March 14, 2016

During CNN's town hall with Bernie Sanders and Hillary Clinton Sunday night, an Ohio voter asked a question about health care reform which caused my antennae to quiver.

Teresa O'Donnell opened up by saying that her insurance premium had gone from $490 per month to $1091 per month after the ACA took effect.

"I know Obama told us that we'd be paying a little more, but doubling...more than doubling our health insurance costs has not been a "little" more. It has been difficult to come up with that kind of payment every month. I would like to vote Democratic, but it's cost me a lot of money, and I'm just wondering if Democrats really realize how difficult it's been on working-class Americans to finance Obamacare," she continued.

Clinton asked her whether she had bought her policy on the exchange, and O'Donnell answered that she was "purchasing it privately because we both had bouts of unemployment."

That answer made me squint even more, because job loss is one of the major reasons the ACA exists. That's considered a "life event," making her family eligible for coverage on the exchange, and subsidies if her family's income is below $97,000 per year.

Charles Gaba picks up the thread from here so well I'm just going to quote him with regard to the specifics of her situation.

Without having any additional information to go on, I'd be willing to bet that Ms. O'Donnell probably did go to HealthCare.Gov and looked around, but didn't bother entering her family's income/etc. into the window shopping tool to see whether they qualified for financial assistance. If not, that could easily explain why shethought that they'd have to pay such high rates via exchange policies vs. going off-exchange.

The other major problem here is that we have no idea what sort of policy the O'Donnell family had before, nor do we know what type of policy they're currently enrolled in. That $490/month policy might have been a so-called "junk" policy which barely covered anything...or it might've been awesome. Their new $1,081/month policy might be fantastic...or it might be skimpy with a huge deductible. We really don't know in either case...and Sec. Clinton was obviously thinking the same thing I was, but couldn't ask too many nosey questions about her personal finances or specific details of either the old or new policies, either. Doing so would have bogged the town hall down and made her look too wonkish, while also making her look like she was badgering the voter, which is never a good look for a candidate.

If we applied some basic assumptions for the sake of illustration, it turns out she and her family were probably eligible for a subsidy. Charles ran some estimates in his post, but I have a difference of opinion on Ms. O'Donnell's location -- He said "Howell, Ohio." I think it's Powell, Ohio, which is a different zip code from his calculations.

I ran some estimated numbers with the same assumptions Charles used. A family of 4, husband age 42, wife age 40, with two kids, age 13 and 10, both parents non-smokers. I assumed $40,000 in annual income just for argument's sake. It could be more, of course. These are nothing but hypotheticals. Reality could be wildly different. But here's what I found.


When I searched for policies in her zip code with that set of assumptions -- which again, could be wildly different from her actual situation, I came up with several silver plans which would have been less out-of-pocket with or without a subsidy than what she's paying through a private broker.



There are many more, but you get the idea. There are actually a lot of different silver plans in her area that are well below the $1091 per month cost she cited, again assuming that she's a nonsmoker and I have something like the correct age range for her, with or without a premium subsidy.

Here's the thing about the silver plans. If you're eligible for a premium subsidy, those plans are usually the sweet spot in terms of deductibles and copayments. This is because they meet the minimum standards for coverage, but are also the baseline for determining the amount of the subsidy and copayment offsets. The law was set so that silver plans not only could be offset with premium subsidies, but also with help on co-payments and deductibles.

The bottom line here is that we don't know what caused that premium leap for that family. Maybe it was a crummy policy that had to be brought up to the standard of the ACA. Maybe there was an age change from one year to the next, raising her into the next age bracket for premium costs. Maybe it was the leveling of premium bands, with one of them being a smoker.

There isn't enough information from one town hall question to figure out the reasons for the increase. But we can conclude that by choosing to buy directly from a private insurer rather than going through the exchange, she may have sacrificed tax credits that could have offset those costs, particularly in a time where she was not employed.

It is also possible that her spouse works at a job where he can get coverage, but the rest of the family can't, though from the details in her question, it's difficult to assume that, given that the policy is covering the entire family of 4.

The other part of the exchange that made my antennae quiver was her claim that "she would like to vote Democrat, but..."

That suggested to me that she wasn't actually there as a Democrat, but as an independent or Republican voter who was possibly tossing that question in there much like the subject of the Koch ads in 2012, where the "victims" of the ACA were really Republican plants. Regardless, her question was handled respectfully and as well as might be expected, given the constraints of a televised town hall.

I imagine we'll be seeing more of these sorts of questions as time goes by. There are corrections that need to be made to the ACA, without question. The levels of subsidies need to be adjusted -- they're too low for single people, especially young single people. The Medicaid gap needs to be filled in those states where the Republican governors refuse to expand Medicaid.

If you're going to choose not to shop on the exchange and therefore forego the possibility of a decent tax subsidy, that's not the fault of the ACA. That's faulty decision-making.

At any rate, I hope someone follows up with her and figures out if she could save money on the exchange for 2017, since the time for open enrollment is already in the past.

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