Kaiser Family Foundation

Based on the Patient Protection and Affordable Care Act (including subsequent amendments in the Health Care and Education Reconciliation Act of 2010), as signed by the President.

The premiums are illustrative examples in 2014 dollars derived from estimates of average premiums for 2016 from the Congressional Budget Office.

Premium subsidies are based on a silver plan (with an actuarial value of 70%), so all premiums shown are for silver coverage. People may be able to pay a lower premium for less comprehensive coverage (i.e., a bronze plan, with an actuarial value of 60%). The tables showing results by age and income also reflect premiums for silver coverage, though the minimum insurance that people would be required to obtain would be bronze coverage.

The actual premium calculated is adjusted for family type, and for age (within the three to one limit specified in the proposal). Subsidized people can enroll in more expensive plans, but must pay the full difference in the premium.

Health Reform Subsidy Calculator:
http://healthreform.kff.org/SubsidyCalculator.aspx#incomeAgeTables

Comment: 

By Don McCanne, MD

On June 28, the Supreme Court will release its ruling on the constitutionality of the Affordable Care Act. If the full Act is repealed, individuals who would have purchased plans in the state insurance exchanges will receive neither their premium subsidies nor their tax credits for out-of-pocket expenses. What precisely would they be losing?

Let’s use the Health Reform Subsidy Calculator to check a few examples. In each example, we will assume that the policyholder is 45, has a family of four, and does not have employer coverage available. For this family living in a region with a medium cost factor, the predicted premium for the silver plan (70% actuarial value) is $14,245. In the examples, we will change only the income level.

Income:  $31,155 (133% of poverty)
Premium payment:  None – covered by Medicaid
Maximum out-of-pocket costs:  None – covered by Medicaid

Income:  $31,156 (133% of poverty plus $1)
Premium payment:  $935
Maximum out-of-pocket costs:  $4,167

Note that at this level, one additional dollar of income results in the family losing the more comprehensive benefits of the Medicaid program, and mandates that they pay a premium of $935 plus potential out-of-pocket expenses of $4,167, for a total exposure of $5,202. That’s a staggering amount at this income level. Compliance surely would be a problem, not by lack of will but simply by inability to pay.

Income:  $93,700 (400% of poverty)
Premium payment:  $8,901
Maximum out-of-pocket costs:  $8,333

Income:  $93,701 (400% of poverty plus $1)
Premium payment:  $14,245
Maximum out-of-pocket costs:  $12,500

So at an income of $93,700, the premium would be $8,901 and the potential out-of-pocket costs would be $8,333, for a total exposure of $17,234. That is quite a dent for a family that is trying to save for two college educations, a retirement fund, and maybe for replacement of the broken-down family automobile. But add just one more dollar of income and the premium shoots up to $14,245 and potential out-of-pocket expenses to $12,500, for a total of $26,745. Then what are you going to cut out of the family budget? And isn’t the $9,511 increase quite a “tax” to pay on that one dollar of additional income?

Just the premium increase alone might cause this family to downgrade their coverage from silver (70% actuarial value) to bronze (60%) in order to save on the premium. If so, this family literally would be placing a bet that none of them would develop a serious medical problem, and it would lose the bet if any of them did so. Should we really be forcing a family to gamble on its health care coverage?

If the Affordable Care Act is repealed, all of this goes away, and many more would remain with no coverage at all. That would be tragic. But even if the Act is upheld, this coverage is still far from satisfactory, and should be unacceptable as a standard for our nation. Regardless of the Supreme Court decision, we should replace the Affordable Care Act with a program that really does work: a single payer, improved Medicare for all.

Health Reform Subsidy Calculator

Kaiser Family Foundation
Based on the Patient Protection and Affordable Care Act (including subsequent amendments in the Health Care and Education Reconciliation Act of 2010), as signed by the President.
The premiums are illustrative examples in 2014 dollars derived from estimates of average premiums for 2016 from the Congressional Budget Office.
Premium subsidies are based on a silver plan (with an actuarial value of 70%), so all premiums shown are for silver coverage. People may be able to pay a lower premium for less comprehensive coverage (i.e., a bronze plan, with an actuarial value of 60%). The tables showing results by age and income also reflect premiums for silver coverage, though the minimum insurance that people would be required to obtain would be bronze coverage.
The actual premium calculated is adjusted for family type, and for age (within the three to one limit specified in the proposal). Subsidized people can enroll in more expensive plans, but must pay the full difference in the premium.
Health Reform Subsidy Calculator:
http://healthreform.kff.org/SubsidyCalculator.aspx#incomeAgeTables

On June 28, the Supreme Court will release its ruling on the constitutionality of the Affordable Care Act. If the full Act is repealed, individuals who would have purchased plans in the state insurance exchanges will receive neither their premium subsidies nor their tax credits for out-of-pocket expenses. What precisely would they be losing?
Let’s use the Health Reform Subsidy Calculator to check a few examples. In each example, we will assume that the policyholder is 45, has a family of four, and does not have employer coverage available. For this family living in a region with a medium cost factor, the predicted premium for the silver plan (70% actuarial value) is $14,245. In the examples, we will change only the income level.
Income:  $31,155 (133% of poverty)
Premium payment:  None – covered by Medicaid
Maximum out-of-pocket costs:  None – covered by Medicaid
Income:  $31,156 (133% of poverty plus $1)
Premium payment:  $935
Maximum out-of-pocket costs:  $4,167
Note that at this level, one additional dollar of income results in the family losing the more comprehensive benefits of the Medicaid program, and mandates that they pay a premium of $935 plus potential out-of-pocket expenses of $4,167, for a total exposure of $5,202. That’s a staggering amount at this income level. Compliance surely would be a problem, not by lack of will but simply by inability to pay.
Income:  $93,700 (400% of poverty)
Premium payment:  $8,901
Maximum out-of-pocket costs:  $8,333
Income:  $93,701 (400% of poverty plus $1)
Premium payment:  $14,245
Maximum out-of-pocket costs:  $12,500
So at an income of $93,700, the premium would be $8,901 and the potential out-of-pocket costs would be $8,333, for a total exposure of $17,234. That is quite a dent for a family that is trying to save for two college educations, a retirement fund, and maybe for replacement of the broken-down family automobile. But add just one more dollar of income and the premium shoots up to $14,245 and potential out-of-pocket expenses to $12,500, for a total of $26,745. Then what are you going to cut out of the family budget? And isn’t the $9,511 increase quite a “tax” to pay on that one dollar of additional income?
Just the premium increase alone might cause this family to downgrade their coverage from silver (70% actuarial value) to bronze (60%) in order to save on the premium. If so, this family literally would be placing a bet that none of them would develop a serious medical problem, and it would lose the bet if any of them did so. Should we really be forcing a family to gamble on its health care coverage?
If the Affordable Care Act is repealed, all of this goes away, and many more would remain with no coverage at all. That would be tragic. But even if the Act is upheld, this coverage is still far from satisfactory, and should be unacceptable as a standard for our nation. Regardless of the Supreme Court decision, we should replace the Affordable Care Act with a program that really does work: a single payer, improved Medicare for all.

By Austin Frakt, PhD
JAMA Forum, June 21, 2012

In a new article in the Annual Review of Economics, Katherine Baicker, Amitabh Chandra, and Jon Skinner point out some of the ways Medicare has helped solve a coordination problem among private plans:
 
“It is natural to ask why private providers have not adopted ACOs [Accountable Care Organizations, groups that give coordinated health care and for whom payment is tied to achieving health care quality outcomes and goals that can lead to cost savings] or more bundled payments on their own. This remains a puzzle. One explanation is that it is a coordination problem—all insurers may want to adopt larger bundled payments, but no single insurer can make the transition. This is certainly consistent with the historical record on the adoption of prospective payment for hospital care. Once it was introduced in Medicare, private plans were quick to adopt it. Similarly, private hospitals were quick to use the federal government’s efforts to measure quality of care even though nothing stopped them from forming consortiums to measure quality before these federal efforts.”

Their points are generally valid in that it’s common for private plans to adopt certain types of payment reforms and quality monitoring after these measures are introduced in Medicare but not before. Nevertheless, there are some examples of ACO-like contracts made by private plans ahead of the Medicare counterparts. And that doesn’t count the failed attempts at capitation (establishing a dollar amount to cover the cost of health care services provided for an individual during a specified length of time) by private insurers and provider groups in the 1990s. I don’t think this invalidates the general point the authors make. It seems Medicare has solved a coordination problem among private insurers.
 
Indeed, some of the things Medicare will do are properly viewed as public goods. All but a handful of large, dominant health plans cannot convince large hospital systems to accept a new form of payment system. But Medicare can. What health plan will do its own comparative effectiveness analysis to determine which interventions work best for managing a condition? Medicare will or could. The results of both of these types of innovations, and others, will be public information and can benefit all plans and all consumers.
 
History shows that Medicare has done some things private plans seem unable to do, and then private plans voluntarily copy Medicare. But it goes the other way too.
 
For example, private plans have innovated in ways that traditional Medicare has not. Managed care, consumer-directed health plans, prescription drug benefits, and catastrophic coverage all exist or existed in the commercial market before adoption by Medicare (if ever). In some cases, the Medicare program, though not the traditional fee-for-service arm of Medicare itself, followed private plans’ lead, adding managed care plans (Medicare Advantage) and a prescription drug benefit (Part D), for example.

There does seem to be a coordination problem among private plans that Medicare solves. Likewise, the private sector sometimes does a better job of designing health plan options. That both plan types, private and government, play a worthwhile role needn’t be shocking or blasphemous. The fact that they both play worthwhile roles ought to be widely acknowledged. Naturally, it often isn’t—least of all, it seems, in our politically charged health policy debates.

http://newsatjama.jama.com/2012/06/21/jama-forum-how-medicare-solves-private-plans-problems-and-vice-versa/

Comment: 

By Don McCanne, MD

Austin Frakt makes the point that both Medicare and the private health insurers have each independently introduced innovations that then can help the other when these innovations are shared. But when you look at the respective innovations, it becomes obvious which innovator it is that truly serves the interests of patients.

Medicare attempts to create greater value when using taxpayer and premium dollars for the payment of health care services. Thus you see innovations such as the adoption of prospective payment for hospital care. We benefit both as taxpayers and as patients.

Look at the innovations of private insurers that Frakt mentions: managed care, consumer-directed health plans, and prescription drug benefit plans. These designs take away choice of health care professionals and institutions, choice of drug benefits, and also erect financial barriers between the patient and health care. Here the process of innovation is not used to benefit patients, but rather is designed to enhance the business model of the intermediary intruder – the private insurance plans.

Frakt points out that these private innovations are being used by Medicare in the private Medicare Advantage plans and in the private Part D Medicare drug benefit. True, but these are terrible innovations to introduce into Medicare because they waste funds and reduce choice while increasing administrative complexity. Medicare’s adoption of private innovations has been a bad thing, not a good thing.

Coordinated care is certainly beneficial and should be expected regardless of whether Medicare or private insurers are paying the bills. There may be instances where bundling of payment would be appropriate, just as capitation has been appropriate in selected circumstances. If it benefits both taxpayers and patients, it would be appropriate. The risk is that the business mind of the private insurers will most likely morph accountable care organizations into intermediary intruders designed to benefit third party payers, likely at a cost to patients. That is not a desirable innovation.

Frakt does make the important point that Medicare does not provide catastrophic coverage, whereas some private plans do. Medicare certainly should as well. But that’s not really a private plan innovation; it’s merely a benefit that should have been included in Medicare in the first place. That is one more reason why we advocate for an improved Medicare for all, rather than merely for a universal expansion of the existing Medicare program.

Government can do it. In fact, it is leading on the catastrophic coverage benefit by making it a requirement through the Affordable Care Act. Innovation in the private sector benefits the private sector. Innovation in the government serves the public interest. Trading public and private innovation is not in our interest when we come out the losers.

How Medicare Solves Private Plans’ Problems and Vice Versa

By Austin Frakt, PhD
JAMA Forum, June 21, 2012
In a new article in the Annual Review of Economics, Katherine Baicker, Amitabh Chandra, and Jon Skinner point out some of the ways Medicare has helped solve a coordination problem among private plans:
“It is natural to ask why private providers have not adopted ACOs [Accountable Care Organizations, groups that give coordinated health care and for whom payment is tied to achieving health care quality outcomes and goals that can lead to cost savings] or more bundled payments on their own. This remains a puzzle. One explanation is that it is a coordination problem—all insurers may want to adopt larger bundled payments, but no single insurer can make the transition. This is certainly consistent with the historical record on the adoption of prospective payment for hospital care. Once it was introduced in Medicare, private plans were quick to adopt it. Similarly, private hospitals were quick to use the federal government’s efforts to measure quality of care even though nothing stopped them from forming consortiums to measure quality before these federal efforts.”
Their points are generally valid in that it’s common for private plans to adopt certain types of payment reforms and quality monitoring after these measures are introduced in Medicare but not before. Nevertheless, there are some examples of ACO-like contracts made by private plans ahead of the Medicare counterparts. And that doesn’t count the failed attempts at capitation (establishing a dollar amount to cover the cost of health care services provided for an individual during a specified length of time) by private insurers and provider groups in the 1990s. I don’t think this invalidates the general point the authors make. It seems Medicare has solved a coordination problem among private insurers.
Indeed, some of the things Medicare will do are properly viewed as public goods. All but a handful of large, dominant health plans cannot convince large hospital systems to accept a new form of payment system. But Medicare can. What health plan will do its own comparative effectiveness analysis to determine which interventions work best for managing a condition? Medicare will or could. The results of both of these types of innovations, and others, will be public information and can benefit all plans and all consumers.
History shows that Medicare has done some things private plans seem unable to do, and then private plans voluntarily copy Medicare. But it goes the other way too.
For example, private plans have innovated in ways that traditional Medicare has not. Managed care, consumer-directed health plans, prescription drug benefits, and catastrophic coverage all exist or existed in the commercial market before adoption by Medicare (if ever). In some cases, the Medicare program, though not the traditional fee-for-service arm of Medicare itself, followed private plans’ lead, adding managed care plans (Medicare Advantage) and a prescription drug benefit (Part D), for example.
There does seem to be a coordination problem among private plans that Medicare solves. Likewise, the private sector sometimes does a better job of designing health plan options. That both plan types, private and government, play a worthwhile role needn’t be shocking or blasphemous. The fact that they both play worthwhile roles ought to be widely acknowledged. Naturally, it often isn’t—least of all, it seems, in our politically charged health policy debates.
http://newsatjama.jama.com/2012/06/21/jama-forum-how-medicare-solves-private-plans-problems-and-vice-versa/

Austin Frakt makes the point that both Medicare and the private health insurers have each independently introduced innovations that then can help the other when these innovations are shared. But when you look at the respective innovations, it becomes obvious which innovator it is that truly serves the interests of patients.
Medicare attempts to create greater value when using taxpayer and premium dollars for the payment of health care services. Thus you see innovations such as the adoption of prospective payment for hospital care. We benefit both as taxpayers and as patients.
Look at the innovations of private insurers that Frakt mentions: managed care, consumer-directed health plans, and prescription drug benefit plans. These designs take away choice of health care professionals and institutions, choice of drug benefits, and also erect financial barriers between the patient and health care. Here the process of innovation is not used to benefit patients, but rather is designed to enhance the business model of the intermediary intruder – the private insurance plans.
Frakt points out that these private innovations are being used by Medicare in the private Medicare Advantage plans and in the private Part D Medicare drug benefit. True, but these are terrible innovations to introduce into Medicare because they waste funds and reduce choice while increasing administrative complexity. Medicare’s adoption of private innovations has been a bad thing, not a good thing.
Coordinated care is certainly beneficial and should be expected regardless of whether Medicare or private insurers are paying the bills. There may be instances where bundling of payment would be appropriate, just as capitation has been appropriate in selected circumstances. If it benefits both taxpayers and patients, it would be appropriate. The risk is that the business mind of the private insurers will most likely morph accountable care organizations into intermediary intruders designed to benefit third party payers, likely at a cost to patients. That is not a desirable innovation.
Frakt does make the important point that Medicare does not provide catastrophic coverage, whereas some private plans do. Medicare certainly should as well. But that’s not really a private plan innovation; it’s merely a benefit that should have been included in Medicare in the first place. That is one more reason why we advocate for an improved Medicare for all, rather than merely for a universal expansion of the existing Medicare program.
Government can do it. In fact, it is leading on the catastrophic coverage benefit by making it a requirement through the Affordable Care Act. Innovation in the private sector benefits the private sector. Innovation in the government serves the public interest. Trading public and private innovation is not in our interest when we come out the losers.

Families USA
June 2012

Key Findings

* Across the nation, 26,100 people between the ages of 25 and 64 died prematurely due to a lack of health coverage in 2010.

* Between 2005 and 2010, the number of people who died prematurely each year due to a lack of health coverage rose from 20,350 to 26,100.

* Between 2005 and 2010, the total number of people who died prematurely due to a lack of health coverage was 134,120.

Why Insurance Matters

* The uninsured are less likely to have a usual source of care outside of the emergency room.

* The uninsured often go without screenings and preventive care.

* The uninsured often delay or forgo needed medical care.

* Uninsured Americans are sicker and die earlier than those who have insurance.

* The uninsured pay more for medical care.

http://familiesusa2.org/assets/pdfs/Dying-for-Coverage.pdf

Comment: 

By Don McCanne, MD

In 2010, about 26,000 of the nearly 50 million people without health insurance died due to the lack of that insurance. At best, about 26 million people will remain uninsured if the Affordable Care act is upheld by the Supreme Court. That means that we will continue to accept about 13,000 deaths per year as a consequence of our failure to enact a single payer national health program.

It is one thing to accept inordinate financial waste in our system in order to cater to the private insurance industry, but it is quite another to accept so much suffering and death. The former reflects on our illogical willingness to accept social injustices in order to cater to the moneyed class, but to knowingly accept the latter reflects on the most basic moral fiber of our society.

Is it that people don’t understand? Or are we really that animalistic?

Addendum:

Dying for Coverage: The Deadly Consequences of Being Uninsured

Families USA
June 2012
Key Findings
* Across the nation, 26,100 people between the ages of 25 and 64 died prematurely due to a lack of health coverage in 2010.
* Between 2005 and 2010, the number of people who died prematurely each year due to a lack of health coverage rose from 20,350 to 26,100.
* Between 2005 and 2010, the total number of people who died prematurely due to a lack of health coverage was 134,120.
Why Insurance Matters
* The uninsured are less likely to have a usual source of care outside of the emergency room.
* The uninsured often go without screenings and preventive care.
* The uninsured often delay or forgo needed medical care.
* Uninsured Americans are sicker and die earlier than those who have insurance.
* The uninsured pay more for medical care.
http://familiesusa2.org/assets/pdfs/Dying-for-Coverage.pdf

In 2010, about 26,000 of the nearly 50 million people without health insurance died due to the lack of that insurance. At best, about 26 million people will remain uninsured if the Affordable Care act is upheld by the Supreme Court. That means that we will continue to accept about 13,000 deaths per year as a consequence of our failure to enact a single payer national health program.
It is one thing to accept inordinate financial waste in our system in order to cater to the private insurance industry, but it is quite another to accept so much suffering and death. The former reflects on our illogical willingness to accept social injustices in order to cater to the moneyed class, but to knowingly accept the latter reflects on the most basic moral fiber of our society.
Is it that people don’t understand? Or are we really that animalistic?
Addendum: