We’ve frequently warned that Obamacare is locked in an inescapable death spiral that will result in its inevitable failure. The problem is that the folks who make too much to qualify for subsidies (currently defined as roughly $80,000 for a family of 3) are increasingly being priced out of the market for individual insurance by Obamacare’s 30%+ price hikes that consistently come year after year. Meanwhile, those “rich” families making $80,000 a year are the ones expected to overpay for their health insurance so that a portion of their premiums can be “spread around a little bit” (as Obama likes to say) to subsidize the premiums of others. Of course, it’s easy to see the circularity here as higher premiums equals less “full-paying” customers and less subsidies equals higher premiums…until the whole system collapses.
Luckily you no longer have to take our word for it as eHealth.com has just published a new study that finds that, even by Obamacare’s own definition of “affordability”, residents in 47 out of 50 cities surveyed can’t afford the cheapest Obamacare plan.
According to a study released today by eHealth, Inc., which operates eHealth.com, the average family of three earning slightly too much to qualify for subsidies in 2018 would need to increase its household income by nearly $29,000 before health insurance became “affordable” based on Obamacare criteria.
The Affordable Care Act (ACA or Obamacare) considers health insurance to be “unaffordable” when annual premiums for the lowest-priced plan in a market cost more than 8.16% of a household’s modified adjusted gross income (or MAGI). When health insurance is unaffordable by this standard, individuals and families may qualify for an exemption from Obamacare’s individual mandate to buy health insurance.
“Coverage under the Affordable Care Act is becoming seriously unaffordable for many families, even by Obamacare’s own rules,” said eHealth CEO Scott Flanders. “I find it hard to believe that the framers of the law ever intended the cost of family health insurance to rival that of a second mortgage. Without the introduction of lower-cost options into the market or expanded government subsidies, many middle-income Americans are in danger of being priced out of the health insurance market entirely.”
Meanwhile, if anything, the study conducted by eHealth was somewhat conservative as it only assumed a 10% premium increase in 2018.
In preparing its analysis, eHealth reviewed the lowest-price 2017 plan available for families of three comprised of two adults age 35 and one child. The same family model was analyzed using data from Healthcare.gov in 40 cities, data from eHealth.com in 9 cities not utilizing Healthcare.gov, and data from the New York state exchange for New York City.
After applying a relatively modest annual rate increase of 10% to 2017 rates to project 2018 rates, eHealth discovered the following:
- In 47 of 50 cities surveyed, the lowest-priced plan would be officially unaffordable under Obamacare affordability standards for families earning 401% of the federal poverty level (about $82,000 per year in the contiguous US, making them ineligible for Obamacare subsidies).
- Among these, the average three-person household would need to earn an additional $28,939 per year before the lowest-cost plan becomes affordable according to Obamacare rules.
To put eHealth’s findings in perspective, a family of 3 in Charlotte, NC, with an annual income of $81,884, would have to spend 18% of their gross income in 2018 just to purchase the cheapest Obamacare plan for their family. On a post-tax basis, that expenditure would be well over 20%. Moreover, as eHealth points out, that family of 3 would have to find a way to make an extra $102,245 per year to meet the “affordability” test included in the Obamacare legislation.
Here’s how other cities compared on Obamacare “affordability”:
Steve Bannon famously said, “If you think they’re going to give you your country back without a fight, you’re sadly mistaken.” This is a long war. The alt-right would be wise to think about how to win a long, low grade culture war. That means building up the intellectual and cultural side, while also systematically throwing sand in the gears of the colonial machine. The path to victory is to make neo-liberalism too expensive to maintain and too unappealing to support.