July 22 2011
ObamaCare Could "Firewall" Middle Class Families
Note: The following scenario would be a good use of the idiom, "between a rock and a hard place."
ObamaCare says that if your employer offers an "affordable" health insurance option, you have to take that option before jumping into the statewide subsidized health insurance exchanges to look for other options. Affordable is defined as 9.5 percent of your income, or less. But... here's the problem. Did they mean for that threshold to apply to individual plans, or family plans? There's a big difference, in terms of prices and coverage. A lot of people could fall into this category: the offered individual policy is "affordable" but the family policy is not.
There have been two different interpretations, and this is creating a problem among policy wonks in D.C. But in 2014, this could create a problem for middle class families all across the country.
One interpretation, held by ObamaCare proponents, from day one, is that this 9.5-percent threshold would apply to family policies. That would make a greater number of people eligible for the subsidized exchanges. But the other interpretation, held by Congress's Joint Committee on Taxation, is that the threshold applies to individual plans. This means if Sally's job offers her an insurance plan that's "affordable" for her, then her family would be in a tough spot. She couldn't afford to cover them through the plan her employer is offering, but they wouldn't be eligible for the exchanges either.
Oh yeah, and if they don't have insurance at all... that's going to be illegal too, and they'll face a penalty for that.
Healthcare reform proponents say they've quietly been talking to the administration for months about the issue.
Quietly? Of course quietly! Because...
"It's going to be a massive problem if it comes out that families have to buy really expensive employer-based coverage," said Jocelyn Guyer, deputy executive director at Georgetown University's Center for Children and Families.
"If they don't fix this - and by 'they' I mean either the administration or Congress - we're going to have middle-class families extremely unhappy with [healthcare] reform in 2014, because they'll basically be facing financial penalties for not buying coverage when they don't have access to any affordable options."
So, what's the big deal? Can't we just tell the Joint Committee on Taxation that we have to go with the other interpretation? The problem with doing this is, it changes the cost of the subsidized exchanges, because it makes a lot more people eligible. (And you could just call these "subsidies" a Health Insurance Company Bailout, because families will never see this money, it goes directly to insurers):
One new study, by the Employment Policies Institute, estimates that changing the policy could cost taxpayers $50 billion per year. But if the administration leaves the policy as is, "millions of families will be stuck in a no-man's-land without affordable coverage through their employer or the exchange."
"Whichever interpretation holds," the study concludes, "the consequences are significant."
Others dispute those figures. They argue that employers will offer affordable coverage for whole families and point out that many children who aren't covered by employer family plans are eligible for Medicaid or the Children's Health Insurance Program.
I'm really impressed with all the ways the costs of this law were twisted and hidden from the American people. Fifty billion more each year? Just put it on our tab.
(And one more thing... "children who aren't covered...are eligible for Medicaid??" Haven't we heard enough lately about the poor access Medicaid patients have to the care they need? Especially kids? Give me a break!)