The ACA as originally conceived included a mandate that all Americans obtain health insurance. That meant that anyone not covered by their employer or Medicare or some other way would have to purchase health insurance through heath insurance exchanges. Everyone. The idea was that the premiums would be affordable because the pool would be large and would include healthy young people. The Republicans objected to this universal mandate and in order to get the bill passed it was stripped out. Young healthy people did not participate and premiums were therefore higher than originally anticipated. That’s how the Affordable Care Act became unaffordable. It’s been so ever since and the situation just gets worse and worse. A quick and easy fix would be to reintroduce the mandate. It’s a tough sell politically but anything else is even tougher which is why the Republicans have not come up with a plan of their own.
Twenty years ago my wife and I were self employed I paid 750 per quarter for insurance with a 2500 dollar deductible for each I'm sure that cost has gone up
I was a recruiter for many years Some people could not change jobs because insurers would not insure pre existing conditions With the new bill, to the largest extent, that would be the case again
People that lose their jobs generally have to go on COBRA to have insurance Even with a short unemployment there is typically a waiting period to get insurance again
With 24 million Americans buying their own insurance, using a very conservative additional cost of 1K each per month I believe that works out to almost 250 trillion a year
A lot of the elderly will be put into pools that have a higher cost
This is confusing to me too. Per Gabe you have to be at or above the poverty level to get any ACA subsidies, and the biggest subsidy is given if you are just over the poverty line, so that's the income people are reporting. I think if you are under the poverty line you get Medicaid instead. Maybe Gabe is saying people may be overstating their income to get ACA for free instead of Medicaid?
In states where Medicaid has been expanded, anyone whose income is under 138% of the federal poverty level is eligible. So the main reason to inflate your income here would be if you live in one of the states that hasn’t expanded Medicaid, some of which set eligibility for Medicaid well below the poverty level. A person just below the poverty level in those states wouldn’t qualify for Obamacare subsidies (because they are below the federal poverty level) or Medicaid (because they are above the threshold in their state), which is why they might inflate their income to appear eligible for Obamacare.
If I understand correctly, a dollar less spent on Obamacare doesn't necessarily save the government a dollar in the long run. An uninsured person may forgo preventive care (mandated under ACA coverage), driving up their healthcare costs that will then be picked up by the government through hospital reimbursements and eventual Medicaid or Medicare enrollment.
Thanks for the great explanation! I never really understood how these subsidies worked and you did a fantastic job explaining it! You should be a teacher! 😀
Thanks for writing this piece - I've been struggling to figure out what was really going on with the subsidy fight and how it fit in the overall ACA scheme as passed and this piece checked all of the boxes. I am wondering if what's coming out of the White House is, once you decode it, some idea to provide some sort of HSA payout (implies everyone has them) so that marketplace buys could come from HSAs (which normally is not possible).
Wouldn't it be cheaper for the government to sponsor (dare I say it - socialize) healthcare all the way around? Everything lumped in there Medicare, Medicaid, all healthcare - would it be cheaper for government to provide healthcare instead of insurance companies which just seem to be a middle man between money and medicine?
You answered your own question when you dared to say the word. FDR and every Democrat since has wanted socialized health care, as seen in many other deveoped countries. As their experience shows, it, too, has flaws (including lots of opportunities for fraud). Obama got us closer to that goal than anyone else has, but it remains a political 3rd rail
Some hospitals and clinics and physicians and insurance company stockholders are getting rich off of poor people and sucking the oxygen from taxpayers.
The ACA as originally conceived included a mandate that all Americans obtain health insurance. That meant that anyone not covered by their employer or Medicare or some other way would have to purchase health insurance through heath insurance exchanges. Everyone. The idea was that the premiums would be affordable because the pool would be large and would include healthy young people. The Republicans objected to this universal mandate and in order to get the bill passed it was stripped out. Young healthy people did not participate and premiums were therefore higher than originally anticipated. That’s how the Affordable Care Act became unaffordable. It’s been so ever since and the situation just gets worse and worse. A quick and easy fix would be to reintroduce the mandate. It’s a tough sell politically but anything else is even tougher which is why the Republicans have not come up with a plan of their own.
Thanks for this reminder. Perhaps bit of legislative history would help us all understand this political issue
There are some other things to compare in this
Twenty years ago my wife and I were self employed I paid 750 per quarter for insurance with a 2500 dollar deductible for each I'm sure that cost has gone up
I was a recruiter for many years Some people could not change jobs because insurers would not insure pre existing conditions With the new bill, to the largest extent, that would be the case again
People that lose their jobs generally have to go on COBRA to have insurance Even with a short unemployment there is typically a waiting period to get insurance again
With 24 million Americans buying their own insurance, using a very conservative additional cost of 1K each per month I believe that works out to almost 250 trillion a year
A lot of the elderly will be put into pools that have a higher cost
Hospitals and clinics are mandated to see anyone
Preventive medicine reduces medical cost
These are the real costs were looking at
Gabe. Awesome explanation. I would bet that some Senators and Representatives do not understand how this works.
Ok, I am stupid. Why would anyone overstate their income. Wouldn’t they receive more benefits the lower their poverty level. ANYONE CAN ANSWER PLEADE
This is confusing to me too. Per Gabe you have to be at or above the poverty level to get any ACA subsidies, and the biggest subsidy is given if you are just over the poverty line, so that's the income people are reporting. I think if you are under the poverty line you get Medicaid instead. Maybe Gabe is saying people may be overstating their income to get ACA for free instead of Medicaid?
In states where Medicaid has been expanded, anyone whose income is under 138% of the federal poverty level is eligible. So the main reason to inflate your income here would be if you live in one of the states that hasn’t expanded Medicaid, some of which set eligibility for Medicaid well below the poverty level. A person just below the poverty level in those states wouldn’t qualify for Obamacare subsidies (because they are below the federal poverty level) or Medicaid (because they are above the threshold in their state), which is why they might inflate their income to appear eligible for Obamacare.
And also, you are by no means stupid for asking! I’m sorry that wasn’t made more clear in the piece.
Gabe, I'm not following your chart reading here:
" 6.3% of their income towards their premiums; the enhanced tax credits knocked that down to 2%."
Looks like the enhanced premium is 4% (we are comparing "final premium" right?)
And what is an initial v.s. a final premium?
This is the best explanation I've read on this issue.
If I understand correctly, a dollar less spent on Obamacare doesn't necessarily save the government a dollar in the long run. An uninsured person may forgo preventive care (mandated under ACA coverage), driving up their healthcare costs that will then be picked up by the government through hospital reimbursements and eventual Medicaid or Medicare enrollment.
Thanks for the great explanation! I never really understood how these subsidies worked and you did a fantastic job explaining it! You should be a teacher! 😀
He IS a teacher, and a damned good one!
Thanks for writing this piece - I've been struggling to figure out what was really going on with the subsidy fight and how it fit in the overall ACA scheme as passed and this piece checked all of the boxes. I am wondering if what's coming out of the White House is, once you decode it, some idea to provide some sort of HSA payout (implies everyone has them) so that marketplace buys could come from HSAs (which normally is not possible).
Wouldn't it be cheaper for the government to sponsor (dare I say it - socialize) healthcare all the way around? Everything lumped in there Medicare, Medicaid, all healthcare - would it be cheaper for government to provide healthcare instead of insurance companies which just seem to be a middle man between money and medicine?
You answered your own question when you dared to say the word. FDR and every Democrat since has wanted socialized health care, as seen in many other deveoped countries. As their experience shows, it, too, has flaws (including lots of opportunities for fraud). Obama got us closer to that goal than anyone else has, but it remains a political 3rd rail
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Dems. This might help us lower costs of helcare!
Some hospitals and clinics and physicians and insurance company stockholders are getting rich off of poor people and sucking the oxygen from taxpayers.
Exactly