# Kaiser Foundation Calculator Out of Date

Bill Clinton has become the The Secretary of Explaining Stuff for the PPACA. Maggie goes on to explain to one writer why the Kaiser Calculator is out of date as the Healthcare Exchanges come on line with real pricing.

Bob

The Kaiser Foundation Calculator is out of date. They created it before any of the states had announced rates. So they were not able to accurately calculate subsidies because subsidies are based on the actual cost of the 2nd least expensive Silver plan in any given market.

You have to know what that premium is to figure out the subsidy. In addition, they are using their estimates of “national averages” as to what a Bronze or Silver plan will cost a person of a certain age with a certain income. Now that many states have announced actual rates, we are finding that they are significantly lower than expected.

For instance, in L.A. if a 30 year-old earning \$30,000 receives a subsidy of \$507, he could buy a Bronze plan (which covers everything a Silver plan covers) for just \$1341 a year–not the \$1902 you suggest.

In New York City (the most expensive insurance market in the nation for young people because we don’t let insurers charge older people more), he would receive a subsidy of \$2190 (because the benchmark silver plan that determines the subsidy is quite expensive. He could then take that \$2190 subsidy and purchase a Bronze plan for \$1506 a year. Can he afford \$1506? Yes.

Bob, I think you’re out-of-touch with how well a 30-year-old who earns \$30,000 a year is doing. He earns more than roughly 70% of Americans in his cohort ( 21-30) You’re looking at \$30,000 a year from the perspective of a 40-something. A 30-year-old male with that income is likely to be single and living in an urban area where he spends far less on rent/mortgage than a 40-year old would (I know this because my kids are roughly that age, one in NYC). He probably lives in a small apt. in a part of the city that is not a middle-class family neighborhood. His neighborhood is more commercial, surrounded by bars and restaurants with a decent night life (this is where he wants to be and very likely he shares the apt with someone [a girlfriend]). That cuts his rent in half. Depending on the city he lives in and the public transportation, he may or may not need a car. (A 40-year old with kids does) The 30-year-old earning \$30,000 spends much of his paycheck on eating out, ordering in, etc. He’s not yet worried about saving–he spends most of his paycheck every month. This is why he can afford to spend \$100 to \$132 a month for health insurance in two of the most expensive cities in the nation. He no doubt spends well more than that each month for beer, pizza, drinks with friends at local bars, and ordering in junk food. If he cooked dinner 1 or 2 nights a week, he could save enough to cover the premium (This is just one of many ways to economize–my point is only that he can afford \$100 a month.) .

And when you look at the actual rates in most of the country, after his subsidy he is likely to be paying somewhere between \$40 and \$80 a month for insurance. . I have written a post looking at actual rates for young adults and will be posting here on HealthBeat this evening. PLEASE Stop using and quoting the KAISER CALCULATOR. You wind up spreading misinformation.  The Secretary of Explaining Stuff  Maggie Mahar, Healthbeat Blog