ACA 2016 premium observations

Let'sgoflying!

Let'sgoflying!

Touchdown! Greaser!
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Dave Taylor
I was just looking at the numbers from a small business perspective and made two observations, have a look and tell me if you are seeing the same thing or not.
Here is the "SHOP" marketplace where a (<50 employee) business purchases plans for an employee:
Employers
First thing I notice is the premium increase for employees as they age. Ie 50% from age 25 to 45.
Hate to suggest it, but I feel I have a grip on how employers think - and there will be some that will (or will have to) consider this when hiring. (Many small businesses are constantly on the edge of failure, any additional expense has to be avoided.)

Employees
I ran a few of my employees and the premium difference between me paying through SHOP above and them buying the same thing themselves is as much as 6x.
I read where employers are not supposed to bump up wages in order to encourage employees to buy their own but it seems like they are encouraging this (without any way to monitor and prevent it).

(a request to take your political observations on this topic elsewhere)
 
Yes, Kevin.
I ran one employee on both and it was 335/mo for me to buy something the employee would purchase for 58/mo with their 'rebate'.
Dave
 
Obama care... Is anyone surprised? Really?
 
Let'sgoflying! said:
please refrain, this is about the premiums.
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It is but the effect and the disdain go hand in hand...almost impossible to separate for many.

Does the employee qualify for subsidies?
Is there a repayment come tax refund time?

I have been buying the top of the line UHC plan for our employees for about 14 years...two deaths after two-three week hospital stays, broke bones, open heart surgeries, kidney stones...multitudes of other medical issues...hard to abandon for any reason...
 
Let'sgoflying! said:
Yes, Kevin.
I ran one employee on both and it was 335/mo for me to buy something the employee would purchase for 58/mo with their 'rebate'.
Dave
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It depends on what is being assumed for the allowable rebate. The amount of the subsidy varies greatly. Not enough data here.
 
Kelvin said:
It is but the effect and the disdain go hand in hand...almost impossible to separate for many.
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It would be nice if we could separate them here, as per the OPs request. Pretty good job so far, with the one exception.
 
Everskyward said:
If you mean the exception; yes I was.
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Yes ma'am. I did.

These threads about the AHCA seem to always produce for me a new perspective and I often learn something that is useful.

The subsidy payback is something that I have yet to wrap my mind around.
 
Kelvin said:
Yes ma'am. I did.

These threads about the AHCA seem to always produce for me a new perspective and I often learn something that is useful.

The subsidy payback is something that I have yet to wrap my mind around.
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I am also interested from the standpoint that I may be buying my own insurance sometime in the future. I don't think I want to work all the way to medicare age.
 
As an employer who has purchased health insurance for all employees for 15 years, my observation is that the system which has been created has ensured that premiums would increase to the extent that a very large proportion of people who could, in the past, have afforded a sound and valuable health insurance policy now must rely upon a subsidy to buy insurance (often poorer coverage); and the cost to buy insurance for my employees has escalated to a staggering degree.

One wonders how beneficial to the process the creation of a huge and costly bureaucracy is to the process.

More than this I cannot say.
 
Kelvin said:
The subsidy payback is something that I have yet to wrap my mind around.
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Karen and I will likely bump up against that this year.

In retirement and on fixed income, Karen qualified for a substantial subsidy. It lowers her monthly premium from about $400 to about $240.

But...

This year we had an unexpected windfall, which will put our annual income well above the estimated amount. So it's likely we may have to pay back some of that subsidy. Which, I suppose, is only fair.

But things like this can affect financial decisions. One might wish to take gains on an investment - maybe even to buy a plane - but has to take the effects of that gain on annual income into account, beyond the 15% capital gains tax. And taxation that discourages liquidity in investments may yield unintended consequences.
 
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If you have to payback too much of the subsidy, there is a penalty, it was waved last year.
 
Everskyward said:
It would be nice if we could separate them here, as per the OPs request. Pretty good job so far, with the one exception.
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Makes it challenging to discuss the issue when you must refer to the Problem-That-Shall-Not-Be-Named that causes the entire issue in the first place.
 
Everskyward said:
Can you apply for a refund if you make less than you predicted?
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It does not work that way; it is not as if you paid too much - you simply paid more (or all) of the premium, rather than receiving money back from the fedgov by way of subsidies at purchase time.

The fact that the subsidized premiums are, in most cases, higher than the unsubsidized premiums were, with less (in most instances) coverage is a not entirely unexpected result of remanding control over the process to a large and inefficient bureaucracy.

No claim that issues did not exist - they did - but expecting a large, costly and unaccountable government agency's intervention to help is not an entirely rational act. It seems likely that the plan's effects, to the extent they could have been known at the time of passage, we're not really understood.
 
Suppose an employer says "I can't afford group insurance, but if you sign up for an ACA bronze plan I'll reimburse your for the post-subsidy cost".

Would that be legal?

Or could this hypothetical employer fund health savings accounts for his employees that would cover most of the costs of a typical ACA bronze plan?
 
SCCutler said:
It does not work that way; it is not as if you paid too much - you simply paid more (or all) of the premium, rather than receiving money back from the fedgov by way of subsidies at purchase time.

The fact that the subsidized premiums are, in most cases, higher than the unsubsidized premiums were, with less (in most instances) coverage is a not entirely unexpected result of remanding control over the process to a large and inefficient bureaucracy.

No claim that issues did not exist - they did - but expecting a large, costly and unaccountable government agency's intervention to help is not an entirely rational act. It seems likely that the plan's effects, to the extent they could have been known at the time of passage, we're not really understood.
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I'll take that as a 'no'. :)

It's a moot point for me because I highly doubt I would qualify for any subsidy even without a job. I was just wondering what would happen if I had a particularly bad investment income year.
 
FastEddieB said:
Karen and I will likely bump up against that this year.

In retirement and on fixed income, Karen qualified for a substantial subsidy. It lowers her monthly premium from about $400 to about $240.

But...

This year we had an unexpected windfall, which will put our annual income well above the estimated amount. So it's likely we may have to pay back some of that subsidy. Which, I suppose, is only fair.

But things like this can affect financial decisions. One might wish to take gains on an investment - maybe even to buy a plane - but has to take the effects of that gain on annual income into account, beyond the 15% capital gains tax. And taxation that discourages liquidity in investments may yield unintended consequences.
Click to expand...

If the windfall was recent, you may be able to call your state's marketplace and terminate the subsidy going forward, which will if nothing else reduce any penalties.

Rich
 
JeffDG said:
Makes it challenging to discuss the issue when you must refer to the Problem-That-Shall-Not-Be-Named that causes the entire issue in the first place.
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That healthcare is a for-profit business with insurers trying to maximize their profits at the insureds' expense?
 
Flying Viking said:
That healthcare is a for-profit business with insurers trying to maximize their profits at the insureds' expense?
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No longer possible. Insurers have had their non-benefits spending capped by the Cause-That-Shall-Not-Be-Named.
 
JeffDG said:
No longer possible. Insurers have had their non-benefits spending capped by the Cause-That-Shall-Not-Be-Named.
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Good try. The problem is everything is for profit -- the care, the drugs etc. Prices go up, premiums go up and profits go up, but the non-benefit ratio stays the same. And the consumer gets screwed.

And the medical benefit ratio does not affect how insurance companies really make their money -- returns on investments.
 
Flying Viking said:
That healthcare is a for-profit business with insurers trying to maximize their profits at the insureds' expense?
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Since they were at the table whispering in ears of "our" representatives in DC, I wouldn't doubt it.
 
It appears that the ACA is going to drive massive consolidation in the health insurance space, since there is so little profit left anymore. I expect we are asymptotically approaching the single payer utopia.
 
Here are a couple of numbers to compare tax credits at the following income levels:

$63,700
$64,000
$65,000
$96,500
$97,000
 
In two years, the premium for my wife + child has risen 80%
 
Flying Viking said:
Good try. The problem is everything is for profit -- the care, the drugs etc. Prices go up, premiums go up and profits go up, but the non-benefit ratio stays the same. And the consumer gets screwed.

And the medical benefit ratio does not affect how insurance companies really make their money -- returns on investments.
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Yes, but that has always been the case. When You Know What was enacted, it exposed more of the cost of medical care, something I think people vaguely knew but didn't think about, like child slaves making chocolate. The high premiums are just a glaring example of the bigger problem of medicine as a business.
 
OBAMACARE, OBAMACARE, OBAMACARE, for crying out loud. There is a problem but don't discuss who caused the problem because it might affect the sensibilities of the people who voted the problem causer into office? Screw that politically correct BS. It's OBAMACARE, it was purposely designed to put the pain off until OBAMA is out of office and it's a disaster. Who do you suppose those "subsidies" are funded by?
 
Let'sgoflying! said:
Yes, Kevin.

I ran one employee on both and it was 335/mo for me to buy something the employee would purchase for 58/mo with their 'rebate'.

Dave
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You need to also figure I your employer tax credit on premiums you pay.

Will change your math, dramatically.
 
PaulS said:
OBAMACARE, OBAMACARE, OBAMACARE, for crying out loud. There is a problem but don't discuss who caused the problem because it might affect the sensibilities of the people who voted the problem causer into office? Screw that politically correct BS. It's OBAMACARE, it was purposely designed to put the pain off until OBAMA is out of office and it's a disaster. Who do you suppose those "subsidies" are funded by?
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ooooooooooooh, now you've done it....
 
Meh.

There's no need to call it by name, and it was (after all) passed by congress, our elected representatives.

The point is, we can discuss its effects and leave the whys and wherefores for another venue.
 
It ultimately all comes down to a total benefits package. I make $X, plus I get Y% additionally given to my 401k, plus Z benefits.

It ultimately all adds up to $$$ for my employer. If I was compensated higher, then I would be fine with not getting those additional perks since I could afford them myself.

I expect to see more employers ceasing providing insurance and telling employees "Go buy your own."
 
Ted DuPuis said:
It ultimately all comes down to a total benefits package. I make $X, plus I get Y% additionally given to my 401k, plus Z benefits.

It ultimately all adds up to $$$ for my employer. If I was compensated higher, then I would be fine with not getting those additional perks since I could afford them myself.

I expect to see more employers ceasing providing insurance and telling employees "Go buy your own."
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Under the law, for employees of decent size, not really an option, as the law mandates that they buy qualified coverage. Of course, if they do not, they are assessed a penalty (after-tax dollars, not a deduction). Couple grand, IIRC (per employee).

One company I know very well spent (past year) just over $300k on health insurance; they could have chosen to not buy the coverage and paid a penalty of around $115k. Had they done that, the employees would have been obligated to buy insurance themselves, or they (too) are penalized by the FedGov. In that company, not a single person was qualified for a subsidy.

If you look at the numbers, it is difficult not to conclude that the system was not engineered to fail.
 
SCCutler said:
Meh.

There's no need to call it by name, and it was (after all) passed by congress, our elected representatives.

The point is, we can discuss its effects and leave the whys and wherefores for another venue.
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Can we discuss why we don't like the effects? Or what we think should be done instead?
 
bflynn said:
Can we discuss why we don't like the effects? Or what we think should be done instead?
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Sure. Move to a European style system or else put in regs/incentives to bring costs down to more affordable levels in the first place. This looked at the problem as "not enough people have insurance" instead of "insurance/healthcare is too expensive." The latter is the real problem.
 
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