ACA: Rising Premiums or Changing Marketplace?
All week, Republican members of Congress and television talking heads have been up in arms over Barack Obama’s broken promise to let everyone keep their health plan and prevent a rise in healthcare premiums. In reality, both sides are playing semantics and putting plenty of spin on the issue.
First, Barack Obama’s promise to let everyone keep their health plan. The problem with the wording is that such a promise was impossible to keep for “everyone.” Under the new law, health plans have to provide a certain amount of minimal coverage. These plans can no longer discriminate against people with pre-existing conditions and have to provide more coverage than the bare-minimum plans of the past used to. As such, those plans no longer exist, but only because they didn’t provide enough coverage to qualify as a health plan under the new law. Otherwise, everyone that had significant health coverage before can keep their plan.
Then there is the question of rising premiums. Many people, especially young and healthy ones, would purchase the bare minimum health plan. Since those plans no longer exist, young adults and individuals who aren’t covered by employer-provided coverage will need to get a new plan that meets the minimal government standards. In other words, it’s hard to compare the price of a person’s existing plan to one they have to get because those plans are completely different. It’s like having to buy a car to replace your bike and being surprised it’s a lot more expensive than the old mode of transportation.
More so, the Republicans are playing it fast and loose with the word “premium”. It’s true that a lot of premiums outside of those for young adults will rise but the cost to the consumer will remain the same or lower because of the government subsidies included in the ACA. Any individual earning under $45,000 per year is eligible for government-subsidized healthcare. The cost of insurance is capped at 3 percent of income for households 133 percent above the poverty line, 4 percent for households 150 percent above the poverty line, 6.3 percent at 200 percent, 8.05 percent at 250 percent, and 9.5 percent at 300 to 400 percent. The rest would be subsidized by the government through tax credits meaning the cost of your premium is not the final cost of the plan.