A Letter of Warning to the Middle Class from a Massachusetts Taxpayer:
Demand the Public Option
The following is a letter I wrote two years ago, when Massachusetts' earliest health care reform measures were starting to take effect. Where possible and reasonable, I have updated the information to reflect the current state of the commonwealth and the nation.
The eyes of the United States are on Massachusetts. Nationwide, analysts eye our health care initiative as a model for broader reform. They want to know if this plan will work for the nation as a whole. Shuffling through overwhelming data, they examine the complications of this new system, its strengths and weaknesses.
Let me keep it simple for them. It isn't working. And the reason why it isn't working should serve as a sharp warning to anyone making between $33,000 and $50,000 a year: Demand real health care reform, including a public option, or you will have to settle for more of the same.
If Massachusetts is the microcosm, the testing ground, for United States health care reform, then I am its everyman. I'm single; I'm 28; I'm generally healthy.
In fact, I have advantages. I'm well-educated. I have a college degree from a prestigious private school. I work. A lot. I work as many as 5 different seasonal, part-time and contract jobs a year to piece together an income. I even enjoy those jobs, and I've worked hard to create opportunity for myself. I'm an active citizen; I believe in contributing and making one's voice heard. And I'm not alone. There are hundreds of thousands like me in this state, and we should be able to get by.
And yet I've spent the first few years of my adult life struggling to stay out of the welfare system when it comes to my health. I've jumped from one type of health insurance I couldn't afford (and didn't use) to another. Sometimes, I simply couldn't pay the premiums and went without. Now, I don't have a choice.
The goal of the new health care laws is simple: every citizen must purchase health insurance or pay a penalty. Accordingly, the state is to provide affordable options for its people, based on their income. The deal even includes an expert-created affordability chart that measures, income bracket by income bracket, what each citizen can reasonably afford to pay for health insurance.
You can imagine my excitement at the concept. After staring for years at the choice between $500 monthly premiums or inadequate coverage, sugarplum dreams of $100 per month quality health plans filled my head. I would be able to work health care into my budget. Massachusetts was a leader and an innovator, and I was ready to enroll in a health care plan I could afford.
I kept my eye on the developing plan. I watched the Commonwealth's health care web pages on a weekly basis. I was tired of struggling just to afford to stay healthy. I wanted in.
I found I was still distinctly on the out.
There is a gaping hole in the state's new health plan, and it begins at an annual individual income of $30,630*. At this point -- three times the federal poverty level for an individual -- income ceases to matter and someone who makes over $30,630 is essentially left to fend for himself.
To clarify, imagine two fictional individuals, Sue and Joe. We'll give Sue the larger income. She makes $30,631 for the year. Joe makes $30,629. For those who didn't major in math, that's a $2 difference in income. But it puts Sue over the magic $30,630 mark, and Joe under.
Joe qualifies for the program known as Commonwealth Care, which provides him high quality health care options at an affordable price. It's a program for anyone who earns up to three times the federal poverty level, which is our magic number -- $30,630 annually. Joe can pay a premium of ~$130 monthly (~$1,560 a year) for a plan with $5 co-pays when visiting his doctor, $10 co-pays when visiting a specialist, $50 emergency room visits and prescription drug coverage ($5 generic) -- and he won't have to pay more than $250 a year beyond his premium for medical services. The most Joe can possibly pay for standard health care, including his prescription drugs, his medical services, and his insurance premiums, is just over $2000 a year. That's about 6.5% of his income -- tops.
Sue is less fortunate. Because she doesn't qualify for Commonwealth Care, Sue has to find her own insurance. Luckily, the state provides what is known as Commonwealth Choice. Sue can go online and browse discounted plans to keep her healthy.
To her surprise, when Sue arrives at mahealthconnector.org (home of Commonwealth Choice), no one asks about her income. She inputs her family size (1), her zip code and her occupational code. She arrives at a series of plans. The cheapest plan is $167.40** a month ($2008.80 per year). That's already 6.5% of her income. That's already as much as Joe could possible pay all year for all health expenses.
It isn't a very desirable plan, either. It requires that she pay $25 to see her doctor, $100 to go to the emergency room, and it doesn't help her at all with any prescription drugs. It even has a $2,000 deductible that Sue will have to pay before she starts receiving benefits in most situations. And the plan's $5000 out-of-pocket maximum for the year is misleading -- it doesn't include what Sue pays for doctor visits or prescription drugs, as well as certain other services.
That's the cheapest plan available to old two-dollar Sue. It means that if Sue got sick, her state-sponsored insurance plan would still require that she pay $5000 out of pocket, plus $2008.80 in premiums. That's over $7,000 -- a whopping 19% of her annual income -- and it doesn't include prescription drug coverage.
Sue is confused. She only made $2 more than Joe did. And yet, because she has bypassed the $30,630 mark, she is in health care hell. She still can't afford health insurance, but now she is supposed to buy it. She should have bought some cigarettes under the table instead -- and gotten her annual income below the magic number.
But what about the affordability schedule? Remember that? That was the magic chart that tells us what the experts determined we could afford -- the very experts who helped put together this initiative. It can help Sue avoid penalties -- it could be Sue's saving grace. She scrolls back and looks at the chart. How much do the experts tell Sue she can afford per month in health insurance premiums?
Here's the surprising news. According to that chart, the most that a person of Sue's income can afford to pay a month is a $150 premium.
Sue's eyes bug out. What? She's only deemed able to afford $150 a month in premiums?
Then why is the cheapest plan available to her on the same web site $167.40 per month?
She should be baffled, because it's not just her. The Commonwealth Choice plans are rated in four categories: bronze without prescription, bronze, silver and gold. Only 3 of the 14 silver- and gold-rated plans (the plans with reasonable coverage) available from Commonwealth Choice are affordable to someone with an income under $50,000***. How do I come to that conclusion? By using the commonwealth's own affordability schedule. That's right: the commonwealth is offering plans it says itself you can't afford.
The good news for Sue (and others) is lukewarm. Because the commonwealth has determined that she can't reasonably afford Commonwealth Choice, she won't be penalized on her taxes. She's free, instead, to look about on her own for more health insurance she can't afford, or simply to go without. Sue's back where she started.
But Sue and Joe are fictional characters. What about a real life example? Let's use, oh, say . . . me.
Last year, I turned my back on my workplace health insurance. It was available for around $235 a month. At the time, that was 14% of my paycheck at that job. I couldn't afford it, and neither could others with whom I worked. Besides, health care reform was coming, and I just knew something cheaper would be available to me.
This summer, I reluctantly enrolled in one of those Commonwealth Choice plans the state admits I can't afford. I paid $224.26 a month in premiums alone ($2,691.12 a year, or 8% of my total income). I had to pay an additional $25 to see my doctor or $40 to see a specialist. I paid over $100 if I had to go to the emergency room and 30% of any outpatient surgeries. It didn't include prescription drug coverage.
Luckily, my out-of-pocket maximum was $3000 for the year and there was no deductible. Still, if I got sick, I could pay as much as $5,700 this year for health costs. That's 17% of my total income. Like Sue, I'd be out of luck.
In fact, I've already felt the squeeze. This summer, trying to be preventative in my health habits, I had a mole examined and, upon recommendation, removed. It cost me, even with insurance: $25 to see my doctor, $40 to see a specialist (upon my doctor's recommendation), $25 to see a surgeon (upon the specialist's recommendation), and a total of $246.50 to have the surgery. In addition to the $1121.30 I've spent on five months of premiums, my health has cost me $1,457.80 in the last five months. That's 13.5% of my income during that time period -- and I haven't even been sick. For comparison, I also spent 13.5% on food.
The commonwealth affordability chart was right. I can't afford Commonwealth Choice. A year after turning my back on $235 a month for decent health coverage, I'm returning to the fold and enrolling with my workplace. I still can't afford it, but at least for $10 more a month, I get decent coverage.
In a very real sense, I am right back where I was before all of this reform took place.
Maybe I sound familiar: a single individual who makes between $30,630 and $50,000 a year; someone who wants to work and contribute to the culture he lives in; someone who, unable to afford this new initiative, is still without a solution to his health care needs.
Do you want to know if this plan can work for America, or even Massachusetts? Look at the thousands upon thousands of middle-income individuals here trying to do the right thing.
The nation's eyes are on Massachusetts. The nation's eyes are on me. And without a real public option, I will still be on the out.
We will all still be on the out.
*The number is now $32,496.00.
**The cheapest plan is now $220.88 a month, or $2650.56 per year. It is exactly the same as the plan described in the text of the letter (except $600 more expensive), but includes prescription drug coverage -- at 50% cost after a $100 deductible.
***There are now no options for "bronze without prescription." More importantly, only one silver plan, and none of the gold plans, are now affordable as measured by the commonwealth's 2007 affordability schedule.
