When she signed up for coverage for herself and her son in October, the Washington state O-Care exchange quoted her a monthly premium of $169 after subsidies. Wonderful, she thought, and dashed off an e-mail to O congratulating him on his policy triumph. He read that e-mail at his presser in late October in the Rose Garden, back when Democratic panic was around DefCon 3 rather than the DefCon 1 it’s at now. Meanwhile, back in Washington state, his correspondent was receiving new letters from the state O-Care exchange — which, mind you, is supposed to be one of the better functioning systems in the country.
Sanford said she received another letter informing her the Washington state health exchange had miscalculated her eligibility for a tax credit.
In other words, her monthly insurance bill had shot up from $198 a month (she had initially said $169 a month to the White House but she switched plans) to $280 a month for the same “gold” plan offered by the state exchange.
Rate shock, part one. But then came the sequel:
Last week, Sanford received another letter from the Washington state exchange, stating there had been another problem, a “system error” that resulted in some “applicants to qualify for higher than allowed health insurance premium tax credits.”…
The result was a higher quote, which Sanford said was for $390 per month for a “silver” plan with a higher deductible. Still too expensive
A cheaper “bronze” plan, Sanford said, came in at $324 per month, but also with a high deductible – also not in her budget.
Her problem is both simple and complicated. Read this Washington State Wire post for the complicated part. The first erroneous premium quote was due to — surprise — the feds and the state not having their act together in calculating subsidies. The feds were expecting each applicant’s annual income; the state gave them each applicant’s monthly income. That led to a massive overestimate of how much taxpayer money each applicant was entitled to. The second bad quote came from poor advice given by the state itself: They encouraged her to enroll her son, who has ADHD, in the state Medicaid program, but they didn’t tell her that that meant he couldn’t be counted towards her federal subsidies for her ObamaCare plan. After the second adjustment, she was entitled to no subsidy at all. The Kafkaesque result, per CNN: “Now I have been priced out and will not be able to afford the plans you offer. But, I get to pay $95 and up for not having health insurance.”
That’s the complicated part, although don’t confuse “complicated” for “unanticipated.” When you remake one-sixth of the country’s economy, you’re destined to have lots of screw-ups and inefficiencies even with a competent administration in charge. As it is, we’re stuck with people who pegged the success or failure of the country’s biggest domestic reform in 50 years to their ability to build a functioning website and, despite three years’ lead time and hundreds of millions of dollars available, still couldn’t do it. On the other hand, though, the issue here is mercifully simple: New plans on the exchange simply cost too much for lower middle class people. Obama and the insurance industry needed the new plans to be more expensive than the old “cut-rate” ones in order to fund the de facto subsidy for covering preexisting conditions; that’s a burden that the upper middle class and, with great effort, the middle class itself can bear, but for lower middle class people who make slightly too much each year not to qualify for subsidies in paying their premiums, the Affordable Care Act ain’t all that affordable. It’s Obama’s misfortune that he chose the letter from this woman, of all people, to tout at the White House as evidence that the program was working. He’d have been much better off picking someone who was very poor and unquestionably entitled to a subsidy as a showpiece.
Update: Speaking of misfortune, when it rains, it pours.