I once had an old Chevy Monza. It failed numerous times, but if I had enough money, the kid at the corner gas station could always bring it back to life. The Affordable Care Act is failing. The question is how much money are taxpayers and policyholders willing to spend?
ACA forces younger people, especially males, to overpay for health insurance in order to keep premiums low for the old. Even with the taxpayer subsidies, a 30 year old with an annual income of $25,000 would still pay about $170 a month for a Silver Plan. That’s cheaper than the $260 actually charged by the insurer, but still more than 8 percent of a $25,000 annual income.
And there is another problem — benefits. The Silver plan comes with a $2,000 deductible. Most 30 year olds haven’t spent $2,000 on health care in their lifetime. It may be difficult to convince them to pay over $2,000 a year in premiums, then another $2,000 in health care expenses before they get any benefits. If they can be convinced, they could spend over 16 percent of their income, not including the additional costs for copays, coinsurance and prescription drugs not covered by the plan.
Of course, even 30 year olds can have expensive, chronic conditions (asthma, celiac disease, cerebral palsy, diabetes, epilepsy, lupus, MS and sickle cell disease, to name a few). They’ll sign up because they know their medical expenses are much higher than the premiums and deductible they would be required to pay. And then premiums will go up for everyone to cover their higher costs.
As the years go by, will we all just accept higher premiums?
My old Chevy smoked and belched, and the monthly repair bills were high. I got rid of it. You can do that with cars.