Healthcare Insurance Coverage Information

The Kaiser Family Foundation has put up  comparisons of one new way (if passed) to obtain healthcare coverage and two existing ways of obtaining healthcare coverage (subsidized coverage) for those who lost job-based health insurance since in the Covid-19 pandemic. I had talked about two of the ways previously.

Options

The two existing options (besides over priced Cobra) are:

• Medicaid, for which 47% of those lacking insurance are eligible (Kaiser’s estimate) and,

• ACA Subsidized Marketplace Coverage, for which 31% may be eligible dependent on income.

A third possible option alluded to above is the subsidization of 100% of the cost of COBRA (now 65% subsidized of cost of employer sponsored healthcare) premiums as provided in the House  HEROES Act recently passed. This new bill could win some Republican backing in the Senate even with McConnell blocking it and calling for a stipulation to be inserted in the bill to release companies, providers, hospitals, etc. of liability. As written, the Heroes Act would be a windfall for employers, healthcare providers and insurers as well as individual recipients. The first three pluses favoring Republicans are likely to support.

Comparisons

To compare, COBRA and Medicaid are similar in provision. Both pandemic available options would be zero-premium in almost all cases (a few states have imposed premiums on higher income Medicaid enrollees). The tradeoff between the two plans being the employer sponsored insurance typically has larger provider networks and a higher deductible and out-of-pocket costs while Medicaid’s has zero-to-minimal out-of-pocket costs and fewer insurance company options.

The average actuarial value determined by Kaiser)  of an employer-sponsored plan is 85% and is designed to cover 85% of the average enrollee’s medical expenses. The average deductible in employer-sponsored insurance is $1,655, and the average out-of-pocket maximum for individuals is about $4,000.  The actuarial value for Medicaid is effectively 100% or close to it.  Medicaid is a much better deal for taxpayers as company sponsored insurance plans (including self-funded employer plans) pay almost twice Medicare rates. When compared to Medicaid plans rates, employer plan rates are several times higher in costs than the costs of Medicaid.

The Lesser Plan

The clear loser when comparing costs in the comparison of all three is the ACA marketplace coverage. For most of those who lost job-based coverage, it requires higher premiums (which are zero in the other two options), higher out-of-pocket costs, and provider networks often as narrow as Medicaid’s. The $600/week extra unemployment benefit provided for up to four months by the CARES Act which is allowed for Medicaid or Cobra (it is not counted as income) is counted as income in the ACA Healthcare Marketplace Subsidy calculations.

If you are still fumbling around trying to decide, the HEROES Act has not been passed by the Senate yet so it may be a while before it content becomes available. If you are in a Medicaid expansion state, you are probably eligible as long as income is <138% FPL. If not, than it is <100% FPL Otherwise, there are the ACA Healthcare Exchanges. Some sites for more detail:

Medicaid For All Who Want It, Pandemic Edition, XPOSTFACTOID

Key Issues Related to COBRA Subsidies, The Kaiser Family Foundation