Obamacare: The Un-Affordable Care Act

The Affordable Care Act may be anything but Affordable to many Americans if Sarah Kliff of the Washington Post is correct. Recent regulations have interpreted the Act, better known as Obamacare, to measure affordability without taking into consideration whether individuals have families that also need health care.

While health care analysts have been talking about this “glitch” in Obamacare for months, Kliff does a superb job of explaining the conundrum this Obamacare glitch has created for the Obama Administration.

We know that the health reform law requires “affordable” insurance to cost less than 9.5 percent of a worker’s household income. But here’s a crucial detail it left out: What counts as the “premium”? Is it the cost of providing insurance for just the employee, or for the workers’ entire family? There’s a huge difference between the two: the average premium for an individual last year was $921 per year, compared to the average $4,129 for a family policy, according to the Kaiser Family Foundation. In other words, health insurance premiums of $4,129 send a company past the affordability target a lot faster than just providing an individual policy would.

This has huge implications for the health reform law. If the Obama administration went, for example, with the wider, family-coverage based definition, many more Americans would not have an affordable offer of insurance. And that would make them eligible for federally-subsidized health insurance. Richard Burkehauser, an economist at Cornell, ran the numbers and estimated that, under a family-coverage based definition, the federal government would be on the hook for $48 billion more in subsidy payments. His study this summer generated a slew of headlines charging that the health reform law would cost $50 billion more than originally thought.[1]

So, faced with the choice of $50 billion of cost overruns, the Obama Administration chose to disregard family health insurance needs when determining whether it’s affordable.

Where was that on the nightly news?!

We agree with Sarah Kliff, “[R]egulation is where a lot of the action is at in health reform, where key decisions are being made to determine how the overhaul moves forward.”[2]

The fight against Obamacare is not over. This is why ObamacareWatcher.org was created--to help you track and comment on Obamacare regulations.