Affordable Care Act- The Non-political Thread

[Abagadro]

Per request, I'm happy to talk about the ACA and how it will work/ramifications of it as it comes into implementation in the next year.  This is not about the politics of it, just the actual nuts and bolts.

I don't claim to be an expert but I am involved in the implementation from the employer's side so know a fair amount about its practical effects and also get to sit in meetings with our consultant who does know a lot about it.

So, feel free to ask any questions and I will do my best.

My overall opinion is that it will be very interesting to see how all this will shake out. It will both squeeze employers, shift how hours are handled in any employer subject to the Act, and broaden the insurance pool. The real test is whether costs come down which no one knows yet although there are some encouraging signs.

[Quinton]

What I'm curious about is what it means for somebody looking to not work for a while.  I've been toying with taking a year or two off to pursue personal projects, see if they evolve into something startup-ish or not, or so on for a while now, and I'm definitely spoiled by getting reasonable health care through my employer without much hassle (certainly many people are not so well off, but California tech companies tend to be reasonable to their employees, thankfully).

It sounds like the private exchange thing should allow for some choice of plans where costs vary based on coverage level (deductible and so on) and coarse demographics (age, location, etc), but otherwise work more like the employee-provided plans I'm used to (don't have to jump through a lot of hoops to get coverage, just pick one that has the features I want, sign up, make my payments, and off I go).  Does that line up with reality?

Obviously, COBRA has me covered for a year and a half, but it's nice to have options, especially should I decide I like working on my own or have difficulty finding a job down the road, and the cost of the health care my employer provides is non-trivial when I'm paying all of it, instead of 10% or whatnot.

[Lakov_Sanite]

Let's say I don't have medical insurance right now. Would it behoove me to wait until this starts and if so/when does it?

[Numtini]

If you want an idea of what's available and how it's organized, you can look at the Mass exchange that's been up for several years.

Mass HealthConnector

[Abagadro]

It sounds like the private exchange thing should allow for some choice of plans where costs vary based on coverage level (deductible and so on) and coarse demographics (age, location, etc), but otherwise work more like the employee-provided plans I'm used to (don't have to jump through a lot of hoops to get coverage, just pick one that has the features I want, sign up, make my payments, and off I go).  Does that line up with reality?

Pretty much.  The exchanges are designed to act more like employer plans then the current private market (which are basically shit because of waiting times, pre-existing exclusions, etc.) and also you can get subsidized based upon income level.

[Abagadro]

Let's say I don't have medical insurance right now. Would it behoove me to wait until this starts and if so/when does it?

Well, if an exchange gets up and running in your area and you want insurance, then its a decision as to whether you want to buy insurance as far as timing goes. The subsidized plans have to be in place by 10/1/13 so you might want to wait until then if your income is low enough to be subsidized (for a single person that is around 42k of income)  On 1/1/14 though, which isn't that far off, you are required to have insurance or you have to pay the penalty. The penalty ramps up from 2014 to 2016.

EDIT: I should also say that your employer may be required to offer you insurance next year and if they do offer an "affordable" plan (which is based upon a percentage cap in relation to income) then you have to take it rather than hitting the exchange.

[Mrbloodworth]

Friend of mine is self employed, has been for years, owns the business ( Employee of one, but supports himself and his wife ). He has no health insurance of any kind. Quite sure he makes bellow the poverty level for this area, even if he lives comfortably by his standards.

Whats the outlook look like for him, and what kind of subsidies are we talking about. Can things like the money he pays out for health care impact his taxes on a business or personal level?

[Abagadro]

The subsidies are a sliding scale and depend upon the number of family members in his household.  The way it is present is a bit backwards as the tables don't show the subsidy but rather the maximum premium, so any cost over and above that is basically a subsidy. Federal poverty level for a two person household is approx 15k, so the subsidy will vary up to 60k in household income.

[Ghambit]

Let's say I don't have medical insurance right now. Would it behoove me to wait until this starts and if so/when does it?

In some cases, no... because the majority of providers are trying to lock people into a "cheaper" plan before they raise rates.  i.e. they're threatening to.

Though, I caught myself laughing in an agent's face when she gave me that spiel.  I basically told her she wasn't paying much attention in economics class; because the reality is, with the increased competition and downward cost pressures, there's NO way insurance will become more expensive due to ACA.  They're really just using that tactic to get people signed up and semi-committed.

Anyways, most plans are month-to-month (quit or switch whenever) so your question is kind of moot.  The key is not letting yourself go un-insured for more than 6-months and making sure you stay vigilant with picking the right insurer.
I just picked up a cheapo preventative plan for $30/month while I wait for the exchanges to go online in October.

[Sky]

That chart does not seem helpful.

[Trippy]

or have difficulty finding a job down the road

[Pennilenko]

Lots of good info in this thread, thank you Abagadro.

This may not be as simple a question as I think it is. What is the penalty for going uninsured? For instance, if you can't even afford insurance at a subsidized rate.

[Abagadro]

It starts out in 2014 as the greater of 95 dollars or 1% of your household income over $9,750, per person in the household.  So if you make $25,000 and are single, the annualized penalty (it is assessed based on the number of months uninsured) would be $152.50.  If you are married it would be a total of $110 (25k-19.5k*.01*2).

In 2015 it goes to the greater of $325 or 2 percent. In 2016 it is 695 or 2.5 percent.

There are some caps and such for number of people in household, but that is the basics.

[Abagadro]

That chart does not seem helpful.

It's a government chart. You expect it to be helpful?

[Ghambit]

Lots of good info in this thread, thank you Abagadro.

This may not be as simple a question as I think it is. What is the penalty for going uninsured? For instance, if you can't even afford insurance at a subsidized rate.

The real penalty for going uninsured is having to pay heftier fees for insurance since you're likely pretty unhealthy and/or a much riskier claimant.  I'm not sure of the exact metrics on that though.  Odds are it mostly applies to folk over 35, and moreso still for retirees. 

This is why I opted to at least get SOMETHING before the exchanges open.  This way I know where I stand (after physicals, bloodwork, stress tests, etc.) before shopping.

[Tannhauser]

Generally speaking, will signing up for ACA be cheaper than the healthcare provided by my work?  I'm single and paying $80 a month on medical alone. 

Also, what's to stop my employer from dropping our health care? 

[Numtini]

The real penalty for going uninsured is having to pay heftier fees for insurance since you're likely pretty unhealthy and/or a much riskier claimant.  I'm not sure of the exact metrics on that though.  Odds are it mostly applies to folk over 35, and moreso still for retirees.

Nope, all that was swept away. Rate setting is based on age and tobacco use and these have relatively strong controls on how much extra can be charged. Sex and other health conditions are no longer allowed as criteria for rate setting.

The penalty for non-insurance is $95 the first year, $325 the second, and $695 the third. There are waivers for the non-insurance penalty if insurance costs more than 8% of your income.

Generally speaking, will signing up for ACA be cheaper than the healthcare provided by my work?  I'm single and paying $80 a month on medical alone. 

Also, what's to stop my employer from dropping our health care?

It's extremely unlikely it would be cheaper. Even for a 20 year old, the cheapest plan locally in the exchange is $180 a month. $80 is lol cheap. I seem to remember something about being able to drag your employer subsidy to buy insurance in the exchange if your insurance sucks, but I can't find the details. (Or it might be part of the Mass system and different in the ACA.)

Right now, there's nothing stopping an employer from dropping insurance. Under the ACA there will be a $2000 penalty for each full time worker who isn't covered. A lot of people are predicting that employers will stop offering insurance, but they predicted that here in Mass too and it just didn't happen.

[Ghambit]

So, if you've never had insurance and at age 42 decide to suddenly get some...  your cost will be the same as a fully preventive-PPO insured 25 yr. old who just decides to switch carriers?  I find that hard to believe.

[Numtini]

So, if you've never had insurance and at age 42 decide to suddenly get some...  your cost will be the same as a fully prentative-PPO insured 25 yr. old who just decides to switch carriers?  I find that hard to believe.

Well they aren't doing it out of the goodness of their hearts. It's part of the law.

Through the Mass health connector: 25 year old $227/month -- 42 year old $280/month. Difference is for age only, not previous coverage. That's for a "bronze" low end (Pay 20% hospitalization up to $5k out of pocket annual limit) It could go up to $394/$485 for a Gold plan (no deductables, $150 hospitalization copay)

There are also special plans for age 26 and under that would go as low as $180 without prescription coverage or $207 with.

Subsidies for an individual start with an income below 34,000.

[Quinton]

As I understand it, the whole point of the "individual mandate" of the ACA is to move towards a model where everybody is insured (it's required, there are subsidies, there are penalties, etc), at which point (in theory) there aren't people who've had no health coverage for significant portions of their life, etc.   Obviously there is a transition period, but it seems like a reasonable step in the direction of universal healthcare, something people take for granted in much of the civilized world these days.

Numtini -- that Mass exchange site is pretty good.  The better silver plans or cheaper gold plans seem in line with or are a bit less expensive (for similar coverage) than what I'd be paying for the healthcare provided by my employer if I left and took advantage of COBRA. 

[Pennilenko]

My wife and I struggle to pay for insurance on our son. A couple hundred extra a month would strangle us. I am hoping competition really does make it more affordable. Otherwise It looks like the penalties will be cheaper.

[Abagadro]

Generally speaking, will signing up for ACA be cheaper than the healthcare provided by my work?  I'm single and paying $80 a month on medical alone. 

Also, what's to stop my employer from dropping our health care? 

If you have "affordable" care from your employer (which is defined as less than 9.5 percent of your income) you most likely won't be eligible for the exchange.

As stated above, the employer gets hammered by penalties. All employers over 50 employees have to offer affordable coverage to their employees or get fined (it is more than 2k a year last I heard. The number I've seen thrown around is 250 per month).

[Abagadro]

So, if you've never had insurance and at age 42 decide to suddenly get some...  your cost will be the same as a fully prentative-PPO insured 25 yr. old who just decides to switch carriers?  I find that hard to believe.

They removed individualized rating (well, more like severely restricted it), so that goes a long way to eliminating those types of differences.

[Numtini]

Numtini -- that Mass exchange site is pretty good.  The better silver plans or cheaper gold plans seem in line with or are a bit less expensive (for similar coverage) than what I'd be paying for the healthcare provided by my employer if I left and took advantage of COBRA.

The non coinsurance bronze plan is better and cheaper than what I get as a municipal employee. (Of course not cheaper than my share of the employer provided plan.)  

[Sky]

Wow, I thought when our rates jumped to $360/mo (half subsidized by employer, so $720/mo) and they slashed benefits, we were getting screwed. Turns out it's 'affordable'. About twice as expensive as the last plan and copays went from 0/20 to 30/50 (and little things like only two dental visits a year covered vs four under teh old plan, I go 3x a year, so it's another $120 or so out of pocket). And it went from covereage through retirement to nothing after retirement. That when I sat my boss down and told her we were going to have a talk about unionizing.

I know this isn't about the politics, but I don't post in the politics forum :) Our personal plan is to move to a country with socialized health care at the first possible opportunity. We're just in a general disgust of the idea of for-profit health care and consider it a basic human right more important than say, gun ownership. Sure, it would raise taxes, but would it raise them more than what you pay for insurance? Would the abolition of insurance companies (another abhorrent concept, people paid to find ways of not paying for your health care...ghoulish) not be the first step toward better healthcare?

Sorry, as I said I don't post 'down there', but this issue so is extremely repellent I can't help it.

[Nebu]

It becomes a trade-off, Sky.  Affordable routine care vs access to specialized care.  While I'm not a huge fan of health care being a for-profit industry, it does have a few benefits... particularly if you are wealthy enough to afford the best services.

I also want to thank Abagadro for doing this.  I've read the ACA twice and much of the language makes it tough for me to wade through.  I can see some good in the intent of the bill, but the compromises made along the way to passing it made for an overly cumbersome mess.

[Abagadro]

That's not that bad. We are self-insured (so there is a very low admin fee and no "profit" involved) and our insurance is over 1k per month per employee.  A lot of employers on private group plans are paying 1100-1500 per month per employee.

[Reg]

Nebu's right. There's no question that if you can afford the best of American health care it's better than what you would get in Canada.  Not necessarily because the US gets better outcomes but because that extra money pays for way nicer rooms with lots of attentive nurses and half decent food.  In Canada if you don't have a family member around to make trouble things can get kind of awful.  That's why so many of the Canadian 1 percenters go down to the States for surgery.

On the other hand the worst Canadian health care is a hundred times better than what an uninsured American would get.

[Sky]

I forgot we had so many wealthy people on f13.

[Numtini]

Nebu's right. There's no question that if you can afford the best of American health care it's better than what you would get in Canada.  Not necessarily because the US gets better outcomes but because that extra money pays for way nicer rooms with lots of attentive nurses and half decent food.  In Canada if you don't have a family member around to make trouble things can get kind of awful.  That's why so many of the Canadian 1 percenters go down to the States for surgery.

On the other hand the worst Canadian health care is a hundred times better than what an uninsured American would get.

Maybe I'm not 1% enough (and this is probably political), but I took care of a Canadian friend who had cancer and the care was superior to anything I've experienced in the US.

[Reg]

Really? Maybe things have changed. I visited an aunt down in the US (Arizona) twenty years ago and her care was awesome. Dozens of nurses on her floor, a nice bright private room and what seemed to be good care. At least she recovered and lived 15 more years after. My experience in a Canadian hospital was much more recent and much more dire. Horrendous food, not enough nurses, grey dismal rooms etc. My mom recovered so I have no complaints about her actual cancer treatment but if my brother and I hadn't been around to make trouble she'd have been totally ignored except for a daily diaper change.  Even with us trying to make sure she got attention she came home with a bedsore that hasn't healed to this day.

But maybe that particular Canadian hospital was just shitty.

edit: Sorry. I'm taking this thread way off topic. I'll shut up now.

[Abagadro]

Stay on target!

[schild]

I forgot we had so many wealthy people on f13.

I didnt. Donation drive is still below goal.

[Merusk]

I forgot we had so many wealthy people on f13.

Not sure if serious but..

We do have a good number in the upper 75% (even if they don't realize it) and a few of the 1%.

[Morat20]

Generally speaking, will signing up for ACA be cheaper than the healthcare provided by my work?  I'm single and paying $80 a month on medical alone. 

Also, what's to stop my employer from dropping our health care? 

Bear in mind, that 80 dollars a month may or may not be the actual, full cost of your healthcare. Because they get a tax break for it, employers often more generously fund benefits rather than offer higher salaries.

I think my company pays some sizeable percentage of my insurance for me -- so the rate I see (the X a month I pay) is actually not the full cost. Which is why going on COBRA (Is it COBRA? CORBA?) can be such a sticker shock,