Personal responsibility key to ACA


January 28, 2014 - 12:00 AM

One core concept at the heart of the Health Insurance Marketplace under the Affordable Care Act (“Obamacare”) is that everyone should contribute to the best of their ability for their own healthcare. Low- and moderate-income consumers are eligible for subsidies to help pay premiums and cost-sharing expenses such as co-pays and deductibles, but they have to pay what they can. Subsides allow the purchase of health insurance through companies that already do business in our state. Companies like Blue Cross and Coventry.
This is not a new idea, especially to Kansans. It was a central part of the Health Equity and Access Reform Today Act of 1993 supported by both Senators Bob Dole and Nancy Kassebaum. This was the Republican alternative to the failed “Hillary-Care” of the day. It was incorporated into Bob Dole’s presidential platform in 1996. It is an idea founded on self- reliance and a free market.
But have no doubt about it, this is a real help that can make a huge difference in the lives of people who struggle to afford healthcare. It can make the difference between putting care off until it is a crisis, going to an emergency room at the last minute where care is most expensive and least effective. Instead, the newly insured can get preventive care, check-ups, screening and regular visits to a doctor who they know and trust. Sometimes we refer to this as having a “medical home.” A medical home can improve the quality of care and add years to life.
There are two kinds of financial help available from the marketplace. The first is help paying the premiums, called Advance Premium Tax Credits. This help is available to individuals and households who have incomes between 100 percent and 400 percent of the Federal Poverty Level (FPL.) What happens below 100 percent of FPL is a sad story, and the topic of an upcoming column.
FPL has two contributing factors, income and family size. A single person with an income at $11,490 earns 100 percent of federal poverty level. So does a family with a father, mother and two children earning $23,550. On the high end of eligibility for financial help (400 percent FPL) a single person can earn $49,960 and a family of four $94,200. Of course the amount of the subsidy is lower with a higher income. But I’m sure you can see most working families in Allen County are eligible for some level of subsidy.
Let’s look at a couple of examples of these subsidies. First let’s examine Abe, a 30-year-old single person earning $8 an hour and working 40 hours per week. That’s $16,640 per year. If Abe chooses the least expensive Silver (70/30 cost share) policy, BlueCare SaverPlus Select, he will pay $51 a month toward the total premium of $191 a month.
Now let’s look at Carol, 40, whose husband is 45. They have no children. She and her husband earn $48,000 a year. It would cost them $378 a month toward a total premium of $470 to insure both her and her husband on the same Blue-Care SaverPlus Select policy.
But remember, there is a second kind of subsidy that might also apply. This is a subsidy not on premiums, but on deductibles, co-insurance and co-pays, referred to as a Cost Share Subsidy. Cost share subsidies are available for incomes between 100 percent of the federal poverty level and 250 percent FPL. So Abe, who earns 141.49 percent FPL, gets a Cost Share Subsidy while Carol’s family, 305.15 percent of the FPL, does not. You can see how this subsidy works by comparing the individual deductible on each policy. Remember these are the exact same policies. Carol’s individual annual deductible is $3,000 each year. Not uncommon, but still a significant burden. It does at least assure them they will never face bankruptcy because of medical bills.
Abe’s individual annual deductible is only $250 per year after the Cost Share Subsidy. This makes what would be an impossible barrier for a low-income earner something they can manage, albeit with difficulty, and allows them to contribute toward their own healthcare.
Thrive Allen County offers assistance of trained and vetted navigators to help residents of Allen County enroll in the health insurance marketplace. Call 365-8128 for an appointment.
— John Robertson

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