Tuesday, September 24, 2013

Patient Protection Act - Cause it isn't Affordable

With insurance Exchanges Marketplaces nearing their grand opening HHS has released another issue brief on the "low rates" people will pay after subsidies. In one of the examples they use a 27 year old in Texas who makes $25,000 per year. This person will pay $145 for the second lowest cost silver plan or $83 for the bronze plan after the subsidy.

HHS is so focused on premiums and making this trainwreck look affordable that they are missing the boat on a key component, the benefits. Without knowing the health history of the individual they may in fact be promoting the exact opposite of what the person is looking for: the greatest value for their dollar.

If I am a 27 year old with diabetes, am extremely obese, and suffer from Crohn's disease would I want to purchase a plan with a $5000 deductible and $6350 out of pocket maximum? That is what I will likely get for $83 per month. 

From a financial standpoint: 

Income:  $25,000
Premiums:  $996
OPM:  $6350

Net Income: $17,654

30% of income for insurance and health care costs. This is what HHS considers "affordable".
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