Taxation and health care: A Proven Relationship that Works

“It’s not liberty if it’s mandatory.” “It’s not American if it’s mandatory.”  I’ve read these from my aunt’s Facebook wall many times in reference to the fact that Americans must purchase health insurance in 2014 or pay a tax fine.  First, I’d like to ask her if I can quit paying taxes in general since I don’t find filing and paying taxes to be liberating processes.  But, that’s another issue for another time. 

That got me thinking.  Why did lawmakers intertwine health care with taxation?  I started researching other health systems in the world that are more efficient and better than ours.  It turns out that many require mandatory taxes.

How can you say other countries are better than ours?

First, let me explain what I mean by more efficient/ better.  In all of the studies I found, these factors are based upon things such as health equality, responsiveness and responsiveness equality, lifetime expectancy and lifetime satisfaction (are you able to do a lot at an older age), cost, and health care quality.  Turns out, across the board, we spend the most on health care and have the worst return on investment.  Well, our quality has to be top-notch at the very least, right?  WRONG.  I would’ve liked to have continued living without knowing that fact (including the fact that we rank last out of seven industrialized countries on safe care).  China and Iran are better at this whole health care thing than us, need I say more?

Examples of Countries Requiring Health Care Tax Contributions:

• Andora
• Australia
• Belgium
• France
• Ireland
• Japan
• Malta
• Singapore
• Sweden
• United Kingdom

These Sound Just Like the ACA... and They’re  Successful

I am quoting this information because it is well said in a concise manner.

Belgium: "The Belgian health care system is mandatory and is a mixed public-private system. There are private providers with state-organized reimbursements."

Switzerland: "In Switzerland, health care is guaranteed to all citizens. Citizens must buy health insurance and in return, private insurers must offer coverage to all citizens."

Netherlands: "Holland's universal health coverage is achieved not through the government, which is used primarily as a regulatory body, but through private insurance companies. This system is based on private insurers competing for business."

Singapore: "A government-run universal health care system coexists with a private sector in Singapore. The private sector provides most care while the government controls prices."

Other Criticisms that are Successful Elsewhere

Obamacare has also been criticized for making taxpayers foot the bill so illegal aliens can get covered.  This isn’t true… at least in the U.S.  But, it is in practice elsewhere in countries with more successful systems than ours.

Sweden covers illegals… and it uses taxes to do so (oh the horror… I suppose illegals don’t regularly visit the ER then which is an occurrence here causing high bills for American taxpayers).

Austria is a place I want to visit: Austria even covers health care costs of tourists!!!! 

Enrollment Updates

Local
Today, our Certified Application Counselor was finally able enroll someone online!

The woman was able to look at different plans and compare them.

The woman was paying over $500 a month for insurance.  She selected a plan is $250/ month, and with her tax subsidy, it will end up costing her $70/ month. 

Stay tuned for more details on this story!

*As a side note, though, navigators and certified application counselors (CACs) do not have any special access or magic powers to access the Marketplace. Our CAC has been receiving many phone calls from people looking for her to get them access to the Web site.  The best they can do is sit down with you and hope it works.  If not, they can at least educate you about the law and answer any questions you may have. 

National
We just learned on a conference call that the enrollment period for January 1 coverage has been extended from December 15 now to December 23.

The enrollment period for 2015 will now take place November 15, 2014- January 15, 2015 (It was pushed back a month and extended by a week).

If you can't keep your insurance… where you stand

President Obama upset millions of Americans.  Over the past few years, he said that “If you like your health plan, you can keep it.”  This has turned out not to be true for 5% of Americans.

It appears these plans will be available at least for a little while.  

My Advice: Consider New Options

If this happened to me, I would be mad as hell.  Especially since it’s difficult to access the new plans.  I would be worried about prices and coverage.  But, I would research what I could.  In considering this scenario, I did the research anyway. 

Here’s what I’ve come up: 

-      Any plan that was created before the passage of the ACA in 2010 was “grandfathered’ into the new Marketplace. These remain. 

-      Any plan that was created or changed after 2010 that did not meet the requirements of the ACA would be cancelled at the end of 2013. 

So, yes, the President lied.  But, the plans that people want to keep are expensive and do not carry important consumer protections such as the 10 essential health care benefits.  “Individual policies have long been a problematic part of the insurance market, with higher prices than most group plans, fewer benefits and a tendency to cut people off when they get sick,” says a Washington Post article. 

I am sure with all of this debate that people will have a little longer to choose.  I am personally hopeful that the Marketplace Web site will be working by January 1^st.  I might wait to research coverage and pricing in the Marketplace and compare the information to my current plan.  After all, a plan from the Marketplace not only brings guaranteed better protections, but it also comes with a subsidy to lower the cost. 

Proposed Fixes:

1. Obama: These plans can carry on for one more year.

2. The Senate: A few plans similar to Obama’s have been proposed.  The Landrieu bill would allow for Americans on these plans to stay on them indefinitely.  The Udall bill would allow for these plans to stay around for two years. Then, they would be cancelled.

3. The House of Representatives: Americans on these plans can stay on them, and insurance companies can sell them to others who are shopping around for insurance.  This has already passed in the House and will need approval from the Senate and the President. 

Another twist to all of this: Any decision would also need approval by each state’s insurance commissioner.  

ACA Health Care Plan Costs: Explanation and Examples

Example Pricing: Western Pennsylvania

 

Explanation of Graphics 

As you can see, each health insurance provider listed a plan for each of the metal levels which we discussed in the previous blog post.  You may also notice a “Catastrophic” option.  This is available to adults under 30 years old.  It is a very low monthly payment compared to the metal levels, but a higher out-of-pocket expense if the person needs something extra such as an emergency room visit.   

The Catastrophic plan allows for 3 primary care visits/ year with no added cost (compared to unlimited visits with the metal level plans) and must cover the essential health benefits which we covered in the Halloween post. 

Plan Pricing is based on four factors:

Age:

Before the ACA, older people were charged on average 5 times more for health insurance than younger people.  Under the ACA, seniors (age 64 or older) cannot be charged more than 3 times the rate of a younger person’s plan (age 21-63). 

Tobacco Use:

A smoker can be charged 50% more than a non-smoker.  Why would you ever disclose whether you’re a smoker then?  You can potentially lie about this to avoid the higher cost, but if your health claims start looking like you are a smoker, you may have to deal with the ramifications.  Many insurance companies had already begun this extra penalty about 10-15 years ago.

If you don’t want to pay the extra cost and you aren’t brave enough to lie, you do have another option.  As long as you are enrolled in a smoking cessation class (you don’t even have to quit smoking), you should not have to pay a higher cost. 

Family Size:

This depends on factors such as your combined household income (the total of what each member of your family is expected to make in 2014), family members’ ages, and their smoking habits. 

Geographic Area: States are split up into different geographic regions to create smaller, competitive markets so that prices can be reasonable for each region instead of overpriced.  Pennsylvania is divided into 9 different regions.  

Side Note: Plans that were created before March 2010 and remained unchanged in the past few years are “grandfathered” into the ACA.  These plans do not have to charge according to these four factors.  Plans created after this date had to change to fit ACA criteria.  President Obama has been catching heat because of these “grandfathered” plans.

 

Subsidy

Most Americans should receive a tax subsidy with the purchase of their plans.  Any individual making less than $45, 960 and any family making less than $94, 200 is supposed to get some sort of compensation to help them pay for their plans.  You can use the Kaiser Foundation’s Subsidy Calculator to get an estimate on what you might receive. 

A Word of Caution: I am a little worried, though.  Before the Marketplace opened and plan prices were still unknown, I was able to get a subsidy estimate for a 25-year-old non-smoker who made $30,000/ year.  Now, if I enter the same information, the subsidy comes up as $0.  The calculator figures this based upon a silver level plan.   

I am hoping that there is a subsidy for the bronze level plan or that the calculator is inaccurate.  I am not sure how many more “lies” or problems with the ACA the American people will put up with.  

If you are truly curious, I suggest you call 1-800-318-2596.  I imagine someone will be able to tell you what your subsidy would be.