Anatomy of an Obamacare ‘horror story’

by Maggie Maher:

A lack of fact-checking by the media lulled into profiling the false accounts of individuals with a political agenda.

Some simple changes to improve ACA (Part One)

Here are some simple “fixes” that would reduce confusion over ACA provisions, help further the individual goals of the statute, and possibly improve the efficiency of signing up ACA customers, and the reason why they are needed.

1) Eliminate the Medicaid gap for non-expansion states: The ACA provides that  taxpayer units (individual or joint followers) are eligible for premium assistance tax credits when household income is between 100-400% of the federal poverty line. At the time of drafting, it was assumed that all any person with income under 100% of the FPL would be enrolled in Medicaid, as the terms of the original statute essentially mandated expansion in all states. (States which did not agree to expansion would have faced loss of federal funds).

However, after the US Supreme Court struck down the Medicaid provisions, half of US states opted out, meaning that individuals who earn less than the FPL who live in those states are not eligible for subsidies on the exchanges.  This leaves many of the neediest individuals out in the cold, and undermines the central goal of ACA: to provide insurance for all.

Forget the plan – let patients keep their doctors!

I think there are two important points that are missing from the intense media focus — and now the White House response – to the problem of the insurance cancellation notices on the individual market.  Both are the result of actions that have been taken by insurance companies which are now participating in the exchanges — in other words, they are barriers to acceptance of ACA created by the same insurance companies that are the chief beneficiaries of the new, heavily subsidized insurance market.

The promise that “if you like your insurance, you can keep your insurance” was essentially written into the law, by the express terms of the original ACA legislation. There was a “grandfather” clause which expressly allowed consumers to keep whatever plans they were enrolled in prior to March of 2010, subject to some requirements to strengthen those plans.

The problem is that many consumers who buy their own insurance on the market have switched plans since then, giving up their grandfathered status.  It’s not that they didn’t like the plans they had; rather, those plans got too expensive. So very often the switch was to another, seemingly better or less expensive plan offered by the same company.   

Who’s Left Out? (Part Two)

The goal of the Affordable Care Act was to help several large classes of people who had been excluded from the insurance market because of rising prices and previous insurance practices. Those consisted mainly of people who could not afford to pay for insurance, and people who could not buy insurance at any price because of present or past health problems.

But most Americans already had insurance.  According to a recent NBC News report, 32 percent of Americans get government-sponsored insurance such as Medicare or Medicaid.  Among those too young for Medicare, 58 percent get health insurance through an employer.

Employer-provided insurance typically offers more choices and better coverage options than policies available on the individual market.  The ACA was never intended to disrupt or undermine that market, so the ACA specifically excludes individuals who are eligible for employer-provided insurance from subsidy eligibility.

There is one exception: if the cost to the employee of the employer-provided subsidy is more  than 9.5% of the employee’s income, then that person can shop on the exchange instead and receive a subsidy if the income is low enough. 

Who’s Left Out? (Part One)

The goal of the Affordable Care Act is in its name: to give every American an affordable option to buy health insurance.  

Unfortunately, there are two groups of people who may find themselves left out, and stuck with no affordable option. 

One group are the adults with household incomes of less than 100% of the poverty line.  When the law was written, it included a massive, federally funded expansion of Medicaid, guaranteeing that all adults with poverty-level incomes would be enrolled automatically in Medicaid.  In fact, under the expansion, the cutoff for adult eligibility for Medicaid rose to 138% of the poverty line. ^[1] (Children were already eligible through passage of earlier laws).

Because that group was guaranteed care through the government-run program, they would not need to pay for premiums on the exchange, nor would they need subsidies.  So eligibility for subsidies was restricted to those with incomes between 100% and 400% of the poverty line.

However, in 2012, the United States Supreme Court ruled that the Medicaid expansion part of the ACA was unconstitutional.  The problem was that Medicaid is administered separately by the states, and Congress had written the law as a take-it-or-leave-it proposition that punished the states who didn’t sign on. If the states agreed to the expansion, they received a massive influx of federal funding to support the new programs.  But if they turned the federal government down, they would lose their already existing federal funding for the more limited Medicaid programs already in place. 

Falling off the cliff…..

The really cool part about Obamacare, especially for we older folks, are the subsidies. 

The really terrible part about Obamacare, especially for we older folks, is what happens if our incomes too high to qualify for subsidies, but just barely.

Here’s why:

The part that makes the care “affordable” is that everyone who earns income between 100% to 400% of the federal poverty  line gets a tax credit for any amount that we pay that is above a certain percentage of our income. That percentage varies, but is no more than 9.5%.  Because we need to pay our insurance premiums right away, the law has another perk: we can choose to claim that tax credit in advance, and the government will pay it out in monthly installments directly to the insurance company.