Affordable Care Act is in fact affordable

Last December, the topic of President Obama’s Affordable Care Act came up while traveling with a friend.  As the truck’s tires roared over the blacktop, drowning Springsteen’s, “Born in the USA,” I voiced concerns regarding the ACA’s potential to overload a family’s finances and received in return, a recommendation to personally research the Affordable Care Act.

Over the next two days of digging for information, I found the ACA is affordable for most. The keys to ACA’s affordability are the premium tax credits, the cost-sharing subsidies, and the expansion of Medicaid in some states.

Premium tax credits are available to United States citizens, legal immigrants, and legal immigrants who have not met the five-year citizenship requirement to apply for Medicaid.

The Kaiser Family Foundation, a self-proclaimed non-partisan, non-profit organization that focuses on major health issues, states on their website, “(Premium tax credits) provide refundable and advanceable premium credits to eligible individuals and families with incomes between 100-400% Federal Poverty Level to purchase insurance through the Exchanges. The premium credits will be tied to the second lowest cost silver plan in the area and will be set on a sliding scale such that the premium contributions are limited to the following percentages of income for specified income levels,” those percentages of income ranging from 2 percent up to 9.5 percent.

The Internal Revenue Service states, “The premium tax credit is refundable so taxpayers who have little or no income tax liability can still benefit. The credit also can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums.”  This can happen after submitting the appropriate forms, of course!

On the Kaiser Family Foundation website, Michelle Andrews states, “The federal cost-sharing subsidies essentially increase the insurance company’s share of covered benefits, resulting in reduced out-of-pocket spending for lower-income consumers.  In addition, people who earn 250 percent of the federal poverty level or less will also have their maximum out-of-pocket spending capped at lower levels than will be the case for others who buy plans on the exchange.”

Regarding the expansion of Medicaid, the Kaiser Family Foundation website states, “The ACA, as enacted, expands Medicaid to nearly all adults at or below 138% of the federal poverty level (FPL) as of Jan 1. 2014. This expansion, however, was effectively made a state option as a result of the Supreme Court ruling on the constitutionality of the ACA.”

The Kaiser website also states, “As of Oct. 24, 2013, 26 states, including D.C., are moving forward with the expansion, while the remaining 25 states are not moving forward at this time.  There is no deadline for states to adopt the expansion, and several states are still actively considering it.”

With the above provisions, most people living in the United States will find the ACA affordable, however as the Kaiser site states, “In states that do not expand Medicaid, nearly five million poor, uninsured adults will fall into a ‘coverage gap.’”

These individuals would have been eligible for Medicaid if their state had chosen to expand coverage. In the absence of the expansion, they remain ineligible for Medicaid and do not earn enough to qualify for premium tax credits to purchase Marketplace coverage, which begin at 100 percent FPL.  Most of these individuals have very limited coverage options and are likely to remain uninsured.

I almost fell into the trap of listening to opinion rather than facts. The truth is that President Obama’s plan for healthcare reform is affordable for most.