When it comes to the Affordable Care Act, a lot of emphasis has been placed on enrolling the so-called "young invincibles," young people who tend to be healthy. The new Covered California insurance marketplace opens next Tuesday, and outreach workers across the state are spreading the news about new options and the coveted subsides, available from the federal government in the form of tax subsidies to make insurance more affordable.
But "more affordable" is relative. Kaiser Health News today tells the story of Michelle La Voie, a single mom making $38,000 a year and supporting two teenagers. She wants health insurance, but even with the subsidy she would likely get, she's still not sure she can afford it. From KHN:
La Voie ... would still have to pay $191 a month, or about 6 percent of her income toward the premium. She could also face as much as $2,000 in potential out-of-pocket costs for hospital care and prescription drugs, if she needs those things.
“What’s the point of having [a policy] if I can’t afford to use it?” asks the 47-year-old librarian in upstate Franklinville, New York, referring to the co-pays and deductibles that she might incur if she sought treatment.
La Voie would actually get some free care with her policy. Under the health law, some preventive care is free, such as cancer screenings. In addition, on a silver-tier plan in Covered California, many doctor visits are not subject to the deductible. Patients do have a co-pay, up to $45 for primary care or $65 for a specialist. Roughly 5.3 million people will be eligible to buy insurance on the Covered California marketplace, and half are expected to qualify for subsidies.
Under Obamacare, most people are required to have insurance or they will pay a penalty. In 2014, that penalty is $95 or 1 percent of household income, whichever is greater. How individuals and families will weigh affordability within their own budgets can only be revealed in the coming months, after people begin signing up -- or not.
In an article in the Columbia Journalism Review, veteran health journalist Trudy Lieberman cites a bulletin to clients from insurance consultant Robert Laszewski who, Lieberman says, suggests buying a policy "may not be such a good deal for many families." From Lieberman's report:
Using numbers from Covered California, California’s exchange, he shows that a family of four making $59,000, a bit more than the median income, could expect to pay $4,739 [$394/month] for a policy after subsidies are applied—about 10 percent of their take-home pay. That would buy the second lowest-priced silver plan with a $2,000 deductible and a cap of $12,700 on out-of-pocket expenses. He writes:
For so many individuals and families 10% of their take home income is a huge issue. This is the marginal income left at the end of the month, after taxes, rent, and car payments that is so critically important to them. The dirty little secret for Obamacare is that the subsidies aren’t enough to assure us that we will attract a good cross section of risk.
In metropolitan areas of California, where housing costs tend to be higher, an individual or family could easily be well over the median income and still struggle to pay for health insurance. In May, when Covered California rates were first announced, an attorney who was above the cut-off for a subsidy said he would still not be able to afford insurance for himself and his family through Covered California.
Health insurance isn't "cheap or easy," said Anthony Wright of Health Access, a California advocacy group. "These reforms make it cheaper or easier, but it doesn't address all the issues that everybody will have."
La Voie has put off seeking treatment for an intermittent gall bladder problem, Kaiser Health News reports. She's worried she'll end up in an emergency room with a huge bill to pay -- out of her own pocket. From KHN:
Nevertheless, she plans to take that chance because paying the fine for not having coverage is more affordable.
“For now, I’m going with the penalty,” she said. “I would love to have insurance but I also want to [be able to] pay for rent and groceries. ... It’s not like I take vacations, go out to eat, or buy lots of clothes ... My money goes to rent, gasoline, food, student loans and utility bills almost exclusively. Believe me, there's not much left over for extras. It's very depressing.”
"There is work we need to do on the state and federal level on affordability going forward," Wright said.