Federal health reform was designed to make coverage affordable for all, but for many low-income people struggling from paycheck to paycheck, the Affordable Care Act is anything but affordable and is burdening people with one more bill they can't afford, Michael Ollove reports for Stateline. Sireesha Manne, a staff attorney at the New Mexico Center on Law and Poverty, told Ollove, "For those with very low wages trying to raise kids, after paying for
housing, electricity, food, transportation and child care, asking
people to pay another $50 or $100 a month, that’s just out of reach."
The authors of the act anticipated this, so "The law allows states to create a separate insurance program, called the Basic Health Program, for people who earn too much to qualify for Medicaid and too little to afford insurance on the state exchanges, even with federal aid," Ollove writes. "Under such a plan, the federal government will give the subsidies directly to the states, instead of to individuals and families. The states are supposed to pool the money and then use the financial leverage to push insurers to offer less expensive coverage. A number of states are eager to create such programs, but they can’t until the Obama administration issues the regulations that will govern them."
There's fear the states won't be able to launch the programs until 2016, which means that people not eligible for Medicaid will have to survive on the financial assistance available under the current plans, Ollove writes. Those plans are based on family income and the federal poverty level. "According to the ACA, a family of three whose annual income is at 133 percent of the federal poverty level (an annual income of $24,352), should have to pay no more than 3 percent of their household income in annual premiums, or $731. In that case, the federal government would pay the insurance company the difference between $731 and the actual premium. The percentage an individual or family is expected to pay rises at higher income levels, up to 400 percent of poverty. At that income level, paying up to 9.5 percent of household income on health insurance is considered affordable. So, a family of three making $73,240 would receive a subsidy to cover premium amounts above $6,958."
That still leaves the term "affordable" up for interpretation. Sherry Glied, dean of New York University’s Robert F. Wagner Graduate School of Public Service, told Ollove, “What it means for something to be affordable or not affordable is totally debatable. It isn’t like there’s a fixed definition of affordability.” That has Manne predicting "that policymakers will be hearing about legions of Americans who still can’t afford health care—no matter the title of the Affordable Care Act." (Read more)
The authors of the act anticipated this, so "The law allows states to create a separate insurance program, called the Basic Health Program, for people who earn too much to qualify for Medicaid and too little to afford insurance on the state exchanges, even with federal aid," Ollove writes. "Under such a plan, the federal government will give the subsidies directly to the states, instead of to individuals and families. The states are supposed to pool the money and then use the financial leverage to push insurers to offer less expensive coverage. A number of states are eager to create such programs, but they can’t until the Obama administration issues the regulations that will govern them."
There's fear the states won't be able to launch the programs until 2016, which means that people not eligible for Medicaid will have to survive on the financial assistance available under the current plans, Ollove writes. Those plans are based on family income and the federal poverty level. "According to the ACA, a family of three whose annual income is at 133 percent of the federal poverty level (an annual income of $24,352), should have to pay no more than 3 percent of their household income in annual premiums, or $731. In that case, the federal government would pay the insurance company the difference between $731 and the actual premium. The percentage an individual or family is expected to pay rises at higher income levels, up to 400 percent of poverty. At that income level, paying up to 9.5 percent of household income on health insurance is considered affordable. So, a family of three making $73,240 would receive a subsidy to cover premium amounts above $6,958."
That still leaves the term "affordable" up for interpretation. Sherry Glied, dean of New York University’s Robert F. Wagner Graduate School of Public Service, told Ollove, “What it means for something to be affordable or not affordable is totally debatable. It isn’t like there’s a fixed definition of affordability.” That has Manne predicting "that policymakers will be hearing about legions of Americans who still can’t afford health care—no matter the title of the Affordable Care Act." (Read more)
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