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What's the Real Story on How Much Obamacare is Going to Cost?

Early calls on costs may be premature, especially given rising corporatization of healthcare.
 
 
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Photo Credit: Andy Dean Photography/ Shutterstock.com

 
 
 
 

Loyal Dems were over the moon with reports from California that the costs provided by insurers of various levels of plans on state exchanges were coming in under CBO estimates, as well as below prices on the current small-group market. The early huzzahs survived an effort to claim otherwise by Avik Roy at Forbes; his creative footwork with numbers was shredded in the blogosphere (although still curiously repeated by Reuters).

A bit more serious challenge to claims of early success on the cost front comes from Ohio, where Republican officials brayed that premium increases next year would average 88%. The analysis appears a bit sus, since it included some pretty crappy plans in the baseline. But while more detached commentators weren’t happy with how Ohio officials ran the numbers, they didn’t appear able to debunk the idea that costs would be higher for most people than before, even though the higher costs might indeed result from plans providing more comprehensive coverage.

One big issue is that the Republican-led states are doing a good job of throwing sand in the gears of implementation, which means it’s likely that consumers there will indeed have reason to be less satisfied. These states have refused to implement state health exchanges, throwing the task on the Federal government, and also nixing Medicaid program expansion, which will leave a lot of low-income people out in the cold.

But reader martha r has been poking around the information in her state, Vermont, which is now being touted for coming in with lower-than-anticipated cost forecasts, like California. But the plans don’t strike her as affordable for locals. She writes:

Newly up on the website for the Vermont implementation of ACA:
http://healthconnect.vermont.gov/tax_credit_calculator

I’ve queried them on whether one should enter one’s gross or net income. But you can play with different numbers and see how it comes out.

A not at all uncommon salary among my neighbors–I live in a condo community with many single women living alone, social workers, teachers, nonprofit directors, and the like– in this area is $35K.

That may seem shockingly low, and for many it is not tenable, so after they try to make a go of it in Vermont they decide to leave and seek better paying work elsewhere.

But for the hard core who get Vermont into their blood and can’t bring themselves to leave, this low a salary is not at all unusual. Hopefully, one also has benefits–but not always.

So you might try entering $35 or $40 or $45K and see what these lower-middle income people are going to get.

For a single person, the cutoff seems to be $46K–at $46.1K, you get zero subsidy. at $46K you get $77 per month–the minimum subsidy. Here’s how that plays out:

Screen shot 2013-06-12 at 4.50.41 AM

For a single person, at S46K gross on a salary (not self-employed with a home office deduction and the like), or $3833 per month before taxes, who can afford $370 per month? Perhaps those who have paid off their mortgages or nearly so?

I admittedly only have a personal datapoint, but in New York, which has to be a higher cost state, my current plan is a bit better than silver (plus I have some very valuable features, like coverage anywhere in the world, plus no network or primary physician gatekeeping, and external appeal to New York State) and my costs are markedly lower than the silver plan cost in Vermont. And I’m over 50.

A new article by Karen Higgens at Alternet gives some other reasons why the cheerleading is overdone. For instance: