted by Alexa on

Hey, Lambert, don't claim to fully understand ANY of this crap.

But there are winners and losers, as you mentioned earlier.

"Group" insurance beneficiaries (or whatever or want to call them) are probably the "biggest losers."

I think that KB is still checking on some of the "spousal regulations" regarding whether or not they will be eligible for the tax credits (or subsidies).

I hope that they allow them, but it won't help me any, if Mr. Alexa's company throws me off his plan. And since I wouldn't be eligible for a tax subsidy, my insurance premium could be astronomical.

I never give out actual specific personal information "on the internets," but let's just say that I'm still not old enough to file for "early" Social Security (age 62) yet, but I'm a Boomer.

IOW, I'm be old enough to have to pay very expensive (3:1 ratio) premiums, and with no subsidy. There is "no cap" on premiums that I've every heard of?

Unless, there's one that I haven't heard about. Am I wrong? Does anyone know, for sure?

Anyway, if I'm correct that there's not, clearly someone in my position would have major concerns to go from about $500 per month for insurance (for a couple), to maybe $1,000 or more for just my policy.

I believe that it was in the CounterPunch article--ObamaCare: A Deception--that it says that these premiums may be as high as 3 times higher than the MassConnnector policies.

Yikes! I check them out when it first opened--they were astronomical! Many times over what Mr. Alexa and I were paying in the mid-2000's or whenever it first was established.

The "age rating" is ridiculous. They brag about eliminating the pre-existing clause, but they substitute it with an "age-rating." Pleeeeeezzzzz!

They are many others like myself who are "retired" a bit earlier than the official Social Security or Medicare age. And not all of us are offered insurance through our last employers.

Time will tell, but I think it was "Let's" who expressed amazement that the Dems have done this.

I don't believe (taken with the Grand Bargain and cuts to Social Security and Medicare) that they'll hold office for at least a decade or two. If anything, they probably stand to do better in 2016 (because ALL of the horrible effects probably might not have been felt by enough Americans to hurt them at the polls by then), than they will in succeeding years.

Who knows? I may be 'eating crow' in a couple of years. I guess time will tell . . .

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

katiebird's picture
Submitted by katiebird on

We follow the Simpson Family from state to state. Finding the best fit for them. One day they live in California, how does the PPACA work for them. Maybe come up with a couple of income/employment options.

If we do it as the states make the details of their plans available that might work. ??

(Who knows. It's also quite likely that we won't know anything about our own situation until we sit down to meet with an Employee at HR Block)

Submitted by lambert on

No family! But I think that would be a useful trope (like Bob, Carol, Ted, Alice with crypography explainers).

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

Alexa's picture
Submitted by Alexa on

Does it matter (especially financially) if the whole family is insured as opposed to individuals within that family?

Yes, it does matter--tremendously.

As Mr. Bacon's example from another couple of threads here demonstrates, the Health Exchange compared to employer-sponsored "Group" health plans will be much more expensive (especially for those who don't qualify for subsidies.)

Remember, you can have a working class income, and still not qualify for subsidies. Or at the least, the subsidies don't even reach into the level considered "middle class." It is not generous for an individual or two adults.

[Fairly decent, for a family of four, however.]

You can be that 'moi' will be all over the internets "squalling about it" if I'm thrown off Mr. Alexa's Group Health Plan.

You can 'take that to the bank,' as they say. ;-)

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

Rainbow Girl's picture
Submitted by Rainbow Girl on

One small suggestion. When describing PPACA provisions on "affordability" or "income," it might be helpful to note always that "income" is not take-home pay but gross income (or MAGI, which is close).

This would help a potential ACA insurance exchange customer to evaluate the true cost of an exchange policy, i.e., if they don't qualify for a subsidy under the "9.5% standard" they should independently evaluate the "affordability" of a $275 premium not against $35K gross, but against the take-home part of that annual gross salary. Example: If the person making $35K pays all-in taxes of 30%, then take home pay is $24,500, which is the dollar amount against which to intelligently evaluate the affordability (to the individual) of a $275 monthly premium.

For the same reason, it may be helpful in every explanation of PPACA that references a monthly premium, to add a footnote or parenthetical that says something along the lines of: "It is important in evaluating the affordability of a PPACA Exchange insurance policy you take into account not only the monthly premium -- which will be a fixed monthly cost -- but also the deductible or deductibles in the policy that you will have to pay for out of pocket (in addition to the premiums) before the policy begins to cover your expenses for health care."

Alexa's picture
Submitted by Alexa on

amazed that Dems thought they could sell this atrocity they call the ACA.

Just a preliminary glance at it seems to suggest that it will be a complete catastrophe for most folks.

Of course, I don't really believe that the intention was so much to "help" anyone, as it was a help those in the medical profession make good on their services sold (so to speak).

Sort of like they tightened up the "Bankruptcy Laws" about the time that medical premiums started to skyrocket. I was convinced at the time that it was the major impetus for that bill.

They're not concerned with whether or not any of us actually receive health care--only that our bills "get paid, LOL!"

Anyway, I agree that the two points that you mentioned probably can't be emphasized enough.

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]

Submitted by lambert on

" federal subsidies would not be available to help buy insurance for children in the family."

So how does a family net this out?!

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

Rainbow Girl's picture
Submitted by Rainbow Girl on

What does "net this out" mean?
(serious question)

Submitted by lambert on

It seems that ObamaCare makes this extremely difficult to answer. Are there calculators for it?

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

Rainbow Girl's picture
Submitted by Rainbow Girl on

Good question. I haven't seen any. Nor have any been trumpeted by Obama's PR machine (and you would think after the news coverage of this, er, little issue one would have materialized pretty quickly ... if it would have helped the campaign.) If you think about it, though, the calculators are pretty much designed to only work for 1 person. A calculator to deal with the ridiculously complex issue that has been revealed re. this particular family scenario ... even the creative class geniuses would have a hard time coming up with something. Especially since the calculator would have to include functions like: "your kid has to go on Chips or Medicaid" and "spouse doesn't get subsidies but could buy a policy but only for herself". I'm not a software designer but the specs for this project seem ... as impossible as the reality they are supposed to capture!

katiebird's picture
Submitted by katiebird on

This totally common scenario is the perfect example of why this mish-mash of so many buckets is unworkable.

We can only hope that HR Block and their competitors will work it out by October. And I'll be amazed if it happens at all.

Also, people will only get the help they ask for. Most of the people in this situation will give up WAY before they buy insurance for their family. The Penalty (whatever it turns out to be) will be so much more straight forward, it'll seem like the only option.

Submitted by lambert on

If in fact it's not resolvable.

At this point, I'm not sure whether the issue is (a) overly complex rule formulation or (b) missing data or indeed both.

Are there regulations that have not been issues, for example?

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

Submitted by lambert on

If it takes you that long to figure it out... it's fucking complicated. No question about it.

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

Rainbow Girl's picture
Submitted by Rainbow Girl on

An ACA overview at Center for American Progress (CAP)'s website says:

"Under the law [PPACA] no one will be required to pay more than 8 percent of his or her family’s household income for health insurance."

http://www.americanprogress.org/issues/lgbt/report/2013/05/23/64225/the-... [Scroll down to "Exemption from 'shared responsibility payments'".]

How does this statement square with the ACA rule that an insurance policy offered by an employer is "affordable" to the employee if it is less than 9.5% of the employee's income?

Am I missing something or is the statement on the CAP website possibly inaccurate?

Alexa's picture
Submitted by Alexa on

the "CAP" statement: "Specifically, a family with income equal to 250 percent of the FPL will pay 8.1 percent of its income to enroll in the reference plan (about $4,000) and will receive a subsidy of about $11,000, and a family with income equal to 350 percent of the FPL will pay 9.5 percent of its income (about $6,700) and will receive a subsidy of about $8,400."

Here's a link to factcheck.org (which I don't really trust, frankly). But at least it references an"8%" figure.

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

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Rainbow Girl's picture
Submitted by Rainbow Girl on

... looks like, to me. That would render the statement on the CAP website ("nobody will pay more than 8% of their income for health insurance" [paraphrased]) somewhat not quite accurate or at a minimum, extremely confusing. (1) Because if this is the number they refer to, it's 8.1% not 8% and (2) because at different multiples of the FPL there are different and higher threshholds, e.g., the employee example we have been discussing where the ACA says that 9.5% of employee's income is "affordable" as far as paying for health insurance goes.

To be continued (monitored).