Gestetner: I Am of the 7 Million Who Signed Up for Obamacare

Yossi GestetnerThe Obama administration is boasting that 7 million people signed up for an Affordable Care Act (ACA) plan; or what some call Obamacare. My wife and I signed up late last week for a Bronze Plan which is one before the bottom in the 5-rung system of Catastrophic, Bronze, Silver, Gold and Platinum health plans available in New York.

Since we cannot afford healthcare, we enrolled in one of the cheapest plans within the Bronze category. Many hospitals, excluding local community hospitals, do not accept this plan. It apparently fails to cover many procedures, and the plan has annual $12,700 deductibles and co-pays if we actually need care.
The premium for this junk plan is $665.78 a month or $7,989.36 for the year. This plan is just for my wife and me. It does not include the kids.

Due to our income level of recent months, we are eligible for healthcare subsidies which reduces our premiums to only $2,025.36 for all of 2014. Paying $2K for a plan that covers two adults seems a great relief, but here are the problems:

1) The plan provides very limited preventative care, but because our plan kicks in only in May, I dont know if those services come with co-pays. I have not seen my plan yet and certainly not paid the first premium. But even if preventative care does not have Co-pays, it would be cheaper to pay for preventative care directly to the doctor and pharmacy than spending $2,000 on premiums.

2) God forbid if either of the two on the plan need serious medical care, we will get hit with up to $6,000 in deductibles and another $6,700 in co-pays. This is strange because if the ACA system understands that we cannot afford $8K in premiums (hence the large subsidy), why does the system assume that we can afford up to $12,700 in co-pays and deductibles in case either of us turn sick?

Basically, If we are healthy, it’s cheaper for us to pay preventative care directly on our own. But if we do need serious care, we can anyway not afford it despite “being covered” so why bother having this plan in the first place?

It gets worse. If my income starts to rise later in the year or if I have a windfall profit in December, the IRS will collect back some or most of the healthcare subsidies when I file my 2014 taxes. This means, my premiums for this weak, essentially worthless plan will cost us much more than the $2K I am slated to pay. Esentially, not only would we pay more and a higher percent of our income in tax, we will be hit double by retroactively paying thousands more for this plan which brings very limited value.

Buying a catastrophic plan was not an option because it is not eligible for subsidies and it would cost about $4,000 in annual premiums; money we could not commit ourselves to paying. Buying a Silver or Platinum plan was certainly out of the question because while it comes with lower deductibles and copays, it costs too much in premiums.

But after sleeping on our Bronze plan-in-waiting for a few nights, we may decide not to actually buy it (first premium is due at the end of April). Instead we will need to pay the Obamacare penalty for the sin of not having enough money to buy health insurance whose cost spiked due to the same law which will panelize me for not affording insurance. (The statistics showing a slow-down in healthcare cost in recent years started in 2008 thanks to the economic pullback which left many people without employer health insurance.)

My story and the story of many others illustrates that there is nothing to boast about the 7 million private plan signups. Many people signed up simply to be in compliance with the law. Others signed up not grasping what level of co-pays and deductibles awaits them mid-year, and that they may be hit with a subsidy chargeback during tax season at the end of the year.

So what is the solution?

Democrats claim no one should “profit” from care. Using this thinking, the (Federal) government should give up the hundreds of billions of dollars it profits from the medical industry in form of tax collections. Doing so (i.e. letting the medical industry operate without a tax burden), would instantly reduce medical cost by huge numbers. But instead of reducing tax burdens on companies in exchange for reducing prices, Obamacare added tax liabilities on the medical industry. Hence a junk Bronze plan for two people costs $8,000 a year!

Democrats also claim that healthcare should be a “right” for every American. Using this thinking, the (Federal) government should remove FICA/Income tax liabilities – dollar for dollar – if people show that they spent the money on their healthcare “right” instead. These two steps would make healthcare affordable and encourage people to buy plans on their own will instead of buying plans with a threat of a penalty.

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  1. One issue in a row

    1) Which procedure doesn’t it cover?
    2) In an emergency situation you can go to any emergency room
    3) the 12,700 deductible is for the family, each individual has a 6,350 deductible
    4) You don’t buy insurance in case you stay healthy (hopefully until the 120), you buy it in case you become sick, and need tens of thousands dollars in care, or even hundreds of thousands
    5) I’m not very familiar with this, but there is a way in the tax return to recoup a lot of the deductible expenses if you’re the income level you sound you are
    6) you’re point number 2, is only if both (you and your wife) have problems, if only one has, the numbers are exactly half of what you just wrote, and part of it will be recouped in you end of year tax return
    7) Your argument that if you need care you can’t afford it any way. I totally don’t get it, would you compare having to come up with 6,350 the same as having to foot the whole bill, (tens of thousands, for simple procedures, and hundreds of thousands for serious things).
    8) Well if your income goes up (I wish it for everyone), you’ll pay more, simple, what’s the problems with this. Do you have any other solution? How can someone know how much you’ll be earning the end of year?

    At the end you have to admit, $2,000 for coverage, (although not the best, but still covers every condition, without caps, or unlimited co insurance) is a bargain, and you should be thankful for Obama.

    • Yossi Gestetner

      - We cant afford $6,300 in deductables.

      - these plans dont cover many procedures so in case we chv turn sick, we are anyway left holding a bag way larger than $6,300 per person

      - $2,000 for a plan that works only if you are healthy is a joke as outlined in the article.

      - If we need real care we are as scrwed this year as we would be last year so no thanks.

      - This plan is not accepted in many key ny hospitols.

      - in case of a slip or an accident, the property/car owner’s indurance anyway picks up most cost. In case of another illness, this plan covers very little so please get your head out of Obamas backside.

      • Section 1402 from ACA

        Sec. 1402. Reduced cost-sharing for individuals enrolling in qualified health plans. The standard out-of-pocket maximum limits ($5,950 for individuals and $11,900 for families) would be reduced to one-third for those between 100-200 percent of poverty, one-half for those between 200-300 percent of poverty, and to two-thirds for those between 300-400 percent of poverty.

        Explanation
        The 5,950/11,900 is adjusted to inflation currently 6,350/12,700 (individual/family)

        From the size of your subsidy it sounds like your probably in the 100-200 percent (I may be wrong) which means your total out of pocket expenses would be limited to 2,167/4,334, and of you’re in the 200-300 group you’ll be limited to 3,175/6,350, and if you’re in the 300-400 group (unlikely due to the size of you’re subsidy, I believe you’re probably in the 150-200 category) you’ll be capped to 4,233/8,466.

        I don’t know exactly how it will work, I couldn’t find any more information (I remembered reading about it when the law passed that it will be given in the tax return in a form of a refundable tax credit, but couldn’t find out any more informaiton, the IRS still didn’t give out the publications for 2014) maybe you as a reporter, and who have a personal interest in this, will be able to find out more, I just quoted the law as it was passed.

      • to your points

        - I posted section 1402 which answers your question

        - Which procedures doesn’t it cover, please be specific. It’s impossible to argue with such vagueness

        - Who said it doesn’t work when someone becomes ill?

        - If someone needs real care can choose a doctor from the network, walk into any emergency room of any hospital and get their service without having to pay for it, or buy a policy which covers what you need the same way it was done until now, but can’t be denied due to pre-existing condition (which in essence was the reason the mandate was created).

        Until now if someone needed real care and couldn’t afford it, could either die, walk into an emergency room and play games with the hospital (Reagan care), and be forced into bankruptcy.

        - It generally takes years to see dime from insurance companies, many cars aren’t covered for more than $25,000, and you may have many other people in line for this money (injured people, or damaged cars). In many cases in a slip you can’t sue (in NYC in city property, it’s almost impossible to sue). But what if someone needs an appendix removed, (could cost $30,000) who is going to pay it?

      • I found this, It might be helpfull for you. (If you care, you sound like you only care to bash Obama Care).

        http://obamacarefacts.com/obamacare-subsidies.php

        ObamaCare and Out-of-Pocket Subsidies (Cost Sharing Reduction)

        In order to receive out-of-pocket assistance (AKA cost sharing reduction subsidies), you must buy a Silver plan from the state exchange and an individual or family must have incomes no more than 250 percent of the Federal Poverty Line. This means that families in the lowest income group pay no more than 6 percent of its share of out-of-pocket expenses, while those at the upper level of the group pay up to 27 percent of out-of-pocket expenses. Combining Advance Premium Tax Credits with Out-of-Pocket subsidies creates an average subsidy of about $5,000 for families and individuals. But, low-income families get larger subsidies and those with several children get the most.

        Income Level Actuarial Value (the amount of costs a Silver plan will cover due to cost sharing reduction subsidies for % of the Poverty Level).

        100-150% FPL 94%

        150-200% FPL 87%

        200-250% FPL 73%

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