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.

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.