The Forgotten ACA Goal: Affordable Health Care

One of the greatest ironies about the Affordable Care Act was that it whiffed on providing affordable health care. Any idiot can expand Medicaid without paying for it. It takes a savvy group of politicians to bend the cost curve in a sustainable way. The key to sustainability was to focus on the unsubsidized health insurance cost.

The Hidden Health Insurance Goal

The Affordable Care Act supporters did believe in the importance of affordable health care. In fact, they had a very specific goal for affordable health insurance. When you go to it says that if the lowest cost Bronze-level plan available to you through the Marketplace is more than 8.13% of your household income then your health insurance is unaffordable. This implies that since the Marketplace subsidies cease at 400% of the federal poverty limit(FPL), the lowest cost Bronze-level plan should cost no more than 8.13% of the 400% FPL. As an example for a two person household, the lowest Bronze-level plan should cost no more than .0813 times $64,080 or $5,209.70 per year. This rate is not unreasonable. A couple of years ago my grandfathered health insurance plan cost that much.

Affordable Health Insurance For The Middle Class Means Affordable Health Insurance For Everyone

My Health Inflation

My Health Inflation

As a healthy family who not filed an insurance claim in twenty years, I find it exceeding odd that I cannot find affordable health insurance. As an example when I priced health insurance in the Marketplace last October, the lowest cost Bronze-level plan would cost me $12,696 per year. Even my grandfathered health insurance plan exceeds the 8.13% limit. The cost control performance of the Affordable Care Act remind me of the Zig Ziglar quote,

You hit what you aim at, and if you aim at nothing you will hit it every time.

The canary in the coal mine is those healthy people purchasing unsubsidized health insurance and yet this is the group that is most likely to be taken advantage of. When I look at five years of 13% increases in my health insurance premium, I feel like my insurance company took advantage of my situation. When I look at the $12,696 premium from the Marketplace, I feel like the government and the insurance companies conspired to take advantage of my situation. The Urban Institute has offered some ideas on fixing the Affordable Care Act such as a premium cap at 8.50% of income and an individual mandate modeled after Medicare. The premium cap at 8.50% of all income is a step in the right direction but I prefer 8.13% of the 400% FPL. Since I do not think the Affordable Care Act supporters and insurance companies have been honest with me over the last five years, I think the only way we can keep these folks honest is to have no mandate. Frankly, I have not found any Medicare participants who like their mandate so why push this headache on the rest of the population? The most pragmatic solution for me is to self-insure even though healthy, unsubsidized people are the foundation that allows us to offer affordable health insurance to everyone.  If the Affordable Care Act had any redeeming value to the middle class, I do not see it in this graph. We did not get more affordable health care.

Life expectancy vs. health expenditure over time, 1970-2014