Without Obamacare, We Would Have Even More School Crossing Guards

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/

States Refusing to Set Up Health Exchanges are Helping Their Children - But Not in the Way They Think

The reasons that 25 states chose not to participate in creating a new health exchange aren’t exactly the ones they’ve been claiming – that Obamacare is too complicated, too anti-consumer, or too politically unpopular. 

The truth is that they have never done a very good job of protecting the health and well-being of their people – especially their children – and they were not ready to start now.

Now that all fifty states have decided whether or not they will at least participate in running their own health insurance exchanges as allowed by the Affordable Care Act (you can see the updated information about what each state decided on my state rankings page), a clear picture is emerging of what distinguished the states choosing to participate from those refusing to do so.

On the whole, when compared to one another, the 25 states that have chosen to participate in running their exchanges (17 by themselves, 8 in partnership with the federal government)do a much better job of taking care of their people than do the 25 states that have deferred to the federal government.

So, just as we imagined a few months ago, residents in the states that refused are likely to be much better off with the federal government running their exchanges.

In many cases, the differences between the states choosing to participate and those refusing to participate are significant.

Let me illustrate why by showing you some updated numbers.  But first, let me explain briefly how I get to them. 

If you rank the states from best to worst, and assign the ranking of 1 to the best and the 50 to the worst, then two “averages” result.  The average ranking of all the states will be 25.5.  And if you divide the states into two equal groups of 25, with all the top-ranked states in one group and all the bottom-ranked states in the other, then the average ranking of the top group will be 13, and the average ranking bottom group will be 38. 

So keep in mind that 13 is the best possible average ranking for any group of 25 states to have, and 38 is the worst possible.

Now here are some average health-related rankings of the group of 25 states choosing to participate in establishing their own exchanges:

• Overall health (OHPM 2012 rankings):  21.5
• 2012 Kids Count ranking: 21.2
• Percentage of uninsured: 21.7
• Percentage with employer-based insurance: 22.4
• Ranking in spending on mental health: 24.7

And here are the average rankings of the group of 25 states refusing to participate in establishing their own exchanges:

• Overall health (2012 OHPM rankings): 29.5    
• 2012 Kids Count ranking: 29.8
• Percentage of uninsured: 29.3
• Percentage with employer-based insurance: 28.6
• Ranking in spending on mental health: 26.3

In every instance, states choosing to participate in setting up their own exchanges have a much better track record than states refusing to participate.   In only the mental health spending ranking is it even close. 

Those of us living in one of the 25 states refusing to participate ought to be thankful that our state policymakers punted on the exchange, because it is more likely than not that we’ll be much healthier and better insured in the long run. 

Especially our children.  States choosing to participate rank an average of almost ten places better than the states refusing to participate.  Children may have literally won the health lottery when those states decided that the federal government could do a much better job of assuring access to health care in the future.

The differences among the states are not just political ones, either. 

Solid Republican states like Utah, Idaho, and Kentucky are all creating their own exchanges, and states like Arkansas, West Virginia, and South Dakota are partnering with the feds.  Meanwhile, Maine, Wisconsin, Ohio, and Pennsylvania are all letting the federal government create their exchanges.

And the decisions have turned the traditional north/south, “state’s rights” argument on its head.  States’ rights states, like Texas and Florida, are refusing to participate, while states like Connecticut, Massachusetts, and New York are choosing to do so.

States refusing to participate may have tried explaining their decision by claiming that the federal government created a program that was too complex, too controversial, or too anti-consumer.  But those clearly aren’t the reasons. 

No, the real reason is that they know that the federal government has already proven itself over time to be better equipped to protect our health than they are.

To reach Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Better Off With a Federal Exchange

As the December 14^th and February 14^thdates draw near for states to say whether they will create Affordable Care Act health insurance exchanges and what they will look like, the world seems upside down.

Traditional “states’ rights” advocates such as South Carolina, Georgia, Alabama, Louisiana, and Texas all say they will let the federal government set up their exchange.  Historically “strong federal government” allies like Connecticut, Massachusetts, California, New York, and the District of Columbia are setting up their own exchanges.

In all, sixteen states so far have said they want the federal government to set up their exchange, while eighteen states and the District of Columbia have decided to run their own.  The rest are either undecided or looking to partner with the federal government.  No states are considering a multi-state exchange – so much for “selling insurance across state lines.”

The states that are deferring to the federal government cite a number of reasons.   Cost, uncertainty, and too-tight deadlines are the most common.

Politics is also a factor.  Of those sixteen states, only two – Missouri and New Hampshire – have Democratic governors.

But there’s another reason why people living in those states should be pleased that they are deferring to the federal government.  Historically, reluctant states don’t make the health and mental health of their citizens a governmental priority.

In this year’s list of the ten Best States for Your Health, five – Connecticut, Massachusetts, Minnesota, New York, and Vermont – are moving forward with state exchanges.  Three – New Jersey, Pennsylvania, and Utah, are still undecided.  Only two – New Hampshire and Maine – are opting for a federal exchange.

However, in this year’s list of the ten Worst States for Your Health, the results are subtly reversed.  Four – Texas, Alabama, Oklahoma, and Louisiana – are opting for the federal exchange.  Only three – New Mexico, Nevada, and Mississippi – are planning for state-run exchanges.

That may not seem like a big difference.  But when you look at all the states that have decided, those currently opting to run their own exchanges have an average ranking of just over 20^th in protecting the overall health of their citizens.  Meanwhile, states deferring to the federal government have an average ranking of over 29^th in protecting the overall health of their citizens – over nine places worse.

The difference is just as clear when it comes to spending to protect the mental health of their citizens. 

States opting to run their own exchanges also have an average ranking of just over 20^th when it comes to funding mental health services.  States deferring to the federal government have an average ranking of almost 30^th – nearly ten places worse.

Keep in mind that if all 50 states chose one or the other and divided equally, the best possible average ranking would be 13^thand the worst possible 38^th.

You can view all the states in two new tables here.

Where health and mental health are concerned, “states’ rights” often means state-sanctioned neglect.

There are individual exceptions, of course.  Maine and Alaska historically spend well on mental health, but are opting for a federal exchange.  Nevada and New Mexico do poorly on protecting the overall health of their citizens, but are embracing state-run exchanges.

The take-home lesson, however, is clear.  If your state doesn’t want to create its own exchange, then you are probably better off with the federal exchange.

And if your state is still undecided, be careful about what you wish for.  Floridians, for example, would probably be better off with a federal exchange.  The state ranks 33^rd in overall health and 49^th in mental health spending.

On the other hand, undecided Pennsylvania is 8^thin overall health and 4^th in mental health spending.  There’s a much better chance that a Pennsylvania exchange would be better for its citizens than any the federal government could offer.

The reason for worry in the reluctant states has to do with the flexibility all states will be granted in setting up exchanges. 

Last week, the federal government published a new set of proposed rules governing the “essential benefits package” – the key components of all health insurance plans to be offered through the exchanges beginning in 2014.  States running their own exchanges will be given a great deal of latitude in determining just how rich these benefits will be.

And as the clock ticks toward the Valentine’s Day deadline, it’s hard to imagine new love coming from the states that have rejected our health and mental health so many times before. 

If you would like to schedule Paul Gionfriddo to speak to your group or meeting, please email gionfriddopaul@gmail.com.