Mike Kueber's Blog

January 25, 2013

More problems with ObamaCare

Filed under: Issues,Medical,Politics — Mike Kueber @ 9:20 pm
Tags: ,

Back in November, I blogged about some growing pains as ObamaCare took shape.  The post was prompted by HHS publishing regulations that, in addition to dictating standard policy coverages and requiring coverage for pre-existing conditions, severely limited the ability of insurance companies to accurately price the policies.  Specifically, the regulation provided:

  • Premium can vary based on age (3:1), tobacco use (1.5 to 1), family size, and geography.  All other factors – such as pre-existing conditions, health status, claims history, duration of coverage, gender, occupation, and small employer size and industry – are prohibited.

Today, more than two months later, there is an Associate Press article in the Express-News that describes a potentially huge problem with the interplay of the two authorized pricing factors – age and tobacco use.    According to the article, the age limitation on pricing will cap the annual price of a 60-year old’s policy at $10,172, with a tax credit for someone making $35k taking the price down to $3,325.  But the tobacco-use surcharge of 50% or $5,086, with no additional tax credit allowed, will bring the final price back up to $8,411 or 24% of this person’s income.  That’s not affordable.

This sort of snafu is inevitable in a program this big and new, and numerous tweaks will be necessary.  But as I pointed out in my blog a few weeks ago when discussing the possibility that the employer fine of $2,000 might be low enough that employers in masse will abandon employee health insurance, congressional Republicans are in no mood to tweak ObamaCare to help it work properly.   

I don’t know how this will play out, but gosh, it would have been nice if ObamaCare had been passed by a bipartisan majority.


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