Friday, October 11, 2013

Lies, Damn Lies and WTFs

My friend Becca reposted the following frightening note on her Facebook page and asked me to respond.  Becca is a really good project manager, which means her job is to get other people to do work, so here goes.  :)

The horror story is this:

From a friend, PAY CLOSE ATTENTION...posted on the Obamacare website today "I actually made it through this morning at 8:00 A.M. I have a preexisting condition(Type 1 Diabetes) and my income base was 45K-55K annually I chose tier 2 "Silver Plan" and my monthly premiums came out to $597.00 with $13,988 yearly deductible!!! There is NO POSSIBLE way that I can afford this so I "opt-out" and chose to continue along with no insurance. I received an email tonight at 5:00 P.M. informing me that my fine would be $4,037 and could be attached to my yearly income tax return. Then you make it to the "REPERCUSSIONS PORTION" for "non-payment" of yearly fine. First, your drivers license will be suspended until paid, and if you go 24 consecutive months with "Non-Payment" and you happen to be a home owner, you will have a federal tax lien placed on your home. You can agree to give your bank information so that they can easy "Automatically withdraw" your "penalties" weekly, bi-weekly or monthly! This by no means is "Free" or even "Affordable.

Wow, that would be horrible...  if it were remotely true.  But without even resorting to, let's take a look at this.

Let's start with the IRS-will-do-horrible-things-to-you email.  The reality is that fines for not purchasing insurance max at $95 per person or 1% of family income (whichever is greater) in 2014.  Income is defined as the amount OVER the filing threshold ($10K) so the max fine for this mythical person would be $400 (assuming the middle of the income range they stated), not $4000.  And the fact is that the IRS has very little leverage to collect those fines.  Your driver's license will not be suspended (that doesn't even make sense as they're issued by states, not the Fed), your wages will not be garnished, your home will not be taken away - NONE of that can happen.  The only things the IRS can do is withhold the fine from your tax refund IF you get a refund and the note is correct that they can put a lien on your home (doesn't mean they can take your house, just means you have to pay the fines if/when you sell).  So, part bullshit and part scary-sounding stuff.  More details here.

So what about the cost of the insurance itself?  Certainly sounds like a damn high monthly premium for crap insurance (Silver is the next lowest of the four tiers of ACA-approved coverage).  But the best I can tell, the highest monthly premium for a single person is $342 (happens to be in Wyoming) so roughly half what this mythical person states.  See here.  And the worst deductible I could find for the Silver plan was $3000, not $14,000.  See here.  $3000 is still pretty high but the idea of the lower-cost plans is to keep a major injury or illness from bankrupting you or your family.  And they still cover doctor visits with $40-$60 copays - high compared to my company-provided coverage but better than paying the full cost of an office visit.  Again, assuming this mythical person has no kids or dependents, they're likely just about at the threshold for receiving any subsidies, but I'm not positive about that as some of their income may be exempt from those calculations - it's possible they'd receive some help in paying their premiums.

The oddest thing about this though is the note about a pre-existing condition.  Without the ACA, this mythical person would likely be unable to purchase insurance at any price or at best case they might find something that cost them more than the $600 month/$14K deductible they're complaining about.  So a real person in this situation would likely be quite happy with the opportunity to purchase health insurance that the ACA affords.

I'm not an expert in the ACA since I do have company-provided coverage, so you guys feel free to correct anything I've gotten wrong here.  Or check Snopes for me - I'm too lazy.  :-D

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At 10:53 AM, Blogger Lex Alexander said...

Both my brothers are Type 1 diabetics and run their own businesses. Both are able to get coverage AT ALL for the first time, and both think the prices are pretty reasonable. The one who has full-time employees thinks he may even be able to cover them, as well. So there's your horror story.

Bottom line: A relatively few people who already have decent insurance are paying a little more. A lot of people who already have insurance are paying from a little to a lot less. And 30 million people who didn't have insurance at all will find it much easier to get some now.

Obamacare has the potential to become as popular as Medicare. And if that happens, the GOP is screwed for a generation. THAT, friends, is why the GOP is fighting it so hard AND trying to make it so hard for Democratic-leaning constituencies such as the very young, the very old, minorities and people with disabilities to vote.

At 12:06 PM, Blogger Becca said...

Thanks, Tony, for doing this research. I'm going to include your link in the post I received from my friend. You get an A today! :)

At 12:19 PM, Blogger Becca said...

Thanks, Tony. Appreciate your work on this to provide the facts. I will include your link to the original post I received. Thanks again and you get an A today! :)

At 1:32 PM, Blogger Tony Plutonium said...

Thanks, Becca! Got to keep the PM's happy! :-D

At 4:58 PM, Anonymous Jennifer Priest said...

Can you help me with your facts on how the IRS has no leverage in collecting the fine? States work with the IRS all the time. I worked for a state government agency for 14 years that garnishes Federal tax refunds for individuals who are in default on their student loans. Believe me, people were shocked when they learned that the Commonwealth of Kentucky had received their Federal tax refund (which of course reduced their student loan indebtedness). It is not much of a leap to think that the information and consequences could go from the IRS to the states just as easily. Thanks!

At 9:35 AM, Anonymous Anonymous said...

Tony's blog formula: Take one straw man, set up, knock over, repeat. Here's a story for you. My (and maybe our) friend Andy Herndon received a letter from the 'Blues', his current insurance provider giving him the option to maintain his current coverage. His premium will only go from $263 to $810 per month. That's nearly $10,000 per year. What a great reward for 30+ years of hard work. Yo Lex, if this is common (and I know you are afraid it is), the Left is screwed for a generation.


At 6:30 PM, Blogger Tony Plutonium said...

CK - I think you need to work on your reading comprehension there, hoss. I didn't set up the straw man - that was sent to me by a politically conservative friend for my comment. And I am truly curious about Andy's situation - has he looked into other options? How did the coverage itself change? I've seen similar anecdotal evidence from people I know that are able to afford insurance for the first time or might be paying slightly higher (certainly not what Andy's seeing) premiums for far better coverage. So definitely curious about the broader story.

Look, the ACA's a compromise - basically a GOP idea that the Obama administration co-opted because they knew they couldn't get a single-payer, Medicare-for-all system passed. And I will criticize the hell out of it until it gets better but don't kid yourself that it's going away or that it will somehow hurt Democrats. Most of us get healthcare through our employers and a hell of a lot of people are getting coverage for the first time. You're an IT guy (that's worked Fed contracts) so you know how screwed up those usually are to start with but they get fixed. And the state exchanges seem to be working well.

And then President H. Clinton can go ahead and get us to single payer... :-)

At 2:05 PM, Anonymous Anonymous said...

There is some more information here:

He's also got a picture of his letter on his Facebook timeline.

This isn't "somebody said" or "I know a lot of people who...", this is one of millions of people who will be hurt because of the ACA.

I'm glad that you can be so flippant (Pres. H. Clinton) while hard workers like Andy are watching his kids education go into your friend's pockets. Since he is a republican, it's okay with you if the President targets him, too.

At 7:35 PM, Blogger Tony Plutonium said...

CK, I know I can't expect you not to be an ass but I do expect you to not be a silly ass. Nothing flippant about my prediction both that Hilary will be our next president if she wants to be and that we will end up with single-payer or something closer to it than we are with the ACA (which I'll remind you again was a Heritage Foundation idea that the Republican governor of Mass trumpeted until he didn't). And exactly what "friends" do you think that I have that are profiting? The insurance companies sure as hell are not my buds. The millions of people that can now get insurance that couldn't before? Okay, I do know some of those folks and like them.

Again, I'm not an expert on the ACA but the situation you describe does make me want to know - does the plan with the higher rate cover stuff that wasn't covered before? Were other plans available? Does Andy qualify for subsidies? I don't expect you to answer as those are personal questions - but in general those are the questions I'd like to see answered to get a full picture.

By the way, your last comment is just asinine.


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