PPACA FAQ: Affordability and Subsidies (Part 2)

(This would be so much more fun if I was writing about a plan for universal health care for everyone. Medicare for Everyone or whatever.  Put us all in one bucket and let us all wait in the same lines.)

(Cross-posted to Corrente)

My plan was to continue the discussion of Affordability and Subsidies with an answer to a remaining after discussion in the comments on The Corrente site regarding this piece of the story:

I’ll list the essentials:

1. Employee earns $35,000/yr
2. Employee-only coverage = $275/mo (This is just under 9.5% of her salary)
3. Employee +children = $500/mo or 17% of Employee Income (The IRS ruling says that only the cost of Employee-Only coverage is considered for affordability. But, PPACA does require an option for dependent coverage on parent’s policies)
4. There is no spousal coverage option (there is no PPACA requirement for spousal coverage)
5. Spouse may purchase insurance through an Exchange and would be eligible for a subsidy (because family income is under 400% of poverty)
6. Employee & Children do not qualify for Subsidies because the Employee’s share of the insurance is affordable.

The question I’ve been hammering on all week (6 hours when I stopped counting) Relates to points 4 & 5 above. He may purchase insurance through the Exchange — but what will he be expected to pay? His wife is already paying 9.5% of the household income (using MAGI which will not be explained here) for her affordable employee-only coverage. Will he be expected to pay another 9.5% of their income before his subsidy kicks in?

Sadly, those 6+ hours didn’t reveal a definitive answer (to me). If I was going to make a guess, I would go to the California Calculator and enter the family’s information and take that for my answer. Their calculator happens to have one of my favorite explainations — the one labeled, “A married couple earning $40,000 per year if one spouse in on Medicare” (You might be able to tell just how frustrating my week has been that I am collecting favorite explanations.) It seems possible that this family’s situation might be comparable to that One Spouse on Medicare situation. But, I’m not at all sure.

For now at least, file this one under Questions Without Answers.

Update:

Commenter t, quoted below gave me an Ah, HA! moment:

No, he won’t be required to fork over 9.5%. Search Mandate exceptions. One of the exceptions of the ACA is that if individual insurance premiums with subsidy cost more than 8% of the MAGI, then the individual is exempt from the mandate. He will not be required to carry insurance at all. If he does carry insurance in your scenario, because he is part of a family of 4, he will qualify for a subsidy that will take his costs quite a bit below 9.5%. Exactly how much below, it’s hard to say. I’m guessing via looking at calculators that it will be in the range of 6.5%, which is still exorbitant.

But yes, this is a sticking point for sure. MAGI in his case should exclude the cost of the other family premiums. But because this law is a complete mess, it doesn’t.

I am predicting pitch forks, tar and feathers by 2014.5

T clarified something I didn’t understand:

1) Mom’s insurance could cost as much as 9.5% of her salary because that is how affordability is defined for employer-offered insurance.

2) But the subsidies for Exchange policies are calculated by which Bucket group your family falls into … see this Table from Wikipedia

Which explains why entering this family’s into the California Calculator, the cost to the family is so far below 9.5%

Still not a firm answer – The mom’s purchase of insurance through her employer (at 9.5% of family income) is within the scope of the PPACA requirements.  And, Medicare (referring to the California Calculator explanation) is NOT within the scope of PPACA requirements.

But, we can be pretty sure that Dad’s premiums will be something under another 9.5% of their household income.

As t says, “still exorbitant.”

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What DID I find during that 6+ hours of research? …. Lots and lots and lots of interesting stuff.  And an idea for keeping track of it all. Now I can say that as part of the PPACA FAQ we’ll have an organized resource library to be unveiled as soon as it actually exists!

One of the most interesting essays I found is, “How the Affordable Care Act Will Create Perverse Incentives Harming Low and Moderate Income Workers“. I’m still reading through it (and the over 150 footnotes!) but I can already tell that it will be a very important reference throughout the course of this project.

It cannot be said often enough: Things do not have to be this complicated. We could be talking about the changes coming with Medicare for Everyone. Struggling to understand how the PPACA affects us is not what I expected from the 2008 election.

The case against increasing H1B Visas: the Wyeth-Pfizer massacre

I’m on a roll this morning.  I’ll have another post later today on the “Academia discovers everything that pharma goes on to exploit” myth and explain why, counterintuitively, this is a self-fulfilling prophecy.  But for the moment, I want to go over the reasons why business leaders are lying through their teeth about needing more highly skilled workers from other countries because the US simply does not produce enough {{rolling eyes}}.

First, I want to say that I worked with a lot of Chinese, Indian and European scientists and back in the 90’s, the US benefitted from an influx of foreign scientists and students, particularly Chinese and Russian emigres.  Most of them have since become American citizens so whatever provision is made in the immigration bills to displace them with cheap foreign labor is going to affect them as well.  I’m also aware of some Chinese students who had a hard time getting their PhDs because their advisors saw them as indentured servants who could be kept working indefinitely because the only alternative for them was to go home.  And then there were the Chinese scientists who only had work visas who were promptly sent home as soon as their companies laid-off, closed their facilities, etc, because the company itself had sat on their green card applications while the MBAs decided how they were going to restructure their R&D facilities for the 450th time.  There are a lot of sad and tragic stories from foreign researchers that I knew personally whose lives and families were not at all important to the companies they worked for and lost their ability to live in the country they called home, where they BOUGHT homes and had children and friends.  Some of these people had no choice but to leave all of that behind when they lost their jobs.  This country can be cruel to the best and the brightest, especially those from foreign countries but this country doesn’t spare it’s own citizens either.

Secondly, I have to bust the myth about the superlative skills of the foreign scientist. Not all foreign researchers are geniuses.  They’re a lot like other researchers.  Some are brilliant, some are hard-working, some of them didn’t realize what they were getting into before they had invested a good chunk of their lives in science.

So, that out of the way.

In 2008, Pfizer bought Wyeth.  Pfizer is a behemoth of a pharma company that has spent the last 10 years gobbling up companies, extracting their pipelines and spitting out the people who, you know, actually did the discovery.

After Pfizer bought Wyeth, it laid off all of the Wyeth research staff.  Yep, all of them.  Oh sure, a handful of the 19,000 people were retained and sent to Groton where Pfizer had a few holes to fill in their own ranks.  But there were thousands and thousands of scientists, Americans, Chinese, Russians, Israeli, you name it, who were laid off en masse for no reason at all.

It didn’t matter how good they were and I knew quite a few who were excellent and extremely hard working scientists. It didn’t matter what their performance evaluations were like. The lay off was indiscriminate and didn’t separate the wheat from the chaff. It didn’t matter how cheap they were.  They didn’t choose to live on the East Coast where the cost of living is extremely high.  A lot of them had been displaced by previous mergers and acquisitions from more affordable midwest facilities.  And it’s not like Pfizer was particularly choosey when they laid off.  It didn’t look at both companies and pick the best people to save.  No, it just picked the losing company and laid off all of those researchers without any consideration at all whether they were laying off the next blockbuster discoverer or not.   You’d think the board of directors and shareholders would have preferred Pfizer to be more selective but that didn’t seem to be very important and no one seems to have asked why that was.

All that mattered was THERE. WERE. TOO. MANY. OF. THEM. FOR. PFIZER.

Researchers cost money and research costs money and that was getting in the way of the people who were trying to make money off the acquisition so the researchers had to go.  Other labs might have been able to absorb all this excess talent but other labs were also shedding American and foreign researchers like there was no tomorrow so most of my friends ended up contracting, consulting, working for much less money in academia or small start up companies or getting out of science altogether.

So, verily I say unto you congresspersons who are about to flood an already flooded market with cheap indentured servants from other countries, you really need to stick an amendment into this bill that prevents companies that laid off thousands and thousands of experienced, well educated, highly skilled researchers from getting away with ruining the lives of those researchers, some of them foreign who they swear they need, and contributing to the collapse of the economy and housing markets in places like New Jersey.  It is time that companies who work here in the US who claim to be corporate “persons” to start acting like good citizens.

One last thing: there is simply no good excuse for Congresspersons and Senators to not check out the claims of the businesses who whine that they “can’t find good help anymore”.  All you have to do is get one of your congressional staffers to contact the departments of labor in New Jersey, Pennsylvania, Connecticut, California (San Diego area) and New York to verify that the unemployment rolls have been chock full of math and science majors who were laid off since 2008.  It shouldn’t take longer than a few hours in one afternoon to expose the truth.

Anything else is craven laziness that helps to depress the economy and further erode research in this country.  Researchers are not swappable, just-in-time, labor parts.  They’re individuals with specific knowledge bases who need continuity and support for their expertise to thrive.  Anyone who tells you differently is lying through their teeth.

I’m not an economist but…

…I read Krugman’s latest post on Conscience of a Liberal this morning about the recent actions of the Fed to raise interest rates.  I’m scratching my head over this one as well because the economy, as I see it, is still in the dumps and I’m still meeting plenty of people who think the economy sucks and unemployment is too high and self-employed people are hurting and it’s just pretty fricking awful all over the damn place.  So, I’m going to guess that the actions of the Fed are in response to something Wall Street is doing as they take advantage of The Market and everyone else in the world.  Are we experiencing another housing bubble? Are the hedge funds still accumulating foreclosed properties like there’s no tomorrow, driving up the cost of housing for everyone else?  I was lucky to get my house but I knew there were a lot of other offers on it and the only thing that gave me an edge is that I had cash and was an owner who was actually going to, you know, live there.

Anyway, I’m going to guess that there’s something afoot that I haven’t paid attention to that is on the Fed’s radar and since bankers, brokers, hedgies and the bonus class are the only people we bail out and go out of our way to not inconvenience, the rest of the world’s billions will just have to suck it up.  If our lives become even more difficult and strained, well, tough titties for us. We must not make it hard for the yacht owners to pay their kids private school tuitions or wives go without the underpaid au pairs for even one summer.  And since the vast majority of us do not occupy the ranks of the “not to be inconvenienced” group, it should come as no surprise that the consequences of the Fed’s actions on OUR lives is of no concern to it.  Of course, impoverishing the real market is eventually self-limiting and self-correcting, as Jefferson once wrote, but people will put up with a lot of shit before they throw the bastards out.

Or is there a political element to this strategy?  Is it still the plan to inflict as much suffering on average Americans as possible so that they will snap and take any measly short term relief in exchange for giving up whatever is left of the tattered social safety net?  If I were going to gut social security, this is not the way I would do it.  No, I’d wait until the economy was growing like Topsy and everyone was fat and happy and only then spring it on us that we’d have to give up social security.  But maybe these guys think Fear, Uncertainty and Dread will be more effective.  If we plunge back into recession because of it, will the Democrats catch the blame, along with all the bad stuff headed their way over Obamacare?  Time will tell.  But one thing is for sure.  The rest of us must still pay for the outrageously reckless behavior of a handful of selfish, greedy sociopaths.