Friday, January 31, 2014

Bette in Spokane has some genuine pain (probably. Or maybe not...see updates)

[multiple updates, through 2/3/14]

Yes, the brief "ACA victim" story that Rep. Kathy McMorris Rodgers (R-Wa) inserted in her response to the State of the Union address was cherry-picked and misleading. The pain that the ACA inflicted on the couple in question was exaggerated. But it was probably real. They are in the relatively small subset of Americans who may fare worse under the ACA than under the pre-ACA status quo.

Here is the tale that Rodgers told:
Not long ago I got a letter from Bette in Spokane, who hoped the President’s health care law would save her money – but found out instead that her premiums were going up nearly $700 a month.
Reporter David Wasson of the Spokesman-Review tracked Bette down and learned that she is hostile to the ACA ("I wouldn't go on that Obama website at all") and did not check out her options on the exchange. The $700 difference was between the plan she and her husband carried in 2013 and the plan their insurance company offered in replacement. Here are the basics:

She said she contacted the congresswoman late last year to complain after getting a letter from Asuris Northwest advising that her $552-a-month policy no longer would be offered. She sent the congresswoman’s office a copy of the letter, which included the rate quotes for the suggested replacement policies.

Although the couple’s catastrophic plan had a $10,000 deductible, it included four doctor visits per year at no additional out-of-pocket cost, she said.
The insurer pitched a $1,200 per month plan with a lower deductible and also offered a $1052/month option. What's available on the Washington Healthplanfinder, the state's ACA exchange?

Bette, identified by Wasson as Bette Grenier, is 58 and married. She and her husband own a roofing company. They are probably ineligible for subsidies, i.e., earning more than $62,040. If her husband is also in his upper 50s - let's say 59 -- they will each pay 2.5 times more than adults in the youngest age band. Since subsidies are designed to ensure that a household will not spend above a fixed percentage of its income on premiums, and premiums are much higher for older people, they stand to lose far more than young adults if they're over the subsidy line.

The cheapest plan available to Bette and her husband on the exchange, if I'm roughly right about the husband's age and about their ineligibility for subsidies, is a bronze plan with a $6,000 per-person deductible, costing $718 per month.  That deductible is higher than that of their 2013 plan if the $10k deductible on that plan was not per-person. The bronze plan has the highest out-of-pocket (OOP) maximum allowable under the ACA, $12,700 for the couple (their prior plan may or may not have had a higher OOP maximum). There are no benefits whatsoever that kick before the deductible. Coinsurance is 40%. Frankly, this plan sucks.

The cheapest silver plan will cost the couple $946 per month.  The per-person deductible is $1750; the OOP maximum is the maximum allowable. Doctor's visits are $40 for primary care and $60 for specialists, prior to the deductible.

All ACA plans offer a free annual checkup and a broad range of free screenings.  And this self-employed couple can deduct the full cost of their health insurance from their income, as they could before full ACA implementation.   That's a 15% discount if their income is under $73,801, a 25% discount if their income is over that threshold but under $148,850, and could be as high as 39.6% if they're in the 1%, which seems unlikely.

Still, this couple's options are not good. Healthy older adults with incomes over 400% FPL who do not have access to employer-sponsored insurance are the ACA's losers. Can't really sugar-coat that.

P.S. It occurred to me, on a little dog-walking break, that I should not assume out of hand that the Greniers' income is more than 400% FPL.  If their income is $62k, that cheapest silver plan will cost them just $389 per month, and the bronze, $161. But my guess remains that they are over the line, given this tidbit from Wasson's story:
“I know some people seem to be getting good deals, but we’re not,” Grenier said. “I have a friend – she and I fight about this stuff all the time – and she got a great deal: $129 a month.”
That suggests some awareness of the subsidy stakes. One final caveat: if the Greniers are close to the line, being self-employed, they can throw a little extra into their individual retirement account or IRAs and get under. They have until April 15. And of course, whether this particular couple is over or under the subsidy line does not really matter from a policy standpoint. That subsidy cliff is too steep.

Update 2: The Coburn-Burr-Hatch repeal & replace plan would cut the subsidy threshold down to 300% FPL and increase the allowable ratio of age-based premium difference to 5-to-1. That would create a lot more Bettes -- though the plan's authors would claim that premiums would be lower on average because minimum required benefits would be reduced.

Update 3: William Ocasio protests: "We can't conclude Bette's losses were real. We don't know her income, we don't even know what her prior insurance covered." It's rue that I didn't consider what might have been excluded from the couple's 2013 plan.

Update 4: This Kos post indicates that Bette Grenier's husband is on disability and that their roofing business has fallen on at least somewhat hard, which may suggest that the couple is indeed subsidy-eligible. Mr. Grenier should also be eligible for Medicare if he's on disability, though I believe that there's a two-year waiting period before Medicare kicks in.

Two bottom lines: as William Ocasio suggests, " Cathy McMorris Rodgers did more than cherry-picked, she did no fact finding of Bette's story." Conversely, regardless of the Greniers' full story, the ACA's losers are concentrated among healthy, 50-to-60-something self-employed people.

UPDATE 5: I emailed David Wasson of the Spokesman-Review to ask whether there was any indication whether the Greniers qualified for ACA subsidies. Here's his response "in pertinent part," as the lawyers say:
She’s 58 and I seem to recall her saying her husband is 60.
   She told me they don’t qualify for subsidies – but that probably was based on their annual earnings in 2012 since it was last fall that they were dealing with the sticker shock of being told they no longer could get a catastrophic-only policy.
   She indicated that 2013 was a tough year for their roofing company but didn’t elaborate.
Update 6: Timothy Eagan provides some important perspective on  Rodgers' district, where unemployment is high and income is low:
And yet, in her district, people are flocking to Obamacare — well beyond the national average. Though she has been screening town hall meetings to highlight only critics of the new law, her constituents are doing something entirely different in making their personal health decisions.

In Spokane County, the most populous in the Fifth Congressional District with nearly half a million people, the rate of participation in the new health care law is even well above the state average. At the end of December, signups were 102 percent of the state target. That’s saying something, because Washington, with a big range of insurance choices and a well-run exchange, has been one of the nation’s success stories for the Affordable Care Act.

Ignoring what her own neighbors are doing, McMorris Rodgers said on Tuesday that new health care law “is not working.” But if that’s the case, why have nearly one in 12 people in her home county signed up for expanded Medicaid coverage or new private health insurance? It could be, as the state noted, because the average time it takes a poor person to apply for health care here has now been cut from 45 days to 45 minutes.
 Update 7: Paul Krugman is right about a lot of stuff. But he really needs to pay closer attention to what's on offer in the ACA. He writes, re Bette:
Even more important, all Ms. Grenier and her husband had before was a minimalist insurance plan, with a $10,000 deductible, offering very little financial protection. So yes, the new law requires that they spend more, but they would get far better coverage in return.
As noted above, the cheapest bronze plan available to the Greniers, costing $166 more per month than the plan they had (if they are in fact unsubsidized0, has a two-person deductible of $12,000.  The average bronze plan on the exchanges has a per-person deductible of $5,000, apparently the same as what the Greniers were paying. Their coverage may have had other gaps or may have changed without the ACA, e.g., as Mr. Grenier hit a new age band. But it's certainly not obvious that the ACA offered "much better coverage" for their money.

1 comment:

  1. When Krugman says "far better coverage," might he also be including the fact that ACA eliminates the possibility that the Greniers would just be cut loose at some point and made uninsurable, as was possible under the old rules that governed their previous policy?