We talked a little bit about what an exchange is and how they will be used for enrollment into a healthcare policy after Jan 1, when the main parts of the Affordable Care Act kick in. There’s two important differences between those policies to come on the exchanges and those available now at private insurance companies. The first, they’ll be required to cover a lot more than they do now. We’ll talk more about that in future articles. What I want to show here is an actual calculator that can estimate what you would pay for one of those future policies as a function of your income. There’s a huge money saver embedded in this.
If you open the Kaiser Family Foundation page here, you should land on a premium calculator asking for estimated income and other criteria. Let’s use one person, no children, 51 years-old, making only $12,000 a year. As a non smoker the total premium would be $5629, but the out of pocket premium paid by the insured would only be $240 a year or twenty bucks a month. Which equals 2% of household income and covers 4% of the overall premium
The ACA covers the rest of that $5629 with a tax credit. The tax credit is advance-able, which means the insurance company you choose gets it right away or files for it somehow, point being your premium is reduced to twenty bucks a month or $240/yr from the get go. Again, keep in mind the coverage here is good, this is a real policy with copays and no riders for lifetime caps or preexisting conditions. There is some mention of caps alright; but the cap is on how the max you have to pay out of pocket, a typical cap would be about $1500 – $5000/yr, you won’t pay more than that for the entire year no matter how many procedures or copays (And I think premium might count but not sure). So as best I can tell, you could be 51 years-old and diagnosed with raging cancer on Dec 31, go online Jan 1, and sign up for a real policy that will really cover your cancer and anything else, for 20 bucks a month, and even including copays and deducts you would not exceed roughly $2250 for the entire year.
But notice, if that 51 year-old smokes, their out of pocket portion rises to $3054, which equals 25.45% of household income and covers 36% of the overall premium of $8443. That’s still good compared to what’s out there now — considering what you would get for that premium it’s beyond good, it’s healthcare Unobtanium — but $251 a month might not be so affordable for that worker making 12k. A premium of $240/yr on the other hand, is quite affordable. People my age and many ages will sign up for that, I think, if they know where to go and what to do.
If the Kaiser tool is accurate, and if I’m using it and reading it correctly, the biggest money saver for low income workers to get real health insurance, by leaps and bounds, will be to stop using tobacco. Tell your friends.