Nov. 2: Subsidies blunt premium increases

Nov. 2: Subsidies blunt premium increases

Most Americans receive health insurance through their employer or from the government through Medicare or Medicaid.

Most Americans receive health insurance through their employer or from the government through Medicare or Medicaid. For those who do find a plan on the individual market through the healthcare.gov exchange, average premiums for next year are projected to be up 25 percent nationwide. Still, the vast majority of these folks won’t be paying more for their plans since federal subsidies rise in tandem with premiums. The Advocate’s Ted Griggs reports that in Louisiana an average Blue Cross premium could increase by as much as 41 percent but most will be shielded from the premium hikes.

In Louisiana, 81 percent of consumers who buy coverage through the online federal health insurance marketplace can find plans with a premium of less than $75 per month, and 84 percent can find plans with premiums of less than $100, according to the U.S. Department of Health and Human Services.

Thomas Huelskoetter provides some ideas that could help stabilize the marketplaces in Real Clear Health:

 

  • Creating a “guaranteed choice” public option plan as a fallback in order to ensure choices for consumers, especially in rural areas where there may be less competition.
  • Expanding the ACA’s premium tax credits and cost-sharing subsidies to improve affordability for consumers.
  • Enhancing the ACA’s stabilizing mechanisms by improving the risk adjustment program and encouraging states to create their own reinsurance programs.
  • Forbidding insurers from selling exclusively outside of the exchange, or requiring all individual market plans to be sold through the exchange.
  • Expanding Medicaid, for states that have not already done so. In states with Medicaid expansion, marketplace premiums are 7 percent lower on average due to a healthier risk pool.

 

 

Unaffordable child care

Many parents cannot afford child care and are left with difficult decisions about how to arrange care for young children when they need to be at work. Not surprisingly, the unaffordability of child care affects low-income families the most. U.S. Secretary of Labor Tom Perez provides analysis on the Department of Labor blog:

However, low-income families on average spend approximately four times the share of their income on child care compared to higher-income families, and in 38 states, the average cost of center-based care for an infant alone is over 10 percent of the median income for a two-parent family. An Economic Policy Institute analysis found that for a family with two kids, ages 4 and 8, child care is more expensive than rent in 80 percent of geographic areas analyzed.

Leigh Guidry of The Advertiser also looks into the high cost of child care and recounts some stories of Louisiana families:

For Jamie Docter, of Pineville, the cost of child care for more than one child made some life decisions for her family. They chose to put off finishing her bachelor’s degree in social work with only 30 hours left. “We did the math when we only had two kids,” Docter said. “The difference in pay between a part time job I do from home and the highest paying registered social worker position in the area after child care for two kids meant that I would be bringing home $30 less a month to work full time and put my kids in daycare.”

 

What millenials want

A recent poll of millenials – the generation born between the early 1980s and late 1990s – showed that economic stability is a primary concern. The survey found that millenials believe in a role for government in handling economic problems, though they feel it too often stacks the deck in favor of the rich and powerful. Respondents also voiced support for family leave, affordable child care, and a higher minimum wage. Hannah Finnie and Simran Jagtiani break down the results for Generation Progress:

Millennials believe that the single most important goal for the nation’s economic future is to create an economy that works for everyone, not just the wealthy few. They value economic opportunity over economic equality, and the chance for everyone to get ahead. Millennials accept disparities in outcomes, but not in opportunity: a majority believe everyone deserves a fair shot to succeed, but that the deck is stacked in favor of the rich…While Millennials support the influence of the government within the economy, they want a government that works for average people, and their perception is that the system is rigged in favor of the powerful. They believe politicians give special privileges to big businesses and the wealthy, and want progressive legislation to make education more accessible and reform the tax code so the wealthy pay their fair share of taxes.

 

Income/Rent gap widens

Rents rose faster than renters’ income in 2015, according to new data from the U.S. Census Bureau. The results highlight the importance of investments in affordable housing. Alicia Mazzara, a Research Analyst at the Center on Budget and Policy Priorities explains:

The large gap between household incomes and housing costs creates serious rental affordability problems for many families. Three out of four low-income renters pay over 30 percent of their monthly income for rent — the federal standard of affordability — and don’t receive federal rental assistance.  (Low-income renters are those earning 80 percent or less of the local median income.) Families who pay too much for housing are at risk of overcrowding, housing instability, and homelessness.

 

Number of the Day

84 – Percentage of Louisianans who are able to access a health insurance plan on the federal exchange that costs less than $100 per month. (Source: U.S. Department of Health and Human Services via The Advocate)