An article in Bloomberg examines the affordability of health care coverage as the Affordable Care Act (ACA) is implemented. While the ACA will help many uninsured Americans get coverage for the first time, the article warns that the new coverage may “come at a potentially unaffordable cost.”
AHIP has been focused on raising awareness of factors driving premium increases, including soaring medical costs and provisions in the ACA, such as the new health insurance tax, costly benefit requirements, and age rating restrictions, which will significantly add to the cost of coverage. To learn more, visit www.AHIP.org/affordability.
Here are some key highlights from the Bloomberg article:
- As the administration spells out the details, many uninsured will be surprised at how much they will have to pay. It may involve “very substantial amounts,” and “there still will be a significant number of people who can’t afford health coverage,” said Ron Pollack, head of Families USA, a consumer group that backs the law.
- “People are often surprised at how expensive health insurance is once they have to pay for their own,” said Karen Pollitz, a senior fellow at Kaiser Family Foundation. “The subsidies will make that better, but they won’t make the cost disappear.”
- “While we’re only dimly aware of it, we all pay,” said former Congressional Budget Office Director Robert Reischauer. “There shouldn’t be free-riders.”
- “What’s more, there are provisions in the law capping the financial burden the requirements will impose on the uninsured. If costs exceed 8 percent of their income, they are exempt from the individual mandate to buy insurance. And people can choose to pay a penalty instead of buying insurance. The fine would be $695, or 2.5 percent of a person’s income, whichever is greater.”
- “In 2019, some families could see their premiums climb four times as quickly as the help they receive from the government, according to CBO. That means they will have to bear a larger share of the burden of purchasing coverage.”
- “That will be a major challenge,” said John McDonough, a public-health professor at the Harvard School of Public Health. “It makes the affordability picture far worse.”
- “A November 2009 analysis by CBO of a draft of the program provides a rough indication of how quickly the subsidies will ramp down. It shows the government covering 77 percent of the premium costs for single persons earning about $20,600, 42 percent for those earning around $32,400 and 13 percent of the premium costs for those making about $44,200.
- That means many with modest incomes will be responsible for covering the bulk of their premium costs. About 5 million people required to buy coverage won’t receive any help from the government because they earn too much, CBO projects.”
- “There may not be sufficient management of expectations,” said Lynn Quincy, a health-policy analyst at Consumers Union, a Yonkers, New York-based advocacy group. Lawmakers should have been telling the public the law promises “lower-cost” — not “affordable” — coverage, she said. “Everybody interprets ‘affordable’ differently — it’s in the eye of the beholder.”