Thursday, March 28, 2013

Obamacare or Glitch-o-care? All Schemes Unravel, Just Some Faster Than Others

The tax credits are geared toward low and middle-income Americans who do not have access to affordable health insurance coverage through an employer. The law specifies that employer-sponsored insurance is affordable so long as a worker's share of the premium does not exceed 9.5 percent of the worker's household income.

In its rule making, or final interpretation of the law, the IRS said affordability should be based strictly on individual coverage costs, however.

That means that, even if family coverage through an employer-based plan far exceeds the 9.5 percent cutoff, workers would not be eligible for the tax credits to help buy insurance for children or non-working dependents." - Little hope seen for millions priced out of health overhaul, Reuters, 03/26/2013


Before this IRS ruling, if employee paid/responsibility/share of a group plan premium exceeded 9.5% of one's household income, one could then go to the exchange, price a policy, and receive assistance via subsidy.

Now, you can go to the exchange, but assistance is only for the employee not dependents. For example, the bronze plan is price X for the employee but X+3 for family coverage e.g. a spouse and two children. You received assistance on the X+3 premium before the ruling. After the ruling you receive assistance on X but not the +3.

The assistance is on a sliding scale depending on family income up to 400% of the poverty level i.e. $88.2k for a family of four. There is "twin" assistance: on the premium side AND the deductible/co-insurance side i.e. depending on income, one receives assistance lowering your out-of-pocket expense e.g. deductible and co-insurance equals X, your income is Y, X is then reduced to X - 1.

Link to the Reuters article appears below:

Update 04/07/2013: It's time to delay Obamacare, James Capretta and Yuval Levin, AEI, 04/04/2013

No comments:

Post a Comment