Obamacare: What does it cost?

[Update 11/2/2015:   Health Sherpa, www.healthsherpa.com, has uploaded 2016 prices that you can also find in the federal health insurance Marketplace (Healthcare dot gov), or on your state’s exchange if you are in a state like California or New York.  If you don’t have a policy, you have until January 31, 2016 to get one for all or part of 2016 (the open enrollment).   If you are getting dropped, like Highmark is doing to many here in Lancaster County, you have until December 15th to get January 1st coverage.]

[Update 11/14/14:  Health Sherpa, www.healthsherpa.com, is now quoting 2015 prices that you will also find on Healthcare.gov.    The Sherpa is still a little faster, but you need to go through Healthcare.gov or your state’s website, if your state did not designate Healthcare.gov. as your site.]

[Update 1/1/14: Affordable Care Act is now in effect, and “real”, as you can see here.]

[Update 11/13/13: Courtesy of Jim, a reader, I am aware of www.thehealthsherpa.com, which can get you quotes for ACA compliant policies in your zip code, plus do a good rough estimate of the premium credit you may be eligible for. Remember to use MAGI income for income. I tested the site with my own policy and figures. It works! (Why couldn’t the private government contractor do this in a week like these folks did?)]

[Update 11/4/13: I now have a policy through the Obamacare (ACA) website, but it did involve overcoming this one little glitch.]

[Update 9/22/13: On the link above, mentioned below (!), you can find yet another link to the Kaiser Family Foundation Affordable Care Act calculator, or use the one here. California has tailored theirs to the offerings in their state.]

[Update 6/16/13: One of the page links above, in the black band there where it starts “NEW”, has its own link to “Covered California”. California has its own nice Obamacare calculator. The gross prices are of course only for Cali, but the “net” price is net of the federal credit available on the Exchange. So people in practically every other state can use it!]

[Update 11/19/12: If your household is more than just a single person, the figures below need to be adjusted for your family size!]

[Update 11/22/12: I came up with a graph showing the estimated cost of an Exchange policy for single people with “adjusted gross income” (AGI) between 133% and 400% of the federal poverty level. This is a range from about $15,700 AGI to $47,000 AGI, in 2014. No one knows what the official numbers will be in 2014, but they will be based off AGI in 2012. There is a planning opportunity, then, to make your AGI under 400% of poverty level this year if you feel you will need to be in the Exchange (example: if you have an expensive individual policy right now.)

Back to the original post: ]

I have been running the numbers from a spreadsheet I made in 2010.

As it stands now, in states that adopt the “Medicaid Expansion”, people who have adjusted gross income (AGI) at [or below] 133% of the poverty level ($14,000 or so for a single individual) would be automatically picked up by the state’s Medicaid. (You might have to fill out the paperwork.)

The Supreme Court decision yesterday made this Medicaid Expansion voluntary, so if your state is dumb enough to say “no” to the feds, you wouldn’t get that coverage. To give away a 100% federal credit to cover the Expansion for the first several years, a state has got to really be run by some people who can’t do math. But maybe there are states like that, south of me . . . (And maybe the very one I’m sitting in, when you think about it.)

Obamacare also has a system of insurance exchanges. These are for people at 133% of poverty level, all the way up to 400%. For a single person, that’s an AGI of around $45,000. For a family of four, maybe $90,000.

Starting in January 2014, there will be an exchange in each state where you can buy a policy and receive a subsidy from the government — just like how people who get employer-paid insurance don’t have to pay taxes on theirs. (That is a subsidy, too, right?)

For a single individual, here are some maximum prices I estimated:

AGI of $20,000: $1,067 a year

$25,000: $1,783 a year

$30,000: $2,577 a year

$35,000: $3,325 a year

$40,000: $3,800 a year

As you can see, the more income you have, the higher the price. But the price is still pretty reasonable compared to trying to buy an individual policy on the private market. (It’s expected that that old business will dry up under the new program, because you’d just go to an exchange and get the policy there. That is one reason why the insurance companies have had their cronies screaming about Obamacare.)

Remember, that that AGI is after deductions for things like 401(k) and IRA. Many people will discover that it’s better to manage their income in a way that brings them to the 400% of poverty level cap. This way, they would be able to get the exchange subsidy.

A lot of the people who have been screaming about Obamacare don’t seem to realize that a low priced policy would be a great benefit to them. They are afraid of being dropped by the employer’s coverage, and “forced” into the exchanges. Except the law says the employer can’t do that. Plus, this thing about “forced”. Again. The insurance companies in the exchanges will be the same ones writing employer-based policies. So you are getting the same coverage from a different delivery channel. And that’s really only if you lose your job and your employer-based coverage.

In Japan, there is employer-based coverage. Occasionally, and frequently with foreigners, the employer tries to skirt the coverage. In any event, there is always municipal health insurance. The premiums are based on the Japanese version of adjusted gross income. (It’s like our own, because the Japanese tax system was set up after the war by a Columbia Professor, Carl Schoup. But it has its differences. I digress.) You pay less if you make less; more if you make more. There is a cap of about 690,000 yen, I think. At least, that’s what it was in the last full year I was there.

If you ever lived under another health system, you know how screwy the American one is. Obamacare starts to fix it. It’s not a complete fix. It’s like a jerry-rig of a fix on to another part they don’t want to change. But it is a fix.

It’s better than what was, for sure.

[Update: It isn’t clear whether, in states that don’t adopt Medicaid Expansion, whether their people under 133% of poverty level can go to the exchange and get the subsidy there. At $14,800, an exchange policy is $297. Why can’t they just offer that price for people below $14,800?]

[Update 6/30/12: The 2012 U.S. federal poverty guidelines. 400% of poverty level for a family of four is $92,200.]

[Update #2 6/30/12: What is “household income” for purposes of the Affordable Care Act? I’ve seen a couple of different Powerpoints online that attempt to say, but I am going to rely on IRC 36B(d) as linked. It sounds like it’s AGI off the tax return, plus the Foreign Earned Income Exclusion, plus any tax-exempt interest. I don’t know if they ever fixed that loophole where the seniors who retire at 62 can collect social security and have it not count as income if it’s off the tax return.]