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Study: Half of Self-Insured Americans Qualify for Aid

Health Human Services Secretary Kathleen Sebelius Affordable Care Act health care obamacare barack obama
Bill Clark/Roll Call via Getty ImagesHealth and Human Services Secretary Kathleen Sebelius.
By RICARDO ALONSO-ZALDIVAR

WASHINGTON -- About half the people who now buy their own health insurance -- and potentially would face higher premiums next year under President Barack Obama's health care law -- would qualify for federal tax credits to offset rate shock, according to a new private study.

Many other people, however, earn too much money to be eligible for help, and could end up paying more.

The estimate, released Wednesday by the nonpartisan Kaiser Family Foundation, tries to answer one of the biggest remaining questions about the impact of Obama's law on American families: Will consumers wince -- or even balk -- when they see the premiums for the new plans?

The study found that 48 percent of families currently buying their own coverage would be eligible for tax credits next year, averaging $5,548 per family, or 66 percent of the average cost of a benchmark "silver" policy offered through new state insurance markets.

"About half of the people won't be paying the sticker price," said Gary Claxton, director of the health care marketplace project at Kaiser, an information clearinghouse on the health care system. "The people who get help will get quite a lot of help."

"Many, but certainly not all, of the people who don't get tax credits will pay more," he said. "How much more will be a function of a lot of different things."

For example, some people who don't qualify for tax credits may get jobs that offer coverage, added Claxton, a co-author of the study. And the bottom line on premiums may not be clear until sometime this fall, after the Health and Human Services Department releases rates for more than 30 states where the federal government is taking the lead setting up new insurance markets for individuals and small businesses.

People can enroll starting Oct. 1, and coverage becomes effective Jan. 1. Most people currently covered by employer plans aren't affected.

The law is likely to increase the sticker price for individually purchased coverage next year for several reasons:
  • Insurers will have to cover people with pre-existing medical conditions, whose needs are costlier to provide for.
  • Policies must provide certain standard benefits, including prescription drugs, mental health and substance abuse treatment and rehabilitative services.
  • Policyholders' annual out-of-pocket costs will be capped.
So far, premiums reported by a number of individual states have been coming in lower than initially projected by the Congressional Budget Office. But they are higher -- according to industry and consultants -- than what people now typically pay for individual plans, which tend to be bare-bones coverage.

However, the law also will pump in billions of dollars in federal tax credits to help the uninsured pay premiums -- and ease cost increases for many who are currently buying the skimpy individual policies. The money will go directly to the insurance plan, and policyholders will pay the difference -- a discounted sticker price, in effect.

The tax credits, available on a sliding scale based on family income, will be offered to people who don't have access to affordable coverage through their jobs and buy policies through the new state markets.

Those making between 100-400 percent of the federal poverty level -- between $11,500 and $46,000 for an individual and $23,550 and $94,200 for a family of four -- are eligible for some level of help. Families on the low end of the scale will pay 2 percent of their income for a benchmark plan, while those on the upper end will pay 9.5 percent.

It's expected that a clear majority of customers in the new markets will be eligible for tax credits. That's because the pool will also include uninsured people, who tend to have lower incomes than those who can currently afford to buy their own coverage. The share will vary from state to state.

HHS Secretary Kathleen Sebelius recently estimated that in Texas, as many as 9 in 10 people buying coverage in the new market will get a break on costs.

People with individual coverage they buy themselves represent a small sliver of those with private insurance, only about 5-6 percent. That's expected to grow significantly under Obama's law, which will require most uninsured Americans to get coverage.

Estimates of the number of people who currently have individual coverage range as high as 19 million, but Claxton said the Kaiser study used a smaller estimate of about 10 million. It's based on an ongoing government survey that some researchers regard as more accurate.



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7 Comments

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reefparts

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Not sure where they get these numbers? Our company pays $1,800 a month per family for five families. Our agent told us yesterday we will be getting 24% increase next June. Even at the old numbers. How can a small business continue to pay $20,000 a year for insurance per employee? They will all be getting raises and we will get rid of our insurance. They can go to the exchange and get a subsidy. If company pays any of premium directly they will not qualify for a subsidy. Sounds like the plan is a good deal for business?

September 20 2013 at 11:07 AM Report abuse rate up rate down Reply
setanta54s_back

DOA


DEFUND OBAMACARE ALLIANCE


http://doa-defundobamacarealliance.blogspot.com/


THIS IS FOR REAL
so please PASS IT ALL AROUND


GET THIS OUT
and
KEEP IT MOVING




~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

August 25 2013 at 10:23 AM Report abuse rate up rate down Reply
Big John

Unless you are paying for your own health insurance and are depending on your employer to subsidize your cost you have not got a clue how expensive a health care plan is in this country. If you think the old way of doing business with health care is just fine you are very much misinformed or have never been unemployed with no heath insurance. This countries health care system is BROKEN and unless the GOP has a better idea just repealing the affordable health care act is totally stupid and just playing into the hands of their insurance masters.

August 16 2013 at 4:07 PM Report abuse +1 rate up rate down Reply
1 reply to Big John's comment
setanta54s_back

spare us all big boy
and STOP REGURGITATING THEIR LIES as you KNOW THEY ARE LIES.............so it's DELIBERATE
THAT YOU REPEAT THEM.

o'bummer care's a FARCE and in no way,shape or form WAS INTENDED TO BE COST EFFECTIVE
or
COST LESS than WHAT ALREADY IS OUT HERE.

so NOW ALL NOT ILLEGALS OR MUSLIMS or certain UNION MEMBERS
ARE FORCED INTO THIS SHEISS.

wanna see BROKEN ?
LM@O and WILL WALK INTO EVERY LOCAL doctor's office and give a SHOUT OUT in the standing room only WAITING AREAS--
yo kornkobs ! y'all GOT EXACTLY WHAT U WANTED !
health care reform resulting in HELL CARE.

fine me.

as I REFUSE TO SUBMIT.

August 25 2013 at 10:29 AM Report abuse rate up rate down Reply
chris1011

The Republicans don't have a plan, none, nada. Even Newt Gingrich admitted that today.

I notice that the infamous Ryan Plan has never re-surfaced again...and it has little to do with the Democrats. The GOP quietly held the Ryan Healthcare reform under water until it was quietly & permanently drowned.

They know full well, that even with perfectly safe gerrymandered districts, the Ryan plan would be anathema to all those Older Working Voters. Remember, the Ryan Plan basically told every working adult over 45: Tough Cookies for you if you're sick and don't have GOOD Job supplied Healthcare but Medicare will no longer be there for you because me and my fellow Lawmakers who will always HAVE red-carpet Healthcare have decided that you can't afford it.

August 15 2013 at 1:15 PM Report abuse +2 rate up rate down Reply
1 reply to chris1011's comment
betty_brock

The Dumbercraps have a BAD plan.

August 15 2013 at 8:41 PM Report abuse -1 rate up rate down Reply
1 reply to betty_brock's comment
betty_brock

Commie much chris?

August 15 2013 at 8:42 PM Report abuse -2 rate up rate down
sandi

"silver" policy ~$8400; Fam of 4 making $40,000 pays out ~ 2% or $800 then is sub'ed $7600 ? the policy has about a $2000 deduct. so can mean $3000 a year for healthcare. Prior they went to free clinic or emer. for $0

August 14 2013 at 4:01 PM Report abuse rate up rate down Reply
1 reply to sandi's comment
chris1011

You don't get care at the ER. You get stabilized and sent home. There is no free care at the ER. They bind your wounds and that is it. They will not admit you for further care. The only fair way is for everyone to have health insurance, take personal responsibility and not rely on others to pay for them. This was the original idea of the conservative Heritage Foundation plan.

August 15 2013 at 12:31 PM Report abuse rate up rate down Reply