What the Health Care Reform Bill Will Mean for You and Your Family

Appearing on CNN yesterday morning, Senator Orrin Hatch (R, Utah) groused about what he called the “Europeanization” of health care. Translated, that means that we have decided to take a more collective approach to survival. If you cannot afford health insurance, your fellow citizens will help you pay for it.

Hatch is correct: in 2014, a family of four earning $88,200 (or four times the federal poverty level) will get a subsidy to help buy insurance in the new Exchanges. $88,200 may sound like a fortune if you live in Idaho (where median income for a family of four is $58,000), but in Maryland, Massachusetts, Connecticut, and New Jersey, $88,200 is actually less than median income for a family of four. Even in New Hampshire, median income for a family of four is $87,396. (Half of all families of four earn less; half earn more. In other words, a family that size bringing home $88,200 in New Hampshire is smack dab in the middle of the pack.)  See this fascinating table that shows median income for individuals as well as families including of two to six people in all fifty states. It’s startling to see how widely incomes vary in different parts of the country.

What Hatch doesn’t acknowledge is that premiums will be significantly higher in states like Connecticut--where the cost of virtually everything, including labor, real estate and a doctor’s visit is higher than in Idaho. This why a Connecticut family of four earning, say, $70,000 will need some help. At this point, we don't know just how high premiums will be in any state because we don't know how much health care will cost  in 2014. What we do know is that over the past 10 years, the amount that insurers have paid out in reimbursements to doctors, hospitals and patients has been climbing by roughly 8% a year as both prices and volume climb. (Each year patients are undergoing more tests and treatments while also taking more drugs.) Even if health care inflation slows over the next three years, premiums will almost certainly be higher in 2014 than they are today.  The goal, under reform, is to “break the inflation curve” so that the cost of care isn’t spiraling faster than GDP. Ideally, our health care bills would rise no faster than the average workers’ wages.
 
Moreover, it's important to remember that the subsidy is set on a sliding scale: a family of four earning $86,000 would get a small tax credit; a family of four earning $30,000 would receive a much larger subsidy. For a calculator that lets you see how much help you will receive, based on income, family size, and current insurance status, go to this site, click on "Health" near the top of the page;  scroll down and click on "What Does Health Bill Mean to Me-- List of Resources to Help." Scroll down on that page and you’ll find links to some good information including a helpful calculator from the Washington Post that lets you see: 1) what percent of your income you would be expected to pay for premiums, 2) your maximum out-of-pocket costs for co-pays and deductibles as a percent of total costs, and 3) how reform would affect your taxes.

The good news is that, in 2014, when the full reform plan rolls out, people who earn up to 400 percent of the federal poverty level ($88,2000 for a family of four, $44,320 for an individual) will not have to spend more than 9.5 % of their income on premiums. Low-income families who don’t qualify for Medicaid would be expected to pay only 3%. The government would help subsidize the rest.

The legislation also puts a lid on how much a family is expected to pay out-of-pocket in the form of co-pays and deductibles. Again, the caps are set on a sliding scale. For example, cost sharing for a family earning 100 to 150 percent of the federal poverty level (FPL) is capped at 6% of total costs; those from households earning 150 to 200 percent of the FPL will pay no more than 13% of total costs; and out-of-pocket expenses for households earning 200 to 250 percent of the FPL will be capped at 27% of total costs. (If you’re buying insurance in the Exchanges you will have the opportunity to choose a plan that requires less out of pocket spending, though the premiums will be higher.)

Hatch really should take a look at the information at the Now Public site. He might feel better. Or he might not. But I think that most Americans will find that the more they learn about reform, the less scary it becomes.

Comments

[Tom Degan]

It was a lot of fun watching these idiotic Republicans “warning” the Democrats that the passage of health care reform will cost them dearly at the polls in November. It’s going to cost someone dearly, alright, but it won’t be the Dems. Former Bush 43 speechwriter Davin Frum put it perfectly yesterday when he said that it was the Republicans – not Barack Obama – who had met their “Waterloo”. The historical rule of politics, that an incumbent president’s party always loses ground in the midterm elections, will go out the window come November. They will be unable to win without the help of the moderates. At this moment the moderates are abandoning this sinking ship en masse. The extremism of people like Michele Bachmann and John Beohner is starting to scare the hell out of them. Gee, I wonder why!

Then there is the sticky situation of the Tea Party. By this late point it must be obvious to even the casual observer that this is an organization comprised of morons. It was formed as a protest movement against high taxes – immediately after President Obama passed the largest middle class tax cut in American history. There’s no denying it, these are not the brightest people on the planet. Their overt racism notwithstanding, they sure are funny! One self identified Tea Partier called into C-SPAN’s Washington Journal the other day asking the moderator where she could write to her congressman. When host Greta Brawner asked this idiotic woman what her congressman’s name was, she replied (I assume with a straight face) “He’s a Democrat. I don’t know his name.” Ya gotta love ‘em! Ya just gotta!

http://www.tomdegan.blogspot.com

Tom Degan

[Denise]

If people under 65 will have their out-of-pocket medical costs capped, what about folks on Medicare? There is no cap on the 20% Medicare co-insurance. As an insurance agent I have met many seniors who cannot afford $150-$200/month for a Medicare Supplement (plus $35 for a Part D plan).

Many Medicare Advantage plans now have caps on annual out-of-pocket expenses, but $3,400 or $5,000 is money many seniors don't have. Will their be any relief for seniors besides the donut hole fix?

Cuurently seniors can get Medicare Savings Plan help if their income is 135% of the federal poverty level. Will that be raised to 150%? That would help a lot of seniors I have met.