"So you've got this crazy system where all of a sudden 25 million more people have health care and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It's the craziest thing in the world,…"
Although former president Bill Clinton later tried to soften this harsh criticism of the “Affordable” Care Act, (ACA), it had to be a heart-felt spontaneous statement based on his demonstrated verbal spontaneity (coming or resulting from a natural impulse or tendency; without effort or premeditation; natural and unconstrained; unplanned).
There have been estimates the ACA will cost taxpayers more than one and a half trillion dollars a year. In reality it is hardly a health care plan, it is more of a catastrophic insurance plan because the out of pocket costs are so high. Let’s face it, insurance companies have to make a profit.
A calculation can show whether or not a ACA health care insurance plan is affordable. Calculate for a family of four in Waterville, Maine, two adults and two children, with both spouses working and both children in school. All four have average good health.
This Waterville, Maine family of four with a median annual income of $74,000 signs up for a silver plan with premiums of $586 and Medicare tax of $90, for a total of $676 per month.
Because their income is 316% of the Federal Poverty Level, they qualify for a tax credit of $291 that would reduce the monthly cost to $385 per month. That seems affordable.
But wait, that is just the premium and Medicare tax cost. How about the benefits? Their silver plan has a $13,700 out of pocket threshold, meaning all medical bills will have to be paid, out of pocket, including the monthly premiums and Medicare tax, before any of their health care bills are covered.
Their out of pocket cost is $1,142 per month, plus the premium of $385, for a maximum of $1,527.(anticipated, if no major health problems occur). There goes affordability. The penalty for not enrolling would cost them only $900 in additional annual income tax. So I know what I would do.
The question is would you buy a ACA insurance company policy for “catastrophic” insurance for a monthly cost of $1,527 per month or just pay $75 per month additional income tax and accept the risk of no catastrophe.