There are plenty of philosophical reasons why some people oppose financial aid to buy private health insurance.
In fact, criticisms come both from the right and the left. And these are worth discussing.
But one approach is wrong: overlooking this aid.
Yet some critics of the Affordable Care Act simply ignore the financial aid
Take this letter-writter, whose letter was published in the Bangor Daily News.
I want to put the Affordable Care Act into perspective for Northern Maine. A single 50-year-old with a $32,000 annual income has a monthly premium of $735. After state and federal income taxes, sales tax, property taxes, use taxes, excise taxes, social security tax and Medicare tax, this individual is paying about 50 percent of their income in taxes. If an individual travels 23 miles one way to work, the vehicle depreciation, tires, insurance, gas and oil changes create a non-tax deductible expense of about 25 percent of their income. This individual is left with approximately $720 a month to live on.
The $735 monthly premium for health insurance under the Affordable Care Act is every single solitary penny that this individual has left to live on for the month.
Wilbur Clark, Presque Isle
I’ve bolded the elements of the letter that affect the cost of a premium: Age, income and location. I’ve also bolded the premium cost Mr. Clark claims an individual fitting this profile would pay.
Turns out, the figure of $735 is simply incorrect.
I went ahead and did it for a 50 year old making $32,000 a year who lives in Presque Isle.
Here’s a policy this man could buy – and it’s not even the cheapest.
The above plan costs $575/month less than what Mr. Clark claimed a premium would cost.
And the least expensive plan costs $141/month, $594 less than the figure in the letter.
Still, these are bronze level plans, so the cost and coverage is at the lower end.
So let’s skip the silver level and go straight for the gold, the coverage that covers the most and costs the most.
Here’s a gold level plan this man could buy. At about $383 a month, it costs $352 less than what Mr. Clark says a premium would cost.
Now, if you check thehealthsherpa.com yourself, you’ll find that this is not the most expensive policy.
So, what would the most expensive plan cost this man? $424.80.
Moreover, it looks like this is the plan Mr. Clark was thinking about since, without a subsidy, the cost would be 734.65, close to the $735 cost he claimed the man would have to pay.
But the cost would not be $735. It would be more like $425, $310 a month less. And that’s the most expensive option.
By the way, at this income level, no extra taxes would be paid. Under Obamacare, families making over $250,000 have to pay an additional .9% for their Medicare payroll tax, only on the amount over that threshold. For individuals, the .9% kicks in on income over $200,000.
As to the premium, the letter writer, a critic of Obamacare, simply left out the financial aid, the subsidy, that would be received by the 50 year old person living in Presque Isle and making $32,000.
Rather than paying $735/month, the hypothetical man would pay between $141 and $425. The letter writer’s figure is off by anywhere from $310 to $594 a month.
Unfortunately this sort of thing happens all too often.
Obamacare critics quote prices for health insurance premiums that are incorrect because they don’t include the financial aid.
Why do they do this?
Perhaps they don’t know. Perhaps they know and aren’t saying.
I could speculate about motives. But I don’t feel comfortable doing so.
However, when you read a letter or op-ed or article and someone mentions costs, don’t forget about the financial aid.
It makes a big difference, certainly to the 50 year old making $32,000 who lives in northern Maine – and plenty of others as well.
So make sure you check for yourself and for any friends or family members who don’t have health insurance.
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