Saturday, December 21, 2013

The ACA Will Help, Not “Frustrate,” the Middle Class | Jared Bernstein | On the Economy

More annoying ACA coverage from the Times.  Lets get this straight.  If you make $100,000/year $1,000/month for insurance is a lot.  But it is about what the ACA sets 9.5%.  And the ACA helps you - because you can buy a platinum policy with no deductible and a $8,000 max out of pocket per year.  Want the government to do more for you?  Fine.  Support single-payer.  Expand Medicare toage 50.  But don't bitch about the unfairness of the ACA. - gwc The ACA Will Help, Not “Frustrate,” the Middle Class | Jared Bernstein | On the Economy:
by Jared Bernstein
Look, I’m as ready as the next guy to call out the Obama administration for the shoddy rollout of the ACA.  I’m also confident that at the end of the day, as the exchanges become more accessible and as families with incomes below four times poverty get help paying for the coverage they buy there—coverage that for some will be of higher quality than what they had—the reforms will first become more popular, and later become an appreciated, and probably pretty dull, part of the fabric of life in America. One of the problems in getting from here to there is articles like this one in today’s NYT. No question there are people paying more for health care under the ACA, but the examples in here seem awfully cherry-picked to support the headline claim that the new law “Frustrates many in Middle Class.” –First, let’s talk middle-class. The median family income in the US right now is about $62,000. For families of four, like the one featured in the piece, it’s about $80,000. Income eligibility for the subsidies goes up to four times the poverty threshold, or about $94,000 for a family of four, meaning that a median-income family buying coverage on the exchange would be eligible for a subsidy. The family featured in the piece was chosen to be above the subsidy level—their income was $100,000. That’s certainly and fair point and I’m not denying they’re “middle-class.” But the piece should have mentioned the median, or more to the point, the fact that according to Census data, the ratio of income to the the poverty threshold for families in the middle fifth of the income scale is 3.5, again, below the subsidy cutoff of 4. –But what of this “cliff” business on which the piece focuses, i.e., that the family takes a huge hit by not being eligible for the subsidy? As noted, the subsidy cutoff for a family of four is about $94,000 and the family’s contribution is capped at 9.5% of their income, or about $9,000. The Chapman’s, the family featured in the piece, with income of $100,000, may now pay about $12,000 per year for coverage. The piece states: “If they made just a few thousand dollars less a year — below $94,200 — their costs would be cut in half, because a family like theirs could qualify for federal subsidies.” But $9K is not half of $12K, so at least as I read it, they’re exaggerating the cliff effect (h/t, PvDW). –What did they have before? The Chapman’s previous plan, for which they paid $665/month, was cancelled, and as noted, the cheapest plan they could find will cost $1,000. But what did their old plan cover compared to the new plan? My guess, based on the cost and quality of non-group coverage in states with not a lot of competition, is: not much. Any piece like this that compares premium costs before and after the ACA must dig into the quality of the plans, otherwise they’re comparing apples and oranges.
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