Glover: How the Affordable Care Act might cost me my house

Editor’s note: This commentary is by Andrew Glover of Barre.

On March 23, 2010, President Barack Obama signed the Patient Protection and Affordable Care Act into law. It is more recognizable by its shorter name, the Affordable Care Act (ACA) or Obamacare. This law was and is the cornerstone of the Obama administration. Obama has been championing health care reform since the 2008 Democratic presidential primaries where it became the selling point for his campaign. Popularly promoted as “health care is a right,” it was the ideology of affordable health care that boosted President Obama into the White House.

The Affordable Care Act has several key factors and goals, the largest of which is exactly what the name of the law says: to make health insurance affordable. In addition, other areas of the law include a mandate for individuals to either purchase health care insurance or pay a fine of 1 percent of their their annual income; an employer mandate, which forces employers to offer a health care plan that meets a minimum coverage and a maximum employee contribution (9 percent of income for the individual plan), again if they don’t offer this they are forced to pay a fine; and finally, that a health care “exchange” be established to make the system “easy” to obtain information from, navigate and eventually apply for insurance.

Unfortunately, my experience with the Affordable Care Act has neither been easy nor will it be affordable. The truth is I may loose my house because of the new law and its associated costs. Let me explain.

I first entered the workforce at the age of 15 sorting bottles at a redemption center in the back of a local convenience store. From there I was promoted to shelf stocker, assistant to the produce manager and eventually cashier before I left the company. I then worked as a snowboard instructor at a local ski resort during my senior year of high school before leaving for college in Virginia. In college I got a job working for the university. All during this time I was allowed to stay on my parents’ health care plan. The reason I tell you this is for you to understand I’m a hard worker. I have held a steady job from middle school and have never gone longer than two months without some sort of income from employment.

I realize that I have been extremely fortunate, and to any other middle-class family the aspect of $49 a month insurance premium is something to be drooled at.

 

After college I returned to Vermont and married my high school sweetheart and the love of my life. It was at this point that my previous status of dependent no longer applied to my parents’ plan and I was forced to seek insurance for my wife and myself. At this point I was working as a independent marketing consultant (self employed), with several contracts ensuring that I had income. Because of my status of “self employed” I applied for and was accepted on the Vermont state-sponsored VHAP health care plan (Vermont Health Access Plan). At the time, my wife and I easily met the income guidelines and and were paying $50 a month total.

A little over two years ago independent work started to slow down and my wife became pregnant with our first child. Because of this we moved from southern Vermont to central Vermont where a marketing coordinator position had opened up at a local Vermont-based company. Because of the job market, I took the offered salary of $40,000, which is slightly lower than the average salary for the position, but in my mind was reliable income for my family. At that time, my company offered a health care plan but by definition it was considered by the state to be “unaffordable” and because of some other financial situations I was allowed to stay on VHAP — at the top end individual rate of $49 per month. Because my wife was pregnant she was transferred to Dr. Dynosaur (Vermont Medicaid) and we did not have to pay for her insurance.

My wife gave birth to a beautiful boy (who went on Dr. Dynosaur) and returned to the same VHAP program I was on. For a few months our payment were approximately $100 a month for insurance. Last March my wife became pregnant with our second child and has a due date of Dec. 23. Because of this my wife was transferred back to Dr. Dynosaur and we returned to a total cost of $49 a month for the entire family’s insurance cost.

I realize that I have been extremely fortunate, and to any other middle-class family the aspect of $49 a month insurance premium is something to be drooled at. However, the way it played out, because my income was just low enough, we did qualify for VHAP, which has been an amazing blessing. A blessing understood by thousands of Vermonters who have taken advantage of VHAP over the years. VHAP plans allow households making less than $43,752 a year access to extremely affordable health care.

The problem is that because of the Affordable Care Act, VHAP is ending March 31 (delayed due to gubernatorial decision), which forces everyone on VHAP to switch to the Vermont health insurance state exchange (Vermont Health Connect). For most people currently on VHAP this will more than triple their insurance costs, however for me and my family, we could potentially see a 1002 percent increase!

Why such a drastic increase? Because of that lovely employer mandate. In response to the ACA employer mandate, as well as a change on the federal level to what is considered “affordable,” my current employer has changed their previous plan to one that technically meets the criteria under the new system. By the definition of affordable, the cheapest individual plan must be no more than 9 percent of my households income. Because my employer is offering “affordable” health care I am forced to take it from them, instead of from the exchange. For me that individual plan would be $300 month. However, I have to look out for my entire family, not just myself so that means assuming a 180 percent increase from individual to family plan that means and “affordable” cost for a family is considered to be $540 per month.

$540 a month! Thats a 1002 percent increase, or a total difference of $491!

Luckily my employer choose not to take the absolute cheapest way out, instead offering a family plan for $346. So from the $49 a month I’m paying now to the $346 per month I’ll be paying starting March 31, I will be seeing a 606 percent increase in the cost of health care.

What that amounts to is $297 a month vaporizing out of my monthly budget. Now I’m not sure about your family budget, but my budget isn’t equipped to handle a $297 a month shock. In fact like the majority of America, I live paycheck to paycheck, barely making enough to cover my family’s costs as it is. My family has already cut the cord, so we don’t have a cable bill. Neither my wife nor I drink, so we don’t spend money on alcohol (or drugs). Because my son is 13 months old and we are expecting a second, we don’t go out to eat often. We have virtually no debt, only school loans and a mortgage. We live in an energy efficient house, so we capitalize on our energy costs. My wife is a stay-at-home mom so that we don’t have child care expenses. Basically there is nowhere to make budget cuts.

Now we own a three-bedroom house in a nice neighborhood in central Vermont, one which we purchased with a large down payment and only 6 percent interest. Between the principle and interest our monthly payment is only $580. As the average rent on a modest two-bedroom apartment in Vermont is $990, our mortgage is far below what most individuals pay for living. Nonetheless, it is one of my family’s two largest expenses every month. Because of changes in health care costs I need to come up with $297. Lets pretend I’m unable to make any budget cuts or find a second job in this still poor job market, this $297 would have to come from somewhere. Regardless of where I pull it from it’s going to affect my entire budget, including the money I have allocated to pay my mortgage. But I’m an optimist, so while my family and I may be homeless, at least we’ll be healthy.

Comments

  1. Dave Bellini :

    The real story of Vermont Health Disconnect is not the website. The plans in the exchange are unaffordable. People moving from VHAP and Catamount are getting “kicked in the teeth” as our Governor likes to say. If one does get sick, the out of pocket costs are staggering. The Administration only talks about the premiums being subsidized.
    .
    And property taxes are going up and up.

  2. Bob Zeliff :

    The case you presented shows why Vermont policies are better than the kludge the ACA has become. We all need to support getting to Green Mountain Care as soon as we can to get to better, Vermont defined, health care policies.

    The ACA was a good idea to begun with, health care for all Americans, no one being kicked off for pre existing conditions, consistent well defined polices that every one can understand with no insurance company fine print, etc.

    However it became a real kludge in the “sausage making” in congress. The policies of the ultra conservative Heritage Foundation, aka Romney Care, became to dominate. This include the Mandate and fines to insure that people “had” to buy policies from the insurance companies so they had enough money. This mandate was primarily targeted people who had no insurance, i.e. mostly young people. These uninsured people presented the opportunity for the insurance companies to increase their business buy about 20%..more money for them..mostly subsidized buy the Government. Along these line several of the cost saving aspect were also side lined, to again make it more profitable for the insurance companies.

    I hope you can find a way to financially weather this storm. I believe if we to Vermont insuring Vermonters with Green Mountain Care situations like yours will be avoided.

    • Walter Carpenter :

      “The case you presented shows why Vermont policies are better than the kludge the ACA has become. ”

      The ACA is capitalism at its best. It says something about the nature of our system in that this is the best we could do in the name of health reform. I agree with Bob about how this shows why Vermont policies are “better than the kludge the ACA has become.” We need to get beyond this to single-payer.

  3. Greg Lapworth :

    Guess you forgot the saying (warning): “I’m from the government and I’m here to help you”. Don’t vote for socialists next time.

  4. Carl Marcinkowski :

    That sounds about right. I don’t understand how you expect not to pay the going price of health insurance when everybody else does. Sorry for the shock but I’ve been paying a lot more than that for years and I earn less than you. Having considerable financial challenge is the norm for the 97% .

  5. Another reason why we need single payer as soon as possible. The ACA, while having some needed reforms, is still an insurance based health plan and overly expensive. Hopefully you can weather the storm until we have real health care reform.

  6. Elliott Bent :

    Aren’t you still eligible for a subsidy? At the very least Dr. Dynasaur?

    According to the VTDigger User’s Guide it looks like you are eligible for a subsidy of $1000 per month (before Dr. Dynasaur and other assistance).

    Or does the fact that your employer is providing insurance exclude you from subsidies?

    http://vtdigger.org/majorprojects/users-guide-vermont-health-connect/#1

    • After I spent an hour and a half on hold and another half hour with the insurance “navigator”. I was able to confirm I will be able to keep my kid(s) on Dr. Dinosaur.

  7. Tony Redington :

    This presents one side of the story. We need to hear from VT Health Connect if this is a correct result of the ACA. Is the analysis by Mr. Glover correct?

  8. Karl Riemer :

    If this analysis is correct, you may “loose” a house you could only afford in the first place because the rest of us were paying for your insurance. Many people earning less than you do pay more for health insurance: more than you will pay, far more than you have been paying. Buying a house you can barely afford while paying close to nothing for health insurance (and presumably close to nothing for health care) is imprudent, to say the least. You had to have known that one or both of those would change at some point. Be thankful your idyll lasted as long as it did; try being a little less optimistic and a little more realistic.

  9. Lee Russ :

    All in all, an excellent argument in favor of publicly financed health care in general, and the need to get to the publicly financed Green Mountain Care as quickly as possible in particular.

    Think about it: VHAP, Dynasaur, the exchange, subsidies for some but not others in similar situations, who is and is not required to use the Exchange, deductibles…does this sound like a sane system to anyone? Compare that to a true publicly financed system of universal coverage: everyone pays their share of the necessary taxes, then everyone pulls out their medical card to get treatment. No need for multi-part “Guide to the Health Exchange.”

    When it comes to health care, complex, fractures, and profit-driven simply are not good.

    • Ironically, many on the political right are also bemoaning the deductibles and co-pays, especially on the Bronze Plans. However before the ACA, these same pundits were enamored of high deductibles, co-pays, along with heath care savings account. What a difference in outlook a few years makes!

      • Walter Carpenter :

        “However before the ACA, these same pundits were enamored of high deductibles, co-pays, along with heath care savings account. What a difference in outlook a few years makes!”

        The ACA did begin as an idea from the heritage foundation, so no wonder:)

    • Lance Hagen :

      It sure would be nice to actually see a proposed plan from the Shumlin administration, as to what will be covered, how we will pay for it and how they intend to control the cost of healthcare services. They have been jerking us around for the last 2 years and we still haven’t seen a detailed plan.

      We need to see this before we declare it is better than the Affordable Care Act.

  10. Ann Meade :

    You have chosen to buy a house, have two kids and to have only one person in your household employed. Expensive decisions that many people cannot afford. I’m sorry but this story has nothing to do with the whether or not the ACA is a good program.

  11. Kathy Callaghan :

    Bob Zeliff: “The case you presented shows why Vermont policies are better than the kludge the ACA has become. We all need to support getting to Green Mountain Care as soon as we can to get to better, Vermont defined, health care policies.”

    In order to implement “single payer” (which will still be a multi-payer system), the Shumlin administration has to obtain a waiver from the Feds allowing Vermont NOT to offer a federally required Exchange, and to replace the Exchange with the proposed “single payer” system..

    The Governor’s theory is that the Feds will continue pouring millions of dollars into Vermont’s hew “single payer” system year after year indefinitely – as they are now doing with the Exchange – to offset the true cost of “single payer”.

    Many have correctly pointed out that this is not likely to be the case over the long term, as the Federal government deals with its own budget shortfalls.

    As Federal subsidies diminish or cease altogether, Vermonters would be left holding the bag to make up the difference, with even higher taxes.

    To your point about “better, Vermont defined health care policies”, the Feds are unlikely to grant Vermont relief from having to have an Exchange in 2017, unless Vermont agrees to maintain the “essential benefits” that are a fundamental provision of the Affordable Care Act.

    The “essential benefits” and the essential benefit coverage levels are what drive up the cost of the Exchange plans. These will need to remain in place for any waiver to be granted.

    • Bob Zeliff :

      Ms. Callaghan,

      While you are correct, Vermont will have to gain waivers to move fully to Green Mountain Care.

      Achieving that is not unreasonable to expect as we have a some what similar waiver now to augment Federal Medicaid with Vermont funds, which might have contributed to the better, pre ACA position, of Andrew Glover.

      Green Mountain Care, both short term and long term, will be paid my Vermonters. Remember, all Americans including Vermonter, have PAID for their Medicare and Medicaid thru pay role deductions. This Federal medicare and medicaid money is only that which the Government owes Vermonters. Certainly not some Federal gift as you seem to presume. It is only republicans who now wish to cut these prepaid benefits.

      I quite certain that Vermont’s Green Mountain Care benefits will be substantially above those “essential” required in the ACA. This has been a tradition in Vermont. That is why we have been rated #1 or #2 in the nation for health care as compared to other states like Texas which have ranked very low.

  12. Dan Carver :

    Bob, correction to your statement: “Remember, all Americans including Vermonter, have PAID for their Medicare and Medicaid thru pay role deductions.”

    This was the design of the program, yet over the years many recipients of these programs and social security never paid a dime towards the programs.

    s a socially liberal, yet conservatively minded independent, I do not wish to cut prepaid benefits, just classify the benefits not paid for as pure welfare and stop scamming the legitimate pre-funded programs.

    How was this allowed to happen? All part of buying votes from new immigrants. Note: I am not opposed to new immigrants, particularly legal ones, yet everyone who receives these funds should be required to pay into them. This is part of the reason why we have a spending problem.

  13. Ethan Rogers :

    Given that one in six Vermonters receive SNAP benefits, thousands more pay reduced property taxes and tens of thousands are on Medicare or Medicaid, who’ll be left to pay for Green Mountain Care? This state’s inverted pyramid will have 2-3 people supported by one worker, which isn’t sustainable.

    • Lee Russ :

      I think you misunderstand the Green Mountain Care concept. That plan is intended to be funded by money ALREADY BENG SPENT on healthcare insurance premiums, as well as on uninsured medical care & Medicare.

      The taxes that will be raised will REPLACE the money being spent on insurance premiums; it is not “new money” only money raised in a different way.

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