ibm retirees losing corporate health plan 2
Toward the end of Thread One, Lionheart made some very interesting observations.
Posted by lionheart z5 NY (My Page) on
Fri, Sep 20, 13 at 14:25
Unless you're mostly subsidized, the exchanges are not a very good option. You mostly get a choice of HMOs with a limited provider list. You will only be able to use the providers on the list. Depending on the plan, a number of local doctors, urgent care centers, and hospitals are not accessible. You may or may not be able to go to your previous providers.
Plus, you have to pay 30% out of pocket costs for a silver plan, and 40% out of pocket costs for a bronze plan. That's after your deductibles, which can be another $2000 or more out of pocket if you make $28k per year.
Catastrophic plans are not subsidized, and not much cheaper than bronze of silver plans. Or, you can get a gold or platinum plan if you have more disposable income. But why would you? - the benefits and options are really narrow. You would be better off going away from the exchanges if you don't have a subsidy, and get a better policy for the same or a little more money.
This is by design. The exchanges offer comparatively crappy plans, with insurers hoping that you will come to them directly to get a better plan off of the exchanges. You won't get your subsidy, but unless you are really poor the subsidies aren't enough anyway.
Spending 10%, 20%, or more of your take-home income on premiums, deductibles, and co-pays is a good deal for people who are sick with a catastrophic illness, but not for people who are healthy.
This cuts into their disposable income - which isn't much around here after paying for rent/mortgage, utilities, groceries, and transportation. If you're bringing home less than $30k per year and living on your own, you are not living the high life.
I know my own 26-year-old daughter is going to sit this year out, unless she gets a job where the employer provides insurance. The preliminary numbers, as of last week, are not affordable and she does qualify for a subsidy. We have been playing around with the numbers for the last several weeks.
Right now she works in a 5-person shop and there is no employer subsidized insurance. She lives on her own and has a very tight budget, drives an old car, is trying to figure out how she is going to afford any non wood-based heat this year, if it comes to that. It's not like she has a lot to spare after all of the taxes she already pays. There's not much room for another $250-$300 per month for subsidized health insurance that doesn't cover much and doesn't let her go to her current providers.
As a practical matter, the subsidies offered aren't enough to bring in the young and/or healthy, who really don't gain much from being in the exchanges, but lose much of their disposable income that is used for living expenses.
Not offering enough subsidies to hook people in was a strategic error.
They are better off taking the penalty, which can only be assessed if the IRS owes you a refund anyway. So retool your deductions so that you end up owing the IRS a small amount, and skate through for a year or so.
There is nothing "affordable" here unless you are so poor that you are getting generous subsidies. It will be interesting to see how it plays out."
The final post in Thread One was from Dockside, who asked a question as that thread reached its limit. So I'm posting the question here for Lionheart or anybody else who would like to respond:
Dockside asked: "And what happens to any of these young and/or healthy when they suffer a catastrophic accident or get MS or some other chronic, debilitating disease? I guess they can then apply for ACA coverage. This is when I cry "personal responsibility". There should be at least a waiting period of 6 months to a year for coverage for anyone who declines coverage and then applies and expects their condition to be covered under the ACA. People might then be inclined to determine whether it's worth it to pay a fine.
We buy auto insurance even tho' we don't expect we'll be in an accident. We insure our homes and property even though we don't expect that our homes will burn down or suffer other loss. So, why should we take a chance on our health? A chronic illness or bad accident could cost many times as much as a house that needs to be rebuilt.
Catastrophic care for the young and healthy makes sense."