Will the Affordable Care Act Make Health Insurance Affordable?

[eridani]

The Commonwealth Fund
April 2011
Realizing Health Reform's Potential
Will the Affordable Care Act Make Health Insurance Affordable?
By Jonathan Gruber and Ian Perry

Abstract:

Using a budget-based approach to measuring affordability, this issue brief explores whether the subsidies available through the Affordable Care Act are enough to make health insurance affordable for low-income families. Drawing from the Consumer Expenditure Survey, the authors assess how much 'room' people have in their budget, after paying for other necessities, to pay for health care needs. The results show that an overwhelming majority of households have room in their budgets for the necessities, health insurance premiums, and moderate levels of out-of-pocket costs established by the Affordable Care Act. Fewer than 10 percent of families above the federal poverty level do not have the resources to pay for premiums and typical out-of-pocket costs, even with the subsidies provided by the health reform law. Affordability remains a concern for some families with high out-of-pocket spending, suggesting that this is the major risk to insurance affordability.

http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2011/Apr/1493_Gruber_will_affordable_care_act_make_hlt_ins_affordable_reform_brief_v2.pdf

Comment by Don McCanne of PNHP: News reports on this new Commonwealth Fund study have cheerytitles such as, "Health Reform Will Make Insurance Affordable for Nearly All Families." These titles should be extended to include, "... But Not Health Care."

Exhibit 3 noted above reveals that up to one-fourth of those with out-of-pocket costs at the 90th percentile level will not have enough money to pay for their necessities plus subsidized premiums plus subsidized out-of-pocket costs for their care. Even 2.5 percent of individuals with high incomes (over 500 percent of the poverty level - $111,750 for a family of four) will face financial hardship should they have greater health care needs.

Also of concern is that the assumption is made that all income beyond the necessities listed would be used for health care if financial hardship were to be avoided. Presumably that would mean no money for savings, for retirement, for higher education expenses, for vacations, for entertainment, nor for thousands of other preferences you might have for your spending. Is that the standard that we want to set? That we pay out what we need merely to exist and then almost everything else goes to pay for health health care if we need it?

Other exhibits in this report show that the outlook is worse for single individuals, for those living in states with a higher cost of living, and in the future it will be worse for everyone since affordability erodes further with the passage of time.

So what accounts for the cheery headlines? It is only subsidized health insurance that is affordable for most, but even there not all. Left out of the headlines is the fact that out-of-pocket expenses are not affordable for far too many.

Because the majority of people are healthy, the report concludes, "Fewer than 10 percent of families above the federal poverty level do not have the resources to pay for premiums and typical out-of-pocket costs, even with the subsidies provided by the health reform law." The celebration is for the 90 percent who may have some funds left after paying for necessities plus health care. But isn't the purpose of health insurance to take care of that 10 percent who face financial hardship in the face of health care needs? Or even the 2.5 percent who are wealthy and need health care but can't afford it?

A properly designed single payer system eliminates for everyone financial hardship due to health care costs. Premiums are not a problem because the entire health care system is funded through equitable tax policies. Out-of-pocket spending is not a problem because first dollar coverage applies to all essential health care services and products.

Let's all work to expose the deceptive rhetoric that the Patient Protection and Affordable Health Care Act has made health care affordable for almost everyone, when in fact, when you need health care, every last dime is squeezed out of you and that still isn't enough for up to one-fourth of us with significant health care needs. In the same breath, let's let the public know that there is a way we can do it - a single payer national health program.

My comment: Since 85% of the population will never get expensively sick, they'll be fine with 'reform;' it's only the 5% who account for half of all health care costs, and the 15% who account for 85% of all health care costs who are now totally fucked--forced to buy a product that will actually prevent them from getting health care.

[northoftheborder]

1. excellent analysis. need more of this. this system is NOT going to solve problems of cost.

[Jim Lane]

2. You didn't mention a point that makes the situation even worse.

The cheery language doesn't say that 90 percent of families will be OK (if they stop saving for retirement and the like). It says, "Fewer than 10 percent of families above the federal poverty level" will have a problem (emphasis added)

So the cheerfulness is achieved, in part, by the simple expedient of ignoring poor people.

[eridani]

3. The assumption is that people below the poverty level will be in Medicaid

Given the Repuke attacks on it, this is beginning to seem shaky.