Wednesday, November 13, 2013


Have you tried the calculations yet to see what kind of impact Obamacare would have on your finances? I don’t mean have you suffered through the glitchy website signup, which wastes your time while collecting your personal data; I suggest you avoid that indefinitely. No, I mean have you used the Kaiser site, just to do the calculations. 

The Kaiser ACA Calculator
My son Political Sphere gave it a try. Actually, he went two place online: both the Kaiser calculator, which has some limitations, and the site, but only using the "view plans now" option, rather than actually trying to sign up. So, hopefully, that means no permanent data collection. Anyway, here are the results.
He has been going without health insurance for some time. He and family are that combination of healthy and poor, making up the large majority, I’m guessing, of the purposely uninsured. This does not mean they get no health care; they just pay for it, in cash, when they need it. This included even the birth of Little PS2, with the help of a midwife. (Little PS1 was born with the help of the same midwife, but finances at that time led Mr. Spherical Model to pay that bill out of pocket, so he claims his granddaughter belongs to him—bought and paid for. We humor him.)
Now that Political Sphere is in law school, he is required not to be working. Mrs. Political Sphere works part time at a fast food restaurant and also takes college courses. There’s a scholarship that is covering law school tuition this year, and then there’s a sizable student loan to cover such amenities as school books, rent, food, and clothing for growing children. Things are tight, as you can imagine.
So Political Sphere goes to the calculator websites and inputs that data. It turns out, as you’d expect, their income is so low (well under 50% of the poverty line), they can’t be expected to pay ACA marketplace prices. They are turned over to Medicaid. But then things get kind of ironic.
You know that big student loan for living expenses? The one they’ll be paying interest on for years to come, but was a necessary cost of the schooling investment? Yeah, that counts as “income” according to Medicaid. For Medicaid purposes, taking out a loan that you have to pay for with interest is considered being what you might call “flush with cash.” The federal government agrees they’re way too poor to be buying health care; nevertheless, negative income (debt) makes them too rich to be receiving Medicaid. [Aha moment: government thinks debt is income—that explains a lot.]
So what is the government’s solution? Go to the website and find yourself a policy for, oh, say, $272-$432 a month for catastrophic coverage only. (The Kaiser calculator only gives averages by level and does not include catastrophic coverage as an option.). Catastrophic coverage means you pay 100% of the costs of your medical needs except for a list of serious expenses. Or you can go up to $334-$592 for the Bronze level coverage (that price is based on just two parents receiving coverage, assuming the children are already on Medicaid). At the Bronze level, you pay 40% of your medical bills. For additional money (this is general information from the Kaiser site), you can step up to the silver plan, where you pay 30% of your medical costs. All of these, according to a note on the Kaiser site, come with the proviso that out-of-pocket medical expenses (over and above premium costs, if I'm understanding correctly) can top out at $12,700 a year, which may exceed 100% of your annual income. Such a deal!
How do you pay those premiums? Maybe they assume getting additional loans of up to $600 a month is no problem, but it kind of is for people in the real world. So maybe they expect the family to just live on the streets instead of paying rent, which is about an even exchange, cost-wise. They have made it a law that you must buy insurance, but they have not made it a law that you must house your family.
They require everyone to buy insurance, because the whole “even the playing field” idea doesn’t work unless you force young healthy people to pay as much as older unhealthy people pay. And we need to be “fair,” after all.
Or PS and family can be sensible and continue doing what they’re doing—paying cash when they need to take the kids in for checkups, and ignore the mandate. That first year the fine is relatively low. It gets collected out of tax refunds—which you don’t pay when your income is that low. However, the government “returns” several thousand dollars more as a “tax refund” when you’re that poor, so this means they’ll "collect the fines" by paying any poor family that ignores the mandate a little bit less.
The second year fines go up, but by then there’s only one more year until law school is over, and it might be possible to consider buying healthcare coverage. We’ll see.
Still, at that point, wouldn’t a health savings account be a much better deal for a healthy young family than being forced to subsidize someone else during their very early career years? Assume they pay a few hundred a year in medical costs, as they’ve been doing (and paying cash up front does get you the best deals), and they pay $5000 into a health savings account, instead of into a policy. By the next year, that $5000 is earning interest. They do it again; by the end of two years, they have a health savings account with $10,000, plus interest. Just a few years of paying themselves without having to pay out, and they can self-insure. And if they were worried about catastrophic coverage, they could buy that at a free-market rate of around $100 a month (pre-Obamacare market pricing) and still have most of that money left for the health savings account.
On this past Saturday’s Wonderful World of Stu show (Stu Berguiere on The Blaze TV), he went through a list of why Obamacare isn’t the great deal it was said to be. Here are a few:
·        You can’t keep your plan after all—40-67% will have to change, because any tiny change eliminates the “grandfather” protection, and the law forces plans to change. [Political Sphere told me that when Obama said, "You can keep your plan. Period," he actually meant "asterisk." I thought that was clever and I was going to quote him, but he said he heard it on radio and doesn't remember which radio host to credit.]
·        Saying that those in the “individual” market are only a few is disingenuous: government estimates that number at 93 million Americans, with some more accurate estimates saying it’s at least 129 million people. Numbers go higher when people lose their employer coverage by losing their jobs, or when employers find it a better deal to pay a fine than to pay for more expensive plans.
·        The price for the whole of Obamacare was sold to voters as $900 billion over 10 years (without counting the first 4 years). But it’s really more like $1.88 trillion.
·        The average family was supposed to see premiums go down by $2500, but the average family actually has premiums going up by $3000. So the government “misunderestimated” costs to families by $5500 a year--and we could add that Affordable Care Act is a sadly ironic name.
·        Obamacare, according to Pelosi, was to be a great jobs creator—4 million new jobs, with 400,000 of those right away. In real world math, Obamacare will cause a loss of 800,000 jobs.
You get the idea that all those planners involved in this whole ACA mess don’t like to be bothered with details like math (or truth). That’s something third graders might get away with, but it’s really not acceptable from the calculating tyrannists insisting we give up our freedoms, because they claim they know better than we do how to make our personal spending decisions.

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