401 percenters face sticker shock of higher premiums without subsidization

Earlier this year, I blogged about a potential backlash against the individual market reforms of the Patient Protection and Affordable Care Act emanating from what I dubbed the 401 percent – those who earn too much to qualify for advance tax credit subsidies for plans purchased through the state health insurance exchange marketplace. Subsidies are offered in six sliding scale tranches ranging from households earning 100 percent of the federal poverty level to 400 percent. Those with incomes above 400 percent must bear the full cost of the premium.

Now that some plan issuers are issuing plan year 2014 premium rates for comprehensive coverage that per the ACA must now include 10 categories of “essential health benefits,” some of the 401 percenters in California are experiencing predicted sticker shock. Today’s Los Angeles Times has the story. Here’s the money quote:

Although recent criticism of the healthcare law has focused on website glitches and early enrollment snags, experts say sharp price increases for individual policies have the greatest potential to erode public support for President Obama‘s signature legislation. “This is when the actual sticker shock comes into play for people,” said Gerald Kominski, director of the UCLA Center for Health Policy Research. “There are winners and losers under the Affordable Care Act.”

There is a saving grace in this for self employeds who earn too much to qualify for a subsidized exchange plan. They can take a federal income tax deduction for premiums paid.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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Frederick Pilot

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