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IRS Anticipates Cheapest ObamaCare Family Plan Will be $20,000 in 2016

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Aiee! CNS News found this tidbit (hat tip furzy mouse), contained in IRS final regulations published on January 31. Now admittedly these are examples for the purposes of illustrating how to make various calculations under the new regulations, but the assumptions are pretty clear. The cheapest type of plan in ObamaCare is a bronze plan, and bronze family plans for 4 and 5 person families are assumed to cost $20,000 in 2016.

First see this section on p. 53:

Now we see how affordable coverage thresholds relate to income in these examples, and notice the plan cost assumptions:

Now before you freak out and worry that that is what you will actually have to pay, there are various types of credits for people who are deemed by formula to “lack affordable coverage”. This is above my pay grade. But I’m pretty stunned at the premiums the IRS is assuming will be generally applicable. One of the benefits claimed for Obamacare was that it would help lower premiums by bringing healthy people who heretofore had gone un or underinsured into the risk pool. It looks like the insurers plan to more than offset that by the premiums they are charging for the higher risk groups they had heretofore managed to exclude. Or at least that will be their excuse.

Some of the backers of the ACA are finding it to be less of a deal than they had anticipated. From the Wall Street Journal (hat tip Tyler Cowen):

Labor unions enthusiastically backed the Obama administration’s health-care overhaul when it was up for debate. Now that the law is rolling out, some are turning sour.

Union leaders say many of the law’s requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents’ plans until they turn 26.

To offset that, the nation’s largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance.

I expect the gnashing of teeth over the ACA to get louder as it is rolled out. We said at the time, and we’ll say it again: this plan is a gimmie to Big Pharma and the health insurers. It makes the underlying problem of the American health care industry, that of excessive costs, only worse. The predictable outcome will be costly insurance that does not cover much. Expect it to be OK on routine care, restrictive on preventative care (that may not be entirely bad given how much doctors overtest) and stingy on big ticket items.

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143 comments

  1. Mark P.

    On the figures, the U.S. health insurance system looked set to break around 2020 from rising costs and growing numbers of uninsured. I had high hopes that it would break and we’d get something sane.

    Now, via the individual mandate to purchase health insurance built into Obamacare and its various other Frankenstein-type patches, the monster looks set to rampage on and continue looting with impunity for another decade or two at least.

    Thank you, O Mighty Obama.

    1. Jim Haygood

      ObamaCare never addressed U.S. health care costs, which are FAR higher than other countries.

      Indeed, it empowered all the uncompetitive fatcat cartels — from physicians, to insurers, to Big Pharma — to lock in their privileged status.

      Naturally, those without employer-subsidized deals (which are gonna evaporate like defined-benefit pensions have done) will pay eye-popping rack rates for individual coverage with lavish new mandates and higher loss ratios.

      Remember when seniors revolted over the Medicare Catastrophic Coverage Act of 1988, forcing a rare Congressional repeal?

      The trainwreck of Obamacare awaits the same fate in 2014, as lame duck Barry increasingly is seen on TV with the sound turned off, his lips flapping uselessly.

    2. Nathanael

      Don’t be disappointed — the system will break anyway.

      Going rate for individual insurance in NY is around $15,480/year.

      The mandate only applies to people if the cost of insurance is less than 9.5% of annual income.

      Therefore it only applies to individuals with incomes over $162,947 / year.

      In other words, the mandate doesn’t apply to anyone, at least in New York.

      System will still collapse.

      1. Nathanael

        Oh, I see the number is 8%…
        ..that means the mandate only applies to individuals with incomes of $193,500.

        Still not applying to much of anyone in upstate NY.

        1. Nathanael

          Now, the thing I *do* want to find out: if Obamacare did something extra specially evil like eviscerating the NY State insurance coverage requirements, then of course they could start offering plans which cost just under 8% of annual income but provide no medical care.

          I don’t think they eviscerated state medical regulations, but I’ll never put anything past the thugs in the administration.

  2. Expat

    What’s so surprising? Obamacare was a massive handout to big Pharma and big Medicine. The right opposes Obamacare on principle because they are too stupid, lazy, and ignorant to actually examine it. The left supports Obamacare for the same reason.

    In reality, it is simply another brick in the wall of ongoing American fascism (no, not that kind…simply the alliance of industry/finance/military with the government). The “universal” part of the package is hardly that. The coverage is mediocre. The costs are very high. But the profits are guaranteed to roll in.

    America purports to be the greatest nation on Earth when its treasured values amount to blowing the shit out of everyone, including ourselves, and letting much our population die an ignorant, uneducated death from largely preventable causes while the wealthy snort cocaine and burn hundred dollar bills for fun.

    1. Yves Smith Post author

      I’m not surprised (well except that I am in the weird position of having a cheap plan, save I have to engage in regular pitched battles with Cigna to get them to honor the policy, so I’m also a bit out of touch with “normal” health insurance costs).

      I avoided saying much about the ACA when negotiations were on save that it was clearly a gimmie to medical-indusrial complex incumbents and would make America’s health care costs problem worse. This is playing out exactly as I expected.

      The only thing I have found surprising is how many Good Dems continue to cheer Obama in the face of overwhelming evidence that he favors corporate interest over his supposed base. The “aiee!” is more that the IRS is being pretty upfront about what is in store.

      1. LucyLulu

        The pitched battles are the norm now. The difference with you is that you are fighting them yourself instead of somebody who works for your healthcare provider. Ask anybody who works in billing for a physician if reimbursement hasn’t become a nightmare. Different rules for different companies and different policies within the same company. And if it isn’t in writing, it will later be denied. Hell, it will be denied anyways.

      2. Dave

        Spot on. The right vehemently opposed this piece of garbage legislation because it was “socialism”. The left blindly supported this legislation because their “cult of personality” leader put his name behind it. Meanwhile, the insurance and pharmacy lobbyists were passing out large sums of money to our “elected representatives” to pass the bill they wrote…..

        The ignorance is breathtaking

        1. Tim

          That’s not exactly true. The republicans played their part by making sure any cost checks and balances were removed such as the government insurance option. We got the worst of both worlds.

          This law built the slaughterhouse and heards the cattle in all in one fell swoop.

          1. Daikon

            According to the NYT, it was Obama himself who assured insurance CEOs in secret talks in the summer of 2009 that there would be no public option. Obama consistently and actively opposed the public option behind the scenes, especially during Jan. and Feb. 2010, while paying lip service to it in public.

          2. sd

            Obama was adamantly and vocally opposed in the 2008 election campaign to even considering a public option. That was the significant detail between Hilary Clinton and Barack Obama.

        2. Richard Kline

          Wrong as usual when speaking in binary, Dave. The _actual_ left OPPOSED Obama’s sellout and was adamantly behind single-payer. It was the liberal center who liked ‘an incremental approach’ who got behind Obama’s con. The ‘just cover them all then figure it out’ types. The ‘it’s better than the Republicans are offering’ joes. The ‘I’ve got to deliver something to my base’ set. But the Left: no, the left opposed this monstrosity.

          Fox’s faux left-right absolutism in a world of gradations which matter is just stupidity, which makes mindless those who repeat it.

      3. Veri

        Consider the genesis of Obama’s Affordable Care Act: The Heritage Foundation, a cesspool of neo-conservative ideology. If there is one thing we know about Republicans and neo-conservative ideology is, that corporatism is their favored approach to problems.

        Government? War? Health care? Corporatism. The free market is cheaper and does it better, despite evidence to the contrary. Higher prices result when the public’s needs are handed over to corporations.

        Now, Conservatives will utter the phrase, ‘Life, Liberty and the Pursuit of Happiness’ while wailing against health care. However, what is ‘Life, Liberty, and the Pursuit of Happiness’ without good health?

        Obama and the Democrats handed a gift that will keep on giving, to the same failed system. That gift is considered one of the last bastions of wealth in America besides Social Security: taxpayer monies.

    2. Richard Kline

      The first goal of Obamacare was to block single payer, thereby keeeping for-profit rent extractors of Big ‘Health [sic]‘ in business. The second goal was to pack in massive profits for Big Pharma and for-profit health corporations. The third goal was, in forcing all to buy, to require a permanent payment stream from healthy people at exortitant premia; not to pay for the care of the indigent—that’s billed back to the states—but for a profit rake off by the ‘insurance [sic]‘ industry for the privilege of ‘managing’ said cash flows, i.e. stealing from all. Missions accomplished.

      The health care fraud was the largest Trojan Horse of our times. At least we knew all along that the TARP and it’s successors was an outright gift of public money to the rich; a heist of plutocratic scale scarcely believable but conducted in plain view. Bamacares [sic] was supposed to provide a public ‘service,’ and in a way it has: we are all servants now, of the health rentier system.

      1. Richard Kline

        And I will add, at $20K a year, most families can’t afford the premium, let alone the additional costs they’ll be build int he event they actually neeed, y’know, _care_. Or put another way, that family can forget about taking out a mortgage because their income stream is already on lien to the health care system, not to mention the student endebt[ing] system. We are all just grist for the Robber Corps, who fight each other in the political-management system for the right to entail our individual income streams. It’s peonage in the form of debt-rent subjugation, and the beauty of it is that the Robber Corps have no personal obligation back to the individual: they can cut us off most any time, or failing that bill the government for our ‘nonpayment’ to THEM.

        And still the American sheep go “Baaa!” We don’t even need Jesus to keep us opiated here, just gee-whiz gadgets and poppin’ Powerballs.

      2. Richard Kline

        And since most will have forgotten (as painful memories numb ones attentional focus) the most substantive promises of Bama’s Hope to Care Campaign of 08 were: a) single-payer health care, and b) student loan reform. Yes, that’s Barack Obama: a stone liar and turncoat. He fixed all the public dupes who voted for him _really good_. That’s who he was coming in the door and who he’ll be going out the door.

          1. rotter

            when running, and before the obama care debacle unfolded, obama PROMISED, he would not support the madate. this is recorded on video.

          2. Brooklin Bridge

            …all he promised was the mandate

            Incorrect. Obama promised (in campaign speeches – on national TV) NOT to have a mandate except for children’s healthcare insurance AND on his web site he promised a robust public option that would protect the public -a non mandated public- from price gouging.

            He also, on national TV, used the example that if mandates worked, we could simply mandate that all poor people purchase houses to solve the housing disparity.

            Hillary Clinton campaigned on the mandate, not Vichy-Oscum.

          3. mike

            Obama very specifically promised to work for single-payer health care. “I happen to be a proponent of single-payer universal health care plan” His only caveat was that the Democrats take the White House and both houses of Congress, which happened. If you have any doubt here’s the YouTube:

            http://www.youtube.com/watch?v=fpAyan1fXCE

        1. taunger

          Jebus, and he did do a lot on student loans, too. I mean, the guy is a ridiculous megalomaniac, you would think you could take the time and pick issues he actually botched?

          1. Nathanael

            Obama did a very small amount on student loans. Now, new graduates are debt slaves to the government instead of to private companies!

            They still can’t get rid of the debts in bankruptcy, ever, so they’re still debt slaves. Not really a big improvement.

        2. JTFaraday

          Originally, and at a point in time when I think we can still say some of Obama’s opinions were his own and not those of his future bosses, so-called “universal healthcare” was never Obama’s issue, but Edwards’ and Hillary’s.

          At that time Obama was not in favor of the Romneycare/ Hillarycare mandate to purchase insurance, which he called “house insurance,” based on the notion that the people who need “to carry insurance” (as they used to say) are people who actually have assets to protect. For everyone else, it’s just another bill they can’t afford to pay.

          Obama got that much right, and while it hits none of the “public welfare” notes liberals like to hear it wasn’t an outright lie about the nature of the mandate either.

          But, Obama got the job, so.

      3. Veri

        It was not even a Trojan horse as ACA was already known to be a Heritage Foundation plan backed by Republican fraud. What the Democrats knowingly did was pass a corporate welfare bill.

        KNOWINGLY.

        Now, why did they do that?

        Some will argue that when people find out how bad ACA actually is, they will overwhelmingly demand single-payer. No.

        The bought politicians in Washington, District of Corruption, knowingly passed a corporate wealth care plan.

        KNOWINGLY.

        Every excuse offered by the idiocracy that comprises the American voting public is self-deception on the idiocracy’s part – something the politicians and plutocrats routinely rely upon and that the idiocracy routinely delivers. For instance, President Obama is not a weak leader who routinely gets rolled over by Republicans… No, his record is clear. He is achieving his desired results. He both can not be stupid and brilliant at the same time.

        1. nonclassical

          WHY would “they” do that???..obviously you missed the part where bushitters
          $ub$idized the profit$ of pharmaceuticals with Medicare drug “benefit”…FOR campaign contributions…

          bushbama has pulled the same charade…cut deal with insurance co’s long before phony “debate” on…

          corporatocracy…

        2. Nathanael

          “Some will argue that when people find out how bad ACA actually is, they will overwhelmingly demand single-payer.”

          Oh, they will. It’ll just take quite a long time. Really, people have to notice that Mexico has single-payer and that Mexicans get better health care than Americans.

          THAT’S when they’ll demand single-payer.

          1. Daikon

            In the US that virtually means Medicare for All, though there are other forms of single payer. That’s the main reason Obama hopes to shrink Medicare if he can think of a tricky way to do it with an end run around public opinion. Probably Lew has a fat playbook full of trick plays already.

            It’s interesting that Obama’s most trusted advisors are his SoTs. It shows exactly where his priorities are.

      1. Pelham

        Actually, it’s about $890, which comes to just under $11,000 a year. But Switzerland is one of the more costly countries in Europe for health care.

      2. Daikon

        That’s because Switzerland is not a social democracy and relies on (regulated) private non-profit enterprise. That is, Switzerland rejected single payer with a substitute that’s somewhat better than the mostly for-profit health insurance system in the US. Switzerland is not a good model for the US. Japan and Germany are better. Both have relatively comparable economies and have optional national health insurance, and in Japan most people choose to join.

    1. thurbs

      The Swiss plan also requires that base coverage be non-profit and available to all (that’s right ALL), and if i’m following it correctly includes more then the ACA bronze plan. There is stringent oversight and premiums must go through a two part approval process to be raised. So even though ACA is based on the Swiss system, they carefully stripped the two major consumer protections from the American system. Strict regulation and oversight AND base coverage designed to be about providing a certain amount of care for everyone.

      1. bmeisen

        Univeral mandate is the key to controlling costs. European social democracies like Switzerland aren’t limp-wristed do-gooders. We control cost spiralling through a truly beneficial economy of scale – everyone is in! And no cherry picking. It’s ironic that the US indulges Walmart and the Big Box model, an economic and social WMD, but rejects an economy of scale that fosters sustainable growth.

        1. Gerry

          In Switzerland not only are the mandated health companies non-profit, they also can’t by law advertise. Nor can prescription drugs be advertised.

        2. Beppo

          It is funny, the United States has had factory socialism for a solid 120 years. But the great benefits of socialism allowed the bosses dupe and bully everyone into acting against their own interest time and time again.

  3. ArkansasAngie

    By golly … I know porn when I see it! The emperor not only doesn’t have any clothes on he is involved in indecent acts of gang rapes.

    Bush? Obama? The fallacy of the false dilemma.

  4. thurbs

    And just for the record: I tell you now that paying for your own bronze level plan will be the norm within a decade of the full roll out of ACA. Because between the greed of the insurance companies and the corporate lobbying, the fines will be much cheaper then providing insurance quite rapidly. It may be longer but hell I expect employer provided Family coverage will pretty much disappear within five.

    Hope you work for a company who decides to throw you a bone and raise wages by the amount they current pay for insurance when they do, but I wouldn’t count on that either. What I would count on is level for eligibility of government subsidy to be raised so that fewer qualify for that either.

    This boondoggle is going to bite us in the ass very, very quickly.

    1. Nathanael

      “I expect employer provided Family coverage will pretty much disappear within five.”

      This would actually be a good thing. The “employer tie” to health insurance is the main thing which prevented employers from lobbying for a National Health Service system. Employers as a whole are a bigger lobby than insurance companies, hospitals, and doctors combined.

  5. taunger

    Its a feature not a bug. The cost of the bronze plan determines affordability. By making the bronze plan more expensive, it actually makes it less likely that a taxpayer will have a penalty. Penalties are imposed if taxpayer can obtain affordable covereage but doesn’t.

    For an individual eligible to purchase coverage under an eligible employer-sponsored plan because the individual is related to an employee, the determination of whether the ndividual’s coverage is affordable is made by reference to the employee’s required contribution. For all individuals who are ineligible to purchase coverage under an eligible employer-sponsored plan, the required contribution is the annual premium for lowest cost bronze plan available on the Exchange where the individual lives reduced by the credit allowable under section 36B for the taxable year (determined as if
    the individual enrolled in a plan through such Exchange for the entire taxable year).

    I’m not apologizing for the policy and political mess that is the Obama administration or its corporate welfare system. But as a low-income family head, and a lawyer, you learn to parse the practical effects of ridiculous government assumptions on regular basis. This particular regulatory feature doesn’t look evil to me, just stupid.

    1. Veri

      And if the individual is eligible for subsidies from the government, the health care corporation still gets paid.

      ACA is a win-win for failed corporate-run health care system. They cannot lose.

  6. bmeisen

    20% of your family’s “household” income for health care – and that’s before Obamacare kicks in. It isn’t the monthly premium – the real dinger here is the cost of health care as a % of American “household” income. The family of 4 has a household income of 90k and has health care costs of about 25k, if I read the law exerpt correctly. We pay about 14% for our coverage here in Germany, including medical, dental, some chiro, most eye, some mental, and compensation equivalent to 80% of income for convalescence.

    1. John F. Opie

      Ummmm…I’m insured with Barmer Ersatkasse (BEK) and have rather different coverage. It’s the standard public coverage, but I am a “Freiwilligvesicherte”, i.e. I pay the maximum fees for the system, which work out to around €750/m for me and the same for my employer. Family is covered, but the wife also pays insurance (ca €125/month) premiums for the same level of coverage, hence our bill runs around €875/m: we subsidize, effectively, the grandmothers who only pay €50/m for the same coverage.

      While visits to the opthamologist are covered, glasses are expressly not covered whatsoever. Dental is covered if and only if you’ve been a good boy/gal and have been going to checkups every year for the last five years: if not, you have a reduced level of coverage (a synthetic resin filling costs you then around €150, a ceramic filling €400). Mental is covered on a case-to-case basis, but is limited in any case to no more than 18 months therapy (this is to make long-term therapy a consumer choice: besides, if you are serious about resolving psychological problems, you should be able to do it within that time frame).

      Now, when I had my gall bladder out a few years ago, I was offered the choice of a single room or what the insurance paid. The single room would have cost me €1800 for five nights, and I opted out of that. I was in a five-bed room with 4 other people scheduled for gall bladder operations: in two days before (for required blood tests and pre-op procedures) and three days after to ensure that there were no complications. Was home then for two further weeks and was back at work after three weeks.

      If you’re sick and have gone to the doctor and he agrees you need to be home, then you have no income loss for a maximum of six weeks, after which a reduced level of income kicks in. I’ve been home as long as 4 weeks (with a badly twisted knee with a stressed ligament that couldn’t have weight put on it for over 2 weeks).

      Non-traditional procedures and theapies are largely at the choice of the patient and are no recognized therapies by the public insurance companies. Prescriptions are largely insurer-paid, with some modest co-payments (I’ve never paid more than €10 as a co-payment).

      The system supports preventive care according to age, and will provide partial subsidies for learning how to prevent chronic illnesses, such as learning how to do back exercises properly and the like if you have back problems and your doctor recommends them.

      It works in Germany because you have a relatively comprehensive understanding that it is not an entitlement as such, but rather covers costs. Costs are held down because the industry is effectively a monopsom and dictates pharmaceutical prices via a board made of up pharmacy companies, doctors and insurance companies: there is a triple antagonism going on, with pharma companies wanting high prices, doctors wanting the best treatments and insurance companies the minimum costs with adequate treatments. German tort law is very limited, so liability insurance is a non-issue. Most doctors run their practice as a private business and there is significant competition. There is no advertising for doctors, pharmaceuticals or insurance companies.

      There are private insurance companies, but their business model has largely failed and they are dying out.

      While fairly expensive for us, the deal is basically that higher wage earners pay higher premiums up to a cap to subsidize the rest. The public-mandate insurance companies are privately owned but are regulated to ensure competition, with a hierarchy of companies with differing entry requirements and fee structures. It’s a complex structure and few companies really make a profit: the government subsidizes the difference.

      Odd to think that the Germans have more faith in the market than what Congress has inflicted on the US.

      1. bmeisen

        Thanks for the details. Sounds like we pretty much agree. Recall however that the monthly premium isn’t the measure – it’s percentage of income. For non-profits, “gesetzlich” insurers, the upper bound is I believe set by the state, currently at about 15%. And rich Germans who stay gesetzlich are getting a great deal because of the Beitrags-bemessungsgrenze – relevant income levels for setting the premium can’t exceed a relatively humble amount, currently comething like €5000/mo.
        I am gesetzlich and don’t have to pay anything for dental checkups, nothing for amalgam fillings, my last ceramic cost €40 extra. My son just got prescription glasses and the insurer paid 60%. I have never “paid” for a doctor visit, they even just repealed the €10 quarterly office fee, had my appendix out for “free”, got 10 chiro treatments, get some help on prescriptions. The real wonder is that when I applied for coverage as part of being hired for a job, the insurer accepted me blind – all I gave them was my name, address and birthdat. That is how health insurance should work – the more people paying in the better, and so everyone must get in.

        As I understand it Swizterland has a better, truly public system. The German hybrid system of heavily regulated non-profits and cherry-picking for-profits mixing it up with powerful pharmacists, drug manufacturers, doctor unions, hospital operators is flawed. But no way do I ever want to go back to the extracting corporates/let them go to emergency way of death.

      2. nonclassical

        …wife is nurse in Germany…german healthCARE costs 20% U.S. healthPROFIT to cover ALL..for variety of reasons…FREE university for doctors, who OWE back to state, in state hospitals, years of study…

        both public and private heathCARE is offered…with NO legal suit-goal was to ALWAYS make citizen as fully healthy as possible…if problems exist, doctors are taken before board of peer…

        if “gamers” are caught working the system, they are thrown out of system for number of years..

        nurses earn more than beginning doctors..

        pharmaceuticals don’t run medication system of dispersal..

        perhaps most importantly, (besides FREE education), campaigns are PUBLICLY funded..

    1. ambrit

      Dear harry;
      Who’s afraid of drones when the Medical Industrial Complex can foreclose on one of your ‘vital organs’ for nonpayment of premiums? The enforcement provision is going to be a b—-!

  7. Tzimiskes

    I don’t really find this that surprising. Average employer family health plans average over $15,000 a year today and that’s with group rating, which will usually be better than community rating on cost.

    While individual coverag is much less today, most individual health care plans offer coverage that is below that of the bronze plan; in many cases people are paying for plans with such high deductibles that if they ever had to use the plan between the cost and lost work they’d be bankrupt anyway. Obamacare introduces both premium subsidies and out of pocket maximums meaning that even the bronze plan will provide better coverage than most individual market plans today.

    This isn’t to argue that the ACA isn’t deeply flawed, but the cost increases are largely from bringing individual coverage up to par with employer coverage, so it’s not surprising that costs are roughly similar (and I think the projected cost increases might be somewhat pessimistic, health cost inflation at this rate won’t take long to exceed 100% of GDP, which is obviously an absurd result). The system is still broken, but far more of the costs will be at the government level rather than at the individual so there’s at least the possibility of distributing costs more equally through the tax system. Your mileage may vary on how far this takes us towards a better system, and many problems remain, but the cost isn’t really surprising when compared to what employer health insurance costs.

    1. Capo Regime

      Really? Lots of employers proving coverage? Where does that 15k figure come from? Gee its not so bad is the best you can do? 20k for a family when the average family income is 50 k is not a problem huh? Gee its all o.k. So the bronze plan for everbody and the subsidies to get everyone to kick in for said bronze plan will come from the magic money stash which paid for TARP and so forth. Yep sounds like a plan that will work.

      1. Tzimiskes

        $15K figure can be found easily by googling, it, for instance http://www.kff.org/insurance/snapshot/chcm112012oth.cfm, which shows average employer funded health insurance costs $15,745 per year in 2012. The ACA subsides results in a broadly similar cost share to what we see with employer plans today, though in a less regressive fashion than with most employers since subsidies decline until being phased out somewhere in the top quintile (4X federal poverty level, or over $88,000 per year, well above the roughly $50,000 per year which is US median income).

        Never said that everything is all OK, but making everything all OK is well outside of what the ACA was ever intended to do. All the ACA really achieves is bringing the individual market roughly up to par with what is available to those working for large employers. Would I prefer to fix the US healthcare system as a whole, sure. But I think it’s an improvement to provide everyone with expensive, crummy care than only providing those lucky enough to have large employers with crummy care while everyone else gets next to nothing. And the maximum out of pocket reforms are going to be a big deal.

        Of course, there’s little done to promote cost control, capping insurer’s profitability as a percentage of total revenue doesn’t do much to provide incentives to cut costs. But I think it’s really hard to make an argument this is worse than the status quo once you dig a bit into the details of the subsidies, out of pocket maximums, and other provisions.

        1. lambert strether

          Forcing downwardly mobile middle and working class families to buy junk insurance isn’t worse? Why, exactly? Remember, most medical bankrupties happen to people who were already insured.

          Please don’t confuse paying health insurance premiums with actually getting health care.

          1. Tzimiskes

            Between the subsidies, minimum coverage, and out of pocket maximums (people always seem to forget this provision, probably because it isn’t reported very widely) this won’t be junk insurance for low income people. It’s not as good of coverage as people expect in other countries, but it will provide low income individuals with preventive care and keep health expenses from forcing them into bankruptcy in most cases. Probably won’t stop people from being trapped in poverty as a result of recurrent medical expenses, but it will prevent them from being stripped of absolutely everything from medical bills.

            Should we ask for better, definitely. But this isn’t nothing.

          2. Tzimiskes

            I do need to add, that with out of pocket maximums actuarial value will be much higher for the plans than the official 60/40 headline value for the bronze plan. These maximums taper off rather more quickly than the subsidies do (and while I’ve looked at the numbers before I couldn’t find them with a quick search, sorry); but they will help the working class. Again, it’s not enough but at the margins it should prevent some bankruptcies.

          3. Yves Smith Post author

            Tzimiskes,

            You are choosing to ignore (or obfuscate) the point Lambert is making.

            What people are paying for is $20,000 for routine and some preventive care, stress SOME. For instance, when I went to a new gynocologist, she tested me for all STDs. I’d never been tested, save for HIV (I’ve insisted on getting tested for that intermittently for a while). My reading of the ACA preventive care stuff for women is that would have been disallowed. Testing for STDs is covered only if you are “high risk”. WTF is “high risk”? ??? A sex worker???

            $20,000 for routine care and some preventive ONLY is a complete ripoff. A family could pay that themselves, out of pocket, even if they have some chronic but not life threatening health issues (asthma, kids have acne, etc) and have $ left over.

            That $20,000 includes the part of the premium that goes towards catastrophic care. But Lambert’s bankruptcy point is that insurers are great at denying or providing only partial coverage when people really need it, when Bad Shit happens. So people are getting ripped off. That’s a feature, not a bug.

            If Obama had wanted an easy fix to health care, a simple one would have been to mandate that insurers provide catastrophic only policies. Period. People would wake up and start paying for their routine care themselves, and just buy catastrophic coverage. That would make doctors more productive and happier, since they’d be spending less time and money fighting with insurers. Over time, it would have reduced the role and power of insures, AND would have put more of a spotlight on how they rip people off on catastrophic care (ie, the abuses over time would start to be contained). This would have been a very effective move and hard for insurers to bar legitimately.

          4. Lambert Strether

            @Tzimiskes “Between the subsidies, minimum coverage, and out of pocket maximums (people always seem to forget this provision, probably because it isn’t reported very widely) this won’t be junk insurance…”

            Yves makes my point above; I’ll add that what you describe is a maze of options that most people, especially working class and poor people, are going to find extremely difficult to navigate. The insurance companies will also take every opportunity to build traps into the process, since they profit by denying care to the sick.

            That’s before we get to the fact that the Obama’s health markets are going to be online, and so we envision a few million working class and poor people making key life decisions at library terminals. Middle class people should have an easier time of it, assuming the health market sites are well-designed*, but even so — too lazy to find the link — people who’ve tried to cut through the maze of options find out it takes hours and hours and hours, and they have no confidence in the end result.

            The whole process is a boondoggle of mindblowing proportions, especially given that proven solutions are available internationally, with a workable single payer system that “flattened the cost curve” while producing better health outcomes on the very same continent, just to the north of us. Given that proven solutions exist, yet are “off the table,” ObamaCare amounts to a gigantic medical experiment on the health of the American people (well, not the rich ones) without their informed consent. That means that no ethical medical professional can participate in it, so watch out.

            NOTE * Notice how one of Obama’s key factions, the “creative class” of programmers and web designers gets a lot of work out of this. It’s Web 2.0 pork, pure and simple.

  8. JTFaraday

    Considering they expect people to have purchased their health care financing plan within a year…

    and considering that you need a PhD in public policy just to understand the rules and what you do and don’t qualify for, and considering that I think most of the country has no idea what the Obamacare hubub is even about…

    when exactly are they planning on informing people that they need, by law to purchase this health care financing plan in the first place? Are they going to knock on doors with the Publisher’s Clearing House crew or something?

    I just don’t see this happening. This is like trying to load up everyone in the country with their very own mortgage.

    It will be interesting to see what the compliance rate is.

    1. Pelham

      Excellent points. Especially about public ignorance of this monstrosity, though you can’t blame people for being unable to make sense of it all.

  9. ftm

    I think I read where the penalty starts at $90 per person and goes up to $600 in 2016. Far cheaper to pay the penalty and just sign up for health insurance when you need it.

    Very interesting to see what hurdles they will place to stop last minute enrollments.

    1. Lambert Strether

      You’re assuming the Emergency Rooms won’t start denying care to people who decided they didn’t want to be forced to purchase a defective product (health insurance).

      So the “going naked” strategy might not work for much longer.

      1. Nathanael

        The Emergency Rooms won’t deny care. They get nailed by the press when they do that. Also, that’s prohibited by state law as well as by federal law.

  10. ambrit

    Friends;
    So, what’s going to be the ‘penalty’ for not opting into this mess? A lot of people I know here deep in the “Heart of Dixie” will find the expense so onerous that they’ll ‘play dumb’ and ignore the mandate altogether. If the figure of 600 USD for a ‘penalty’ I’ve read is true, most people here will grumble and consider that a bargain compared to the alternative, (mac and cheese every other day let’s say.) This system and its’ implementation can be considered an analogue to the US policies in its’ ‘protected’ zones around the world: Afghanistan, Iraq, the former Syria etc. A domestic form of Shock and Awe. Well, we all know how that plot is turning out. Expect something similar, but in a less violent, more passive agressive way, to happen here.
    Also, just where in the US do single people earn 60K? A family of four 90K? Down here, those figures are considered ‘The Big Time.’ Whoever at the IRS did these examples is in the running for the “Most Out of Touch” award. Premiums of 20,000 USD per year per family of four? I personally know two earner families of four that earn maybe 32K to 36K per year now. Marx was right, Capitalism is in the process of destroying itself. Where he might have gone wrong is in what system will replace it.

    1. JTFaraday

      Exactly. Most of the people this law targets–and targets is the right word–are “not tryin’ to hear that.”

    2. Hypothetical_Taxpayer

      I haven’t checked the stats in a while, but I think the national median family income is still only a tad above $50k. Also the $90k the IRS uses still puts this fambly in the top quintile, I think.

      If I speedread the IRS rule right, they seem to imply that the $20k Bronze Medal Plan may not be totally affordable to even this top quintile fambly. Methinks they could be right about that seeing as how the $90k is pretax and the $20k gets paid with after tax money.

      This does beg the question of how the 80% are going to handle this. I mean once all employers either dump health coverage or increase healthcare payroll deductions to cover it.

      From what little I’ve read about the details of “O Care”*, I got the impression that fines are only an option the first two years, then you can’t just take the fine anymore.

      * I’ve been waiting for some Policy PhD with just the right combination of balls and brains to come out with the “clear text” version which explains to the unwashed masses what they are expected to do exactly. The only thing I’m certain of is that Janet Yellen will do lots of QE. Modern Monkey Theory to the rescue, ya know.

      1. Tzimiskes

        This chart by KFF is fairly accessible in explaining what this means for an individual.

        http://healthreform.kff.org/en/the-basics/requirement-to-buy-coverage-flowchart.aspx

        The IRS is using $90,000 because that’s roughly where the cut-off is for the subsidy today (a little over $88,000); and, probably more importantly, it makes the math easier. By 2016, the Federal Poverty Level will have increased, meaning that a household making $90,000 will almost definitely still be receiving a study. I’d also note that I’m not entirely convinced that $20,000 is an accurate estimate for the cost of the Bronze plan for most households since KFF and other organizations give a lower number (given that health care costs can still vary based on age and smoking status, this might not be unrealistic as a maximum, however).

      2. ambrit

        Dear Friends;
        Well, given that the mandatory automobile insurance laws, (another kind of extortion plan,) have some states adding “pay to play” rules, can the same be far behind in the medical field? (Let’s see now, sir, you aren’t covered by any healthcare plan that we can find. Yep, that’s it. Sorry, you are disallowed medical care due to non compliance with Federal Mandates. Please leave our waiting room sir. Stop bleeding all over the rug sir. It’s not hygenic. Next!)

        1. Brooklin Bridge

          Dear Ambrit,

          Shame on you, they are hardly as bad as that!!! They bundle you up against the cold with a plastic sheet, put you in an ambulence, take you to the nearest deserted street in a poor neighborhood, and dump you out. And they even make an effort not to make bruises that might be visible.

        2. Elliot

          “(Let’s see now, sir, you aren’t covered by any healthcare plan that we can find. Yep, that’s it. Sorry, you are disallowed medical care due to non compliance with Federal Mandates. Please leave our waiting room sir. Stop bleeding all over the rug sir. It’s not hygenic. Next!)”

          This is already happening here in my state (rural west). The hospital ER routinely turns people away after looking for insurance and before treating people (say, from a car accident). They also refuse care to Medicare patients if they think they can finagle them into paying privately.

          Most people I know make less than a third of that $90K, and are already doing without insurance or only catastrophic, which covers exactly nothing unless a comet hits you on a Tuesday afternoon. I am quite sure that the only mass insurer in my state will crank up the premiums past the point where any of us can afford them; we will be the test cases for “go on and die then”.

          1. Nathanael

            Your hospital ER is violating federal law. Find a friendly policeman who’s irritated by this and start handcuffing the people at the ER and dragging them off to prison.

  11. hello

    As a single-payer fan, ACA stinks.

    that being said…”CNS News” isn’t an unbiased source.

    The IRS isn’t making any new headlines as $20,000 for a family plan is about the market rate.

    If you’re above average-ly conscious about your health and budget conscious, what probably will work best is opt-out of ACA and take out catastrophic health insurance—-ie for when you get hit by a car, etc, and pay cash for routine medical needs…..take good care of yourself/your family and hope that Medicare is still around when your old.

    1. Veri

      The question being, “What will Americans do in 2021 when they find that family health care premiums are $25,000?”

        1. Nathanael

          Not in 2021. They’ll vote Republican in 2014.

          (Possibly also 2016.)

          By 2021, the political landscape will be wildly different.

    2. Yves Smith Post author

      Tell me exactly how the images in the post, which come STRAIGHT from IRS final regulations published 1/31/13, are biased? You can read yourself that the IRS assumes $20,000 cost for a bronze plan for a family in 2013.

      Don’t insinuate this site is biased, even derivatively.

  12. Veri

    1/4 of all jobs pay less than poverty level. These workers will be a conduit for taxpayer monies to flow to private health care corporations.

    Guaranteed.

    Even the money from the fines – where the fines are counted on to be a much cheaper alternative than purchasing insurance – will find its way into the pockets of health care corporations. Money is fungible.

    The fines amount to nothing more than forced extraction of wealth. Rent. Even if you do not participate in the system, you will be paying rent when fined.

    Win-win for the health-care complex.

  13. Stephen

    This is sloppy reporting (I’d expect this from CNS, not from NakedCaptialism). The $20,000 figure is illustrative of someone who is *exempt* from IRS penalty because they lack an affordable option (8% of income). It is not the IRS’s expectation of what insurance will cost in an exchange – ignoring the fact that the IRS does not manage the state-run exchanges.

    1. Matt

      There are a whole number of sources including personal testimonials that 20,000 a year for a family of 4 is a very common insurance cost in the US. Obamacare will be removing the life time limits that control some costs.
      But then isn’t donating to the the corporate/lobbyist/government/rentiers so enjoyable?

    2. Yves Smith Post author

      This is not sloppy reporting. Go read the IRS final regs. This is exactly what the IRS is anticipating. It’s using this level as an example because that is what it expects, which is what the post stated. That expectation may prove to be a bit off, but this is not a number they just plucked out of the air.

      We made it clear that this was an IRS example. Moreover, the IRS had published PRELIMINARY versions of these regs for comment and review before it published the final regs. If someone in the health care industry (whose lobbyists have been all over the regs like a cheap suit) thought the examples were unrealistically high, you can be sure they would have insisted on lower numbers for the examples.

  14. PQS

    $20K for a family of four isn’t too far off from premiums now…for my little family of three I pay $9K now, and that doesn’t include what my employer pays for me, since I don’t see it. I would imagine, since our company isn’t over 50 people, that he’s paying close to $1K a month per employee.

    What I expect is a lot of opting out and some “innovations” on the home front….even a decade ago I was going to a GP who didn’t even take insurance, and offered a sliding scale for office visits. He recommended getting a catastrophic plan for the big stuff, and kept his office visit costs very reasonable – way less than the “reimbursable” insurance rate. Not having all the staff to process insurance claims saved him huge overhead.

    What we really need is to rein in Big Pharma. My spouse takes Advair, which is over $250 per month at the retail rate (even at Costco.) I shell out for group health insurance just to cover that cost, because if I bought a catastrophic plan for him, I would still be paying almost as much to purchase that one medication, and would be signing up for a bigger deductible and less coverage. I can only imagine what it’s like for people on lots of meds.

    1. Klassy!

      As extractive as the health insurance industry is, I think big Pharma is the biggest villian when it comes to the unsustainable cost of our health care.
      Did anyone catch this article yesterday about a new “orphan drug”. It’s gonna cost 300K a year.
      http://www.nytimes.com/2013/01/31/business/orphan-drugs-for-rare-diseases-gain-popularity-with-pharmaceutical-companies.html
      This was sickening– from their formation of a “patient advocacy” group, their creation of a non profit to help pick up the tab for those who lack insurance and can’t afford the pricetag (hard to imagine who that would be.) and their dedicated “care coordinators”.
      The drug, for those with short bowel symdrome who require intravenous nutrition is being touted as reducing the volume of TPN needed by at least 20% in 2/3 of patients. (the placebo group had a reduction of at least 20% in 30 percent of patients in comparison).
      So, they say TPN costs 100K a year not counting nursing care or hospitalizations. The biggest risk with TPN is a line infection, so I’m not sure how much a reduction in volume needed is going to decrease that risk. (also, why exactly does some dextrose, vitamins and minerals, and fats have to cost 100K a year?)
      But– the medication istself has serious side effects– increased cancer risk, bowel obstruction, and upper respiratory infection. So, what exactly would be the net effect on hospitalizations?
      No worry– the FDA states that thorough risk/benefit analysis for each patient must be undertaken before the therapy is started. I’m sure at 300K a year this will be a very stringent process!

      1. cwaltz

        Speaking as someone who has actually dealt with TPNs I suspect some of the cost goes into labor. A person on a TPN get lab work that gets reviewed by a pharmacist routinely. The pharmacist specifically formulates the TPN based on lab values. A technician is then required to make a TPN using the specific amounts of vitamins, minerals and base solutions.

        A lot of times I hear people talking about hospital costs. They seem to forget you don’t get billed for things like pharmacists, technicians or nurses even though these costs exist for the hospital. However, the hospital does pay these people out of the money that they bill for things like rooms, pharmacy services, lab services, or any of the other service provided. The motrin you get in a hospital costs more than at a drugstore because it goes through the hands of many professionals before it ends up in the hands of a patient (and you kind of want it to since a medication error on someone already compromised enough to need hospitalization can be fatal.)

        Now I do think our system is screwed up from the perspective that the insurance companies do not encourage preventative behavior the way they should. You’d think they’d appreciate the fact that you came in to the ER before the need to be hospitalized but quite often they do not and go out of their way to try and charge you more for “non emergent” care.

    2. Matt

      Total health care is about 2.8 Trillion a year. Pharma is only about 300 billion a year. There are bigger forces at play than Pharma. Follow the money.

      1. Klassy!

        So, what do you think is the biggest driver of costs? I’ll admit that my statement about pharma driving costs was just conjecture.

        1. Klassy!

          Although actually, Pharma has a bigger share of the total healthcare spending pie than I imagined.

  15. Benoit Essiambre

    For comparison, the median family in Canada pays about $15k in income tax (including federal and provincial) and that includes health care. Add about $1000 per person for optional supplemental private insurance which includes prescription medications and dental (if your work doesn’t cover it).

    See how much taxes you would pay (remember that it includes your health care insurance) if you lived in Canada: http://lsminsurance.ca/calculators/canada/income-tax/taxes-2012

      1. Nathanael

        What faulty logic? The parent comment’s point was that the cost of HEALTH INSURANCE ALONE in the US was larger than the ENTIRE TAX BILL INCLUDING HEALTH INSURANCE in Canada.

        In other words, we’re getting cheated bad here in the US.

  16. anne

    Now before you freak out and worry that that is what you will actually have to pay, there are various types of credits for people who are deemed by formula to “lack affordable coverage”.

    [ Freak out and worry:

    http://www.nytimes.com/2013/01/31/us/politics/irs-to-base-insurance-affordability-on-single-coverage.html

    January 30, 2013

    Federal Rule Limits Aid to Families Who Can’t Afford Employers’ Health Coverage
    By ROBERT PEAR

    In deciding whether an employer’s health plan is affordable, the Internal Revenue Service said it would look at the cost of coverage only for an individual, not for a family. ]

    1. lyman alpha blob

      Thx for posting that one- I’d read it yesterday and couldn’t remember where.

      If that interpretation is true – that affordability will be based on the cost of insurance for an individual – then we are very screwed since there is nothing in this mess which controls costs. Pretty easy to rig the system to make it “affordable” for any one individual and then jack up the cots for the rest of the family – and if there is nothing stopping them then they will do it.

      If coverage is deemed “affordable” for the individual but the cost for the rest of the family is outlandish, you are NOT eligible for any of those much touted credits to help those with lower incomes. But I believe the article mentions that if you still can’t pay for the rest of your family’s insurance, you will not be subject to any penalties for not having your kids insured. Whoop de doo- not much consolation when your kids gets sick and you’ve got zero coverage.

      The whole thing is just another scam.

  17. briansays

    63 yesterday 2 more years to medicare i feel sorry for the young–a public option would have made it thru a Pelosi led House it was killed by a Democratic Senate—Blanche Lincoln, Max Baucus, Ben Nelson and Joe Lieberman

    1. ambrit

      Dear briansays;
      Please don’t call Lieberman a Democrat. He’s a dyed in the wool Hasbarist. (Given his background, we shouldn’t be surprised. The funny thing, which Joes’ recent political career shows, is that Aipac is an equal opportunity corrupter.)
      I would be very interested to see what Joes’ opinion is on the ‘Judea and Samaria Movement.’ That would be a tell.

    2. lambert strether

      The “public option” was a vacuous and ever-shifting nothingburger pushed by career “progressives” shilling for the Obama administration to distract attention from the actual, proven solution: Single payer (Medicare for All).

      See here and here.

      If you want a “market state” solution for retirement, then turn Social Security into a “public option,” because the arguments are identical for both programs, as is the motivation: To destroy social insurance so the rentiers can sink their bloodsucking mandibles into our lives even further than they already have.

  18. fledermaus

    This doesn’t even take into account people having to re-pay the subsidies if their income increases during the year.

    So congrats that your wife found a job, here’s a tax bill. Of course, although you have to repay your subsidy if your income increases, if it decreases during the year you are not eligible for increased assistance. This whole bill is a going to be a game theory disaster.

    1. ambrit

      Maam;
      Why do you think that abortion rights are under so heavy an attack now? The Patriarchy likes it when it can keep ‘its’ women “barefoot and pregnant.” Good old family values and all that. (Tongue is firmly in cheek here folks.) (What cheek you ask? Don’t ask, don’t tell. That’s how our Cosmic Overlords like it.)

  19. rotter

    “It makes the underlying problem of the American health care industry, that of excessive costs, only worse”

    Not to mention at all, what these famillies will be(not) getting for their 20,000 dollars…the policies themselves will be pathetic..now for the first time, by order of the govt, millions will be forced to pay exorbitat sums for these nearly worthless products, meanwhile the govt will find its cost has not gone down, but rather up. these finance industry parasites will make a thorough and resounding mockery of any concept of ” universal health care” and for what?? simply because thier lobbyists were allowed to write the fucking bill.

  20. cripes

    Obama’s Heritage Foundation Health Insurance Corporation Guaranteed Profits ® system is a total fustercluck.

    It will succeed only at funneling money into the maw of the vampire insurance corps and likely prove too cumbersome to administer while actual health care costs continue to spiral up, up, up. It will not exist in anything like the present form in a generation. In the meantime, at 55, I’m screwed.

    Fuck you, Obama.

    1. dale pues

      Either that or look for specific care outside the country. Ex: Eight or so years ago I needed outpatient surgery. One day in the hospital my surgeon said. I asked around, four hospitals in my metropolitan area, and was quoted anywhere from 11k to 19k. My surgeons fee of $450 was not included, nor the anestheology. I called a friend living in C.A. and asked him to inquire locally about the costs of the surgery. To make a long story short, I ended up paying $1038.00 for the surgery, complete. The hospital even gave me a ride home in an ambulance, free of charge. Of course, I did have to buy a round trip ticket, $900, and my two week recovery in a fairly nice hotel added another $490. The whole package ended up around $3000.

      1. Nathanael

        Mexico’s become an excellent place to get dental work, and I’m sure the same will happen for the rest of medical care.

        1. QQ

          Nathaneal,

          Thank you for a good example of capitalism at work and why the free market still provides and avenue for saving cost. Why do we then need ACA?

  21. Tim

    Take 20k away from a 90k family and you have the great depression as our consumer economy grinds to a complete halt.

    Austerity destroyes a society by witholding what’s yours, ACA will destroy society by taking what’s yours at gunpoint.

    1. ambrit

      Penpoint. No, my wife says get with the times, that’s byte mark now. (Hmmm. An infinitely regressing point…)

  22. LucyLulu

    The cost of healthcare in the U.S., whether private or public, is already approaching 20% GDP. With babyboomers just now entering the aging demographic, it won’t be too many years before the economy implodes irregardless of what happens with Obamacare. As Yves has pointed out, the fundamental problem isn’t Obamacare, its the U.S. healthcare model. While single-payer would be an improvement, the solution will require a complete overhaul of the system, along with changes in diet and lifestyle.

    1. CRLaRue

      I,like most Americans, used to eat meat, dairy, eggs and
      the general western diet. I had high blood pressure, gout, heart disease and took four meds. I’m now on a vegin diet, No GMO’s,no high frutose corn syrup,no proscessed foods,and daily exercise…. Dropped fifty pounds and no meds. It works for me!

  23. CharlieMJ

    What they conveniently forget to mention is that this for the people who need to buy such a policy, because they’re not covered through their employer, or Medicaid, or Medicare, then the $20,000 cost for insuring a family of 5, is offset by premium subsidies:

    A family with income up to $35,923 – pays no more than $718 in annual premiums.
    A family with income up to $40,515 pays no more than $1,621 in annual premiums.
    A family with income up to $54,020 pays no more than $3,403 in annual premiums.
    A family with income up to $67,525 pays no more than $5,436 in annual premiums.
    A family with income up to $81,030 pays no more than $7,698 in annual premiums.
    A family with income up to $108,040 pays no more than $10,264 in annual premiums.

    And of course, if you have insurance from your employer, you don’t have to worry.

    1. Yves Smith Post author

      I alluded to that in the post.

      Yes, so the government is subsidizing shitty overpriced insurance. $20,000 for a family of four or five is ridiculous. We are supposed to be happy with that???

      And as the poster above pointed out, even with the subsidies, many will find the cost of insurance too high.

      1. Don Levit

        Yves:
        Thanks a lot for posting this IRS Regulation.
        I read every page, and find it to be very helpfil in understanding the PPACA. In particular, I found most helpful page 15 which states “The last category of excepted benefits includes, but only if offered under a policy, certificate, or contract of insurance separate from the primary health coverage. This also includes “similar supplemental coverage to coverage ubder a group plan.”
        The plan that 3 others and I have designed is intended to be a supplement to an employer plan. For $300 a month, coverage builds on the supplemental policy so that in 36 months, the family has $25,000 of paid-up coverage (no further premiums due as long as claims are not made) and $50,000 in 60 months.
        This reduces those ridiculous $20,000 premiums 60-80%.
        We hope to qualify as a non-profit insurer which helps “lessen the burdens of government.”
        And, according to page 54, it provides a “special rule for continuation coverage.” “An individual who may enroll,in continuatuion coverage that provides comparable continuation coverage is eligible for coverage under an employer-sponsored plan only if the individual enrolls in the coverage.” So, this plan can be continued indefinitely after he leaves his employer.
        How did you come across this regulation?
        Don Levit
        Don Levit

  24. UK-USA

    I tried an experient once. I knew that my yearly $450 deductable had kicked in again, so I walked in for an appointment and said I didn’t have coverage any more, and got charged a $55 flat fee for the exact same visit I was paying a 20% copay for. I believed I saved a little that day by not using my health insurance. I went home and looked at what my insurance were charged by the doctor’s office, and found out it was a lot more than the $55 he charged me. What’s up with that? Same office visit (antibiotics script) but different price…..Nice part about it was I wasn’t asked to fill out their insurance update forms again which meant I had a quicker visit…..LOL

    1. Tenney Naumer

      In many cases, the provider (doctor, facility, etc.) will charge the insurance company the so-called going rate, but the provider and the insurance company will have already negotiated a discounted price which is what the insurance company will actually pay the provider.

  25. ScottB

    You guys just don’t understand that Obama is a master chess player. He really does want single payer but knows he can’t get it past Congress now, so he designs Obamacare to be unaffordable, and in the backlash the people will rise up and demand single payer. He’s five moves ahead of everybody.

    Excuse me while I go look for my meds, I get a little delusional when I haven’t taken them…

  26. nilla

    Gee, does anyone know what “EXAMPLE” means?

    The 1040 instructions talk give an example of a $100,000 farm loss. What? How can I afford that? I don’t even own a farm!

    Wake up, people. In your quest to call out the “liberal media”, you’ve let yourself get duped by the conservative media.

    1. Yves Smith Post author

      The $20,000 for a family was used consistently in the examples. As we wrote earlier:

      We made it clear that this was an IRS example. Moreover, the IRS had published PRELIMINARY versions of these regs for comment and review before it published the final regs. If someone in the health care industry (whose lobbyists have been all over the regs like a cheap suit) thought the examples were unrealistically high, you can be sure they would have insisted on lower numbers for the examples.

      This is not a conservative v. liberal issue. ObamaCare is screwing everyone. The progressive left (to the extent it still exists) has been screaming from rooftops how bad it is. Only the Democrat hackocracy (which admittedly is large and loud) and people who have been conned by some of its bells and whistles defend it.

      And farms in America are now mainly a corporate exercise. A $100,000 loss is well within the range of normal for agriculture in America.

      1. nonclassical

        ..and “small business” are the job “creators”??…only when including corporate franchises as “small business”…

  27. different clue

    Would it be cheaper for that family of four to just pay the penaltax for not having coverage, and then pay directly for all normal preventive care, vaccinations, etc.?

  28. Lambert Strether

    I love the names of the plans: Bronze, Silver, Gold.

    Because it communicates so very, very clearly who the winners are, who deserve to live, and who the losers are, who deserve to die.

    Thanks, “progressives”! Obama owes you a solid.

  29. michelle

    Obamacare will fail, the right will be happy, the left will be mad. Hilary will move in and implement it again. The left will be happy, the right will be mad. The libertarians, independents & conservatives (not neo-cons) are the only ones that know whats going on. What a nightmare and sad place this country has become. the fabian socialists wanted control & theres enough stupid people here now that if you show them something shiny they would follow it into the gas chamber. I was told yesterday by a liberal that this is a democracy and the majority voted for Obamacare and I need to get over it. Funny, I dont remember voting for this. He must be confused with how the system works. Sigh…..But he said socialized medicine works great in other countries :-/ we are so screwed.

    1. citalopram

      Nothing changes until American mobilize, march and engage in mass protest. Those who are aware should hunker down and watch the carnage.

  30. 888GZ888

    I am an expat working in Asia. I have heard rumors that expats will be forced to be part of ObamaCare too. Can anyone provably confirm or deny these rumors? Expats from the USA get screwed in so many ways by the USA government that I can easily believe that we will be further screwed with ObamaCare as well.

    1. Yves Smith Post author

      I am not a tax expert and this is not tax advice.

      The post has a link to the regs. I skimmed them and saw a discussion that if you were outside the US, this didn’t apply. But DO NOT TAKE MY WORD. Read the regs and/or consult a tax professional.

  31. Kaz Augustin

    I wish an Australian could chime in here because Obama-care sounds suspiciously like the system that was instituted in Australia before we left. Don’t have health care? Then pay 2.5% of your income as a “levy” (Medicare + 1% premium) on your “not being insured”.

    Wait to get insurance? Then pay a premium (2% per annum) for each year above 31 years before you get it. In any case, the “gap” between the “scheduled fee” (the amount that is calculated for what insurance will cover…usually only 75% of Schedule) and the “actual fee” is still out of your own pocket, so there is no way you could call it fair.

    Am convinced that Australia is used as a sand-pit for many neoliberal policies, much as it’s used as a sandpit for trialling motor vehicle prototypes. But that may just be my gut talking.

  32. Tenney Naumer

    I have not seen anyone mention that during the fiscal cliff negotiations, the one really great thing about the ACA was gutted — the funding for the states to set up consumer-run insurance coops:

    “The fiscal cliff deal, approved by Congress on New Year’s Day, eliminates most of the more than $1.4 billion in remaining funding from the federal health law for new nonprofit, customer-owned health plans designed to compete against the major for-profit insurers,” reports MedPage Today.

    The withdrawal comes after a two-year period in which nearly $2 billion in loans were approved for 24 proposed state co-ops. Those loans will escape the cut, but no new loans can be approved for any additional co-ops.

    “We were blindsided by the elimination of funds,” said John Morrison, president of the National Alliance of State Health Cooperatives. “The health insurance industry is getting its way here by torpedoing co-ops in the 26 remaining states. This is not about budgets; it is about those health insurance giants killing competition at the expense of millions of Americans who will pay higher premiums because of it.”

    http://www.truthdig.com/eartotheground/item/fiscal_deal_kills_new_funding_for_health_co-ops_20130104/

  33. ChicagoTim

    It seems that after reading the 120+ comments, this discussion is almost identical to the fiscal cliff discussion. Do we have a revenue problem or a spending problem? Obamacare treats this as a revenue problem (need more insurance). Big pharma and health care providers would be the spending (cost) side of the problem. I think we have a spending problem. Everyone probably has their own anecdote. My 3 year old had 4 stitches put in his eyebrow and then removed one week later. My insurance (BCBS) was billed AND PAID $2400: $900 to put the stitches in and $1500 to remove them. Until we focus on this side of the equation, the discussion is going absolutely nowhere.

    1. Tenney Naumer

      Many may not have noticed that the salaries paid to CEOs of insurance companies and healthcare organizations are as large or larger than a great many banksters.

      Then there are the book cookers extraordinaire like Tenet.

  34. John

    With the health insurance industry bloodsuckers taking so much there isn’t much left for the other bloodsuckers to take.

    The host is almost sucked dry.

    Oh well, on to Asia.

  35. nah

    i was infavor of obamacare… cuz i knew people would finally realize how busted the system was when it was forced down their throat
    .
    finally after 4 years, maybe a few more we can have a real conversation about special interests, handouts, and big government monopolies in healthcare
    .
    twas it was up to me id have eveyone pay cash… next best id figure is single payer… if keeping costs down is whats the jazz

  36. Titus

    This is not meant as a defense of Obamacare, which I opposed, but it should be pointed out that the “assumption” about a $20,000 family policy was NOT a prediction of what the cheapest or the average premium will be in 2016, but rather was part of a section of illustrations about what would or would not be considered “affordable care” under Obamacare. Under Obamacare, someone without access to “affordable care” as defined by some very complicated formulas will be exempt from the mandate to purchase insurance.
    That being said, some people in high cost regions who are older or who smoke are going to face unaffordable premiums, and because Obamacare does nothing to control costs, it is only a matter of time before so many people face crazy-priced policies that the whole system comes crashing down. There are many legitimate reasons to oppose Obamacare, but the IRS predicting a $20,000 average minimum premium for a family policy in 2016 is not one of them.

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