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Millions of People Could Benefit from Obamacare

Summary:
Millions of People Who Could Benefit from Obamacare Don’t Because They Don’t Know About It, and Neither Does the New York Times Center for Economic and Policy Research, Dean Baker. I and others have written about the PPACA multiple times over since it came out and has been improved repeatedly since its introduction. Lets start with the subsidy cliff which was at 400% FPL. President Biden changed the law on it allowing higher incomes to receive subsidies beyond 400% FPL. It was changed again shoetly afterwards and the law is in effect through 2025. Briefly: The Inflation Reduction Act (IRA), passed in 2022, has effectively extended the elimination of the Affordable Care Act (ACA), Obamacare subsidy cliff through 2025. This significant change

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Millions of People Who Could Benefit from Obamacare Don’t Because They Don’t Know About It, and Neither Does the New York Times

Center for Economic and Policy Research, Dean Baker.

I and others have written about the PPACA multiple times over since it came out and has been improved repeatedly since its introduction. Lets start with the subsidy cliff which was at 400% FPL. President Biden changed the law on it allowing higher incomes to receive subsidies beyond 400% FPL. It was changed again shoetly afterwards and the law is in effect through 2025.

Briefly: The Inflation Reduction Act (IRA), passed in 2022, has effectively extended the elimination of the Affordable Care Act (ACA), Obamacare subsidy cliff through 2025. This significant change ensures that the subsidy, which assists individuals and families in affording health insurance, is calculated based on a percentage of their total income, rather than adhering to a strict income limit. Prior to this, individuals or families earning 400% of the Federal Poverty Level (FPL) or more would abruptly lose eligibility for subsidies. However, under the updated provisions, those with incomes at or above 400% of the FPL can still qualify for a subsidy in the form of a premium tax credit (PTC), provided their health insurance premium exceeds 8.5% of their income. This PTC is now designed to phase out gradually as income increases, replacing the abrupt ‘cliff’ with a more gradual reduction in assistance. This change aims to make health insurance more affordable and accessible for a broader range of income levels, preventing a sudden loss of subsidy for those just exceeding the income threshold.

This is one issue people are confused about. Prof. Baker goes on to identify other issues in his brief commentary. One of them is the news media.

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Most people don’t keep up on the details of government policy. This is understandable because they have lives to live, and can’t spend all their time following the structure of various government programs. However, it is unfortunate when their lack of knowledge prevents them from using a government program that could benefit them greatly.

This is true of the Affordable Care Act (ACA) which created health care exchanges that allow tens of millions of people to get insurance with large subsidies. Many people who could benefit from these subsidies, which in many cases cover the full cost of a policy, don’t take advantage of the exchanges because they don’t know about the subsidies.

Apparently, this ignorance applies to New York Times columnists and editors. A New York Times column trashing the Biden economy (a regular feature of the paper) told readers about benefit cliffs that many moderate-income families face. The story is that many people lose Medicaid, food stamps, or other benefits when their income rises above certain thresholds.

While this is a real problem, the specific example given in the piece is not.

“A helpful starting point would be to address benefit cliffs — income eligibility cutoffs built into certain benefits programs. As households earn more money, they can make themselves suddenly ineligible for benefits that would let them build up enough wealth to no longer need any government support. In Kansas, for example, a family of four remains eligible for Medicaid as long as it earns under $39,900. A single dollar in additional income results in the loss of health care coverage — and an alternative will certainly not cost only a buck.”

There are two problems with this story. First, a family of four would almost certainly be eligible for the CHIP program, which in Kansas provides health insurance for children for families that earn up to 250 percent of the federal poverty level, which is $78,000 for a family of four.

The other problem is that this family would be eligible for a full subsidy for a silver plan (middle quality) in the exchanges created by the ACA as long as their income was under $45,000. Even with an income of $60,000 a year, they would only be paying $1,200 a year for their insurance.

It is unfortunate that people who could benefit from the Obamacare exchanges often don’t. If our country’s leading newspaper could be bothered to give correct information, maybe there would be fewer people in this category.

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