Adrian Dantley was a six-time NBA all-star who averaged over
24 points per game during his 15-year career.
He was inducted into the Naismith Hall of Fame in 2008. He made good money and reportedly invested it
well.
Today Adrian Dantley is 58 years old. Like most 58 year-olds, he wants health
insurance. But the NBA does not offer
health insurance to its retirees.
So Dantley recently
took a job as a school crossing guard – for the health insurance. The story is all over the sports pages this
week. I’m sure that it is drawing more
than its fair share of giggles and head shakes.
But I’ve known a lot
of school crossing guards in my life.
And many do it for exactly the same reason.
As a summary
of news reports recently digested by Kaiser Health News shows, it isn’t
always easy for a 50-something retiree to get health insurance.
In just a few months, the Affordable Care Act will change
this – and not just for 50-somethings.
But despite all of the attention to ACA in the three years since
it was enacted, most of us still don’t really understand how it will affect us
personally.
In recent weeks, some analysts and insurers have said to be
prepared for sticker
shock as 15-20 million currently uninsured people gain private insurance,
and up to 17 million more move onto government-sponsored programs.
So when a typical,
middle income family has to buy insurance in this post-ACA world, what will it
cost and what will they find?
The gross cost will indeed be high, but the net cost much
lower.
You can plug your own numbers into the Kaiser Family
Foundation’s excellent subsidy calculator and see for yourself.
But this example will give you an idea. The full premium cost of health insurance for
a middle-class family of four making $46,850 per year will be $14,245 – almost
one-third of that family’s total income.
They will then get back a tax credit worth $11,294. So their net health insurance cost will be $246
per month.
And their ACA tax
credit will be so big that they will end up paying virtually nothing in net
taxes to the federal government.
Instead, their entire tax burden – something that has
historically supported spending on defense, highways, energy development,
environmental protection, public health, education, social services, veterans’
services, childhood nutrition, and more – will essentially be returned to them to
pay for their health insurance.
This will be true for many.
According
to recent data from the Congressional Budget Office, the average ACA tax
credit in 2014 will be worth $5,510.
But, remember, you only get the credit if you personally pay
the bill.
Where will we find
our insurance, and what will it look like?
We will find insurance through new exchanges that seem as shrouded
in mystery as the creation of the universe.
But when the exchanges come into existence in six months, they
won’t be quite so exotic.
We will just find a number of standard insurance plans from a
variety of well-know insurers that we or our employers will be able to buy through
premium payments and tax credits. Nearly
all will cover a standard set of health and mental health benefits.
Some plans will cover additional services, and be given a
higher rating, “gold” versus “silver,” for example. And co-pays and deductibles won’t disappear. Premiums for insurance plans with lower
deductibles will be higher; those with higher deductibles will cost less.
Health care procedures will still be covered, providers will
still be paid, and insurers will still occasionally deny reimbursements for
reasons that we can’t fathom.
Who will be left out?
If nothing else changes, in another three years thirty
million people will remain uninsured.
- Six million people who, for the privilege of avoiding the health insurance system in its entirety, choose to pay up to 2.5 percent of their income as a tax penalty to help pay for uncompensated care.
- Up to 12 million people with serious mental illnesses or addiction disorders who are currently not receiving care (except when they are in jail).
- Twelve million more who fall through the cracks, or are uninsured for short periods of time.
But at least Andrian Dantley and 68,520 others will have a choice. They won’t
have to work as crossing guards anymore just for the insurance.
To reach Paul Gionfriddo via email: gionfriddopaul@gmail.com. Twitter: @pgionfriddo. Facebook: www.facebook.com/paul.gionfriddo. LinkedIn: www.linkedin.com/in/paulgionfriddo/
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