Obamacare -- Even Better Than I Expected for My Family

I completed my New York Obamacare insurance application yesterday. So did this Obamacare booster get a rude awakening?

Not. For two adults and two kids, we got a $500 deductible and $15 primary care visits (and $8 generic drug costs), paying a total of $250 per month.

Now, this incredible result has a few caveats that make it a bit unusual and may not repeat with quite this good a deal in future years for our family -- but it still reflects how much more affordable Obamacare has made health insurance for most families.

  • First, when you switch into a health plan part way through the year, any income from a job you just left for the year does not count in calculating yearly income, so our subsidies were boosted for this year. This makes sense since you don't want to hold a high previous income against the newly unemployed or those with a now lower salary, but it does create a temporary bonus for transitioning workers.
  • Secondly, I have self-employment income so I can reduce our adjusted family income through increasing 401(k) contributions shifted from other savings, so that increases the health care subsidies. This reflects our poorly designed pension subsidy system, but Obamacare does create a massively greater incentive for moderate income families to save.
  • Third, New York has extended its Childrens Health Plus coverage (CHiP) up to 400 percent of poverty, so we only had to purchase a couples insurance plan on the exchange, then pay a bit more per kid for the CHP coverage. That was especially important for us, since our main pediatrician was not on any of the cheaper exchange plans, but was on a number of the CHP plans.
  • Still, the plan we have is the kind of plan available to all moderate income New Yorkers and to slightly higher income New Yorkers like our family transitioning to new ventures in the middle of the year. That seems to me an unqualified reason to celebrate the success of Obamacare.

    There is still the problem of a ridiculously large drop in subsidies as people move toward upper-middle-class incomes (i.e. crossing the 400 percent of poverty line). In NY, that means not only seeing the last of any subsidies disappear but you also lose access to the CHP program. If our adjusted annual income was in that range, we would have been paying more like $1,300 to $1,500 per month for a family plan, probably with a higher deductible. Still far better than what existed in the individual market in the past, but that means that a gain of something like $30,000 to $40,000 in income would lead to the loss of something like $12,000 in subsidies yearly -- that's equivalent to something like a 25-33 percent tax on additional income on top of regular payroll and income taxes.

    The answer is to improve subsidies for moderate income families and stretch them out to higher income levels to make the marginal tax changes less onerous. Or better yet, transition to a single payer system and just collect premium costs through the regular progressive tax system.

    That said, we are incredibly relieved and happy that Obamacare delivered so well for our family. And did I mention there was even a cheap dental plan available for the adults on the exchange (the kids are covered for dental by CHP)?