Critique by Jerry Policoff for Single Payer activists in Pa: One Payer States
(See Huffington Post article HERE:)
Few would argue that the Affordable Care Act has no good provisions, and that there are not some, perhaps many, who will benefit from it, but that is not universally true, and perhaps not even true for the majority of Americans who may gain insurance coverage but remain unable to afford actual health care. The down sides of the ACA are being virtually ignored by the Obama Administration, and the media has displayed an abysmal ignorance of the Act and an unwillingness to educate the public about it.
The article could have been written in a manner that explained some of the down-sides of the Affordable Care Act. Instead it leaves out pertinent details and leaves the likely false impression that the ACA is going to seriously lower the cost of healthcare for the typical American.
Example one in the article revolves around 56-year old Bonnie O’Brien who earns $62,000 per year and has health insurance through her employer who subsidizes the cost. The article suggests that Ms. O’Brien might be able to do better with a “silver” plan in the Exchanges that would cover her and her son for an “estimated” cost of $491 per month. The use of the word “estimate” is not explained, but all of the current costs being published for Exchanges depend upon how closely the actual participants who enroll in the Exchanges mirror demographic projections. For example failure to attract enough young enrollees could significantly and negatively impact the monthly premiums. The article explicitly states that Ms. O’Brien would qualify for a $48 per month tax credit if she switched to the Exchanges, but in fact, the ACA specifically denies subsidies to people who are currently enrolled in employer-provided health plans except in very limited circumstances that do not seem to apply to Ms. O’Brien. In other words, in the case of Ms. O’Brien, the author is understating her projected monthly premiums by $48 per month, raising them to $537 per month if she switched, not $491. This is just sloppy and misleading journalism.
The author does cite some doubts voiced by Ms. O’Brien: "I would have to have the variables, what this includes versus what I've got," she said. Those are wise misgivings expressed by Ms. O’Brien, but the author seems to marginalize them rather than examine them. Simply comparing premium costs to what one is currently paying for insurance is an apples to oranges comparison (as Trudy Lieberman has repeatedly emphasized in her media critiques in the Columbia Journalism Review). Just as important is what is covered and how do the deductibles and co-pays compare. Washington State Silver plans will typically carry a $3,000 deductible with a 30% co-pay once that number is reached. Thus Ms. O’Brien’s first $3,000 in medical expenses would be out-of-pocket in the Exchange as would be $30 out of every $100 billed thereafter until the out-of-pocket limit (which excludes insurance premiums) is reached. In her case that would appear to somewhere in the $16,000 per year range in out-of-pocket premiums and medical costs or nearly 30% of her net pre-tax income. Chances are that the $600 + Ms. O’Brien now pays for employer-provided health insurance carries lower deductibles and co-pays and offers better coverage (as is often the case with employer-provided health plans), and that switching to the Exchanges might be a bad decision for her, but you’d never know it from reading this article. Clearly the author is off-base in concluding that “it's Americans like O'Brian -- older but not yet senior citizens and eligible for Medicare -- who might stand to gain the most from the law.” It appears more likely that the reverse would be true for Ms. O’Brien even though her monthly premiums under an ACA Silver plan might be marginally lower than what she is paying now (and even that is not certain).
Applying this same situation if Ms. Obrien was currently uninsured, her annual premiums in the Exchange with a Silver plan would be $5,892 with potential additional out-of-pocket medical costs of about $12,000 for her and her son. Again, in most cases government subsidies and tax credits apply only to premiums, not medical bills (and medical cost deductions on Federal tax returns have been sharply reduced this year). Paying those medical bills on top of monthly premiums will be a major challenge for millions who enroll in them. Under the Bronze plans the coverage will be similar to the Silver with higher deductibles and co-pays (40% after the deductibles are met versus 30% in the Silver plans) and somewhat lower monthly premiums. The author of this piece fails to point any of this out. Being insured but lacking the resources to pay medical bills often results in avoiding going to the doctor or in failure to fill often costly prescriptions. This is called being “underinsured,” and it is not all that different from being uninsured except that the uninsured are not saddled with those monthly premiums.
Next the author presents the case of Tom Lloyd, an uninsured cabinet designer who stopped looking for insurance in 1998 when he was quoted $9,000 per year in premiums with a $5,000 deductible. He suffers from numerous pre-existing conditions. He can afford to pay his medical bills but worries that this may change if he gets seriously ill or suffers a major injury. He expects to earn $66,000 this year.
The author writes that Mr. Lloyd can purchase a silver plan in California for $599 per month (this time failing to mention that this is an estimate and that it is far from set in stone). The author writes that this is a “a little less than Lloyd spends out of pocket for health care each month now.” California provides Exchange cost limits that are more generous than most states (good for Mr. Lloyd, but not particularly helpful for those unfortunate enough to live in the other 49 states. Even here though, the author implies that Mr. Lloyd will pay less for coverage under the ACA than he now pays out-of-pocket for his medical bills. That seems unlikely because California Silver plans carry a $2,000 deductible plus $45 per doctor visit co-pay plus an additional $500 deductible for medications. Assuming he visits a doctor only once a month, and assuming faulty enrollment projections do not increase the cost of those monthly premiums, Mr. Lloyd is looking at an additional $3,000 per year in out-of-pocket costs. This would increase his total healthcare costs over and above the $599 premium (which is only slightly below his current medical-related cost) by more than $3,000, a 40% + increase in out-of-pocket cost a year to over $10,000 per year to more than 15% of his net pre-tax income. As mentioned earlier, his tax deduction for medical expenses is also going to decline effective this year resulting in a higher tax bill.
The author of this piece quotes Mr. Lloyd: "I'm chomping at the bit here for October to come through so I can start looking at these exchanges," he said. "This is a deal of a lifetime for me."
Is it really? The reality would seem to suggest that Mr. Lloyd’s medical expenses are going to rise substantially under Obamacare, but one would never know it from reading Mr. Young’s article in the Huffington Post.