Jonathan Cohn - "The Huge Obamacare Story You Aren't Reading"

[TomCADem]

Nice story that talks about how the MSM either ignores or, worse attacks, the fact that millions of people stand to gain access to Medicaid under the ACA:

http://www.newrepublic.com/article/115542/obamacare-plan-cancellations-medicaid-expansion-and-media

But there is also a class element to the way this debate has evolved. By and large, the people receiving those cancellation notices and facing large premium increases are at least reasonably affluent. They’re not necessarily rich, particularly if they live in higher cost areas of the country. Many of them sweat monthly bills just like most of the country does. But, by definition, they don’t qualify for huge subsidies that would offset premium increases mostly or completely. By contrast, the people getting Medicaid are poor. They have to be, because it’s the only way to sign up for the program. And as political scientists have shown, the poor don't command the same kind of attention from politicians that the middle class—and particularly the upper middle class—does.

And this fact, I suspect, is also magnifying the impact of those cancellation letters. The best estimates suggest that 12 to 15 million people currently buy coverage on their own—i.e, in what's known as the non-group market. It appears that only a fraction of them will get to keep their current policies. The rest will end up having to get new coverage, or updated versions of their old coverage, that offers greater benefits and/or is available to everybody, regardless of pre-existing condition. That will drive up the price of insurance.

But when you take into account the subsidies, which for many people will knock the price of insurance right back down, and the number of people who would gladly pay more for insurance that offers real protection from financial shock, the number of people who truly end up feeling worse off ends up a lot smaller than 12 or 15 million. And even those people will end up with good health insurance, though they’ll be paying more for it and may not want it.

Meanwhile, the best available projections suggest that 13 million people will eventually sign up for Medicaid. That’s a much larger number of people, most of whom had no insurance—none—before. That doesn’t even include more than ten million presently uninsured people expected to get insurance through employers and the new marketplaces, assuming all of the websites start working better, or the millions of seniors getting extra help with their prescrpition drugs.

[MrsKirkley]

1. Many poor people don't qualify for subsidies either.

Workers and their families who are offered health insurance through an employer, even if that health insurance has a high deductible and annual out of pocket maximum, are ineligible for subsidies no matter how low their income is. Employer provided health insurance is considered affordable if the employee's portion of the premium is 9.5% or less of the household's income. Premiums for the rest of the family aren't included in the 9.5% affordability test, but if the employee only portion of the premium meets the affordability test, all of the worker's family members are ineligible for subsidies.

Here's an example:

A retail worker makes $22,500/yr. His diabetic wife has spinal issues and can't stand all day like the available jobs in their area require, so she isn't working. The retail job offers health insurance to both workers and their families, including spouses. If subsidy eligibility was based on income alone, the wife would be able to get a policy on the exchange for less than $60/month with a 94% actuarial value, meaning she only had to pay for 6% of everything (including deductibles, co-pays, and all medical care). But because her husband's low paying retail job offers health insurance to spouses, she is not eligible for subsidies despite their low household income. She is forced to accept health insurance through her husband work with a $5,000 deductible and $10,000 annual out of pocket max. How can a couple with a $22,500/yr gross income afford to pay for the first $5,000 of medical care before the insurance pays anything? This couple will be required to pay for health insurance they can't afford to use. How many low income workers out there are in this situation? Restaurants, hotels, grocery stores, department stores, nursing homes, gas stations/convenience stores all pay low wages. The largest employer in the United States is a department store.

[TomCADem]

2. The Flipside Is The Fear That Employers Would Simply...

...discontinue health insurance coverage and force people into exchanges. So, you have the law grandfathering in existing healthcare plans offered through employers. Of course, over time, you would think that employers who offer crappy insurance that is materially worse than even what employees can get through an exchange would lose employees, since under your example, if the retail worker gets a job at the minimum wage of $10.00/hour, they can then set themselves up to get subsidies, thus actually increasing their real income.

[Bandit]

3. The arguments I am hearing about AFC are almost exactly the same arguments Democrats

made back in the mid nineties when Republicans first rolled out this almost identical plan...We screwed up by enacting a Republican Plan. It was destined to be, if not a total failure , at least a miserable experience.