Subsidy? Really?

I’ve been trying to get to the bottom of the “subsidy” question ever since Obamacare passed.  I’ve seen many premium estimates, and fancy charts, but nothing that had any sort of legitimate information or sourcing to back it up.  I’m not sure if this calculator from Kaiser is even really the best estimate out there, but they seem to keep updating it as things change.  This is the third version I’ve seen on Kaiser’s website.  Keep reading for some stats I made while using this calculator.

From Kaiser:  This tool illustrates premiums and government assistance under the health reform law signed by the President. Beginning in 2014, tax credits will be available for people under age 65 who purchase coverage on their own in a health insurance Exchange and are not covered through their employer.  Calculator: http://healthreform.kff.org/Subsidycalculator.aspx#incomeAgeTables

Samples – Keep in mind, I think it is the young adults that are getting the shortest end of the stick (27-30), as they are the ones least likely to have employer insurance and most likely to be price gouged, so I’m using them for most samples.  You can use the calculator yourself to see where you stand:

Single adult, aged 29 years.  Annual income of $18,000 in a high premium area.  Yes, that is a $4,069 annual premium someone who is in the “young invincible” group that normally wouldn’t buy insurance.  By my estimates, that is the same insurance package that this person would only pay about $1,000 a year for now.  Affordability Act?  Really? 

 

Projected income in 2014 156% of poverty
Unsubsidized health insurance premium in 2014 adjusted for age (Based on an age factor relative to a 40 year-old of: 0.75)
Maximum % of income the person/family has to pay for the premium if eligible for a subsidy
Actual person/family required premium payment (which equals 4.30% of income and covers 19% of the overall premium)
Government tax credit (which covers 81% of the overall premium)

Single adult, aged 29 years.  Annual income of $24,000 in a high premium area

Projected income in 2014 209% of poverty
Unsubsidized health insurance premium in 2014 adjusted for age (Based on an age factor relative to a 40 year-old of: 0.75)
Maximum % of income the person/family has to pay for the premium if eligible for a subsidy
Actual person/family required premium payment (which equals 6.60% of income and covers 39% of the overall premium)
Government tax credit (which covers 61% of the overall premium)

So just after those two comparisons, I can see that insurance premium rates are going to be 4 times what they are now (which is conservative from what some say) and that the subsidy is expected to drop the rate of the person near the Medicaid line to the price that is still MORE than what they would pay right now.  And that is still IF the subsidy happens, but I don’t see how we can afford such a large government subsidy while still getting the country out of debt (wasn’t that part of the Act?).

One more sample just for kicks.  59 year old single adult, income of $55,000.

Projected income in 2014 478% of poverty
Unsubsidized health insurance premium in 2014 adjusted for age (Based on an age factor relative to a 40 year-old of: 2.26)
Maximum % of income the person/family has to pay for the premium if eligible for a subsidy  
Actual person/family required premium payment (which equals 22.19% of income and covers 100% of the overall premium)
Government tax credit (which covers 0% of the overall premium)
 
 

Wait, where did the subsidy go?  $12,206 a year just for the premium?  And no subsidy?  Plus, if you read the fine print in the calculator, it estimates this person will spend an additional $6,250 out of pocket for health care.  That’s A THIRD OF THEIR ANNUAL INCOME ON HEALTHCARE.  I take it back, the young adults aren’t getting the short end of the stick.  It’s the older, single adults. 

 

 

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