How Obamacare affects you

Rates have come in from the four insurance carriers choosing to participate in the new health insurance exchange to be opened Oct. 1 in Arkansas under Obamacare.

The big story is that, most likely, those premiums will have nothing to do with you. There is no news there.

Please keep reading, though. This matter needs to be better understood, meaning understood at all.

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If you have a job with an employer-based group health plan that existed before 2010-which would put you in about 40 percent of the state’s population-then your company plan is grandfathered and you may proceed normally without regard for these tables of exchange rates.

If you are a senior citizen on Medicare, then you also will proceed normally with a combination of government insurance and a private supplemental policy not relevant to these tables of exchange rates.

If you are poor-below 138 percent of the poverty level-then you are going to be insured through these exchanges, though not with your own money, but with the federal government’s.

That’s under the peculiar Arkansas “private option” model for Medicaid expansion. This subset makes up about half of the 500,000 people in Arkansas-that’s out of 3 million, thus a sixth-who will be eligible for the exchanges.

If you are that rare individual buying your own personal health-insurance policy through this exchange, then you will get federal subsidies to bring down these rates if you earn less than $45,960.

If you are a family of four buying your own health-insurance policy through this exchange, you will get federal subsidies to bring down these rates if you earn less than $94,200.

So what we have done there, you see, is steadily winnow substantially the real-world application of the Arkansas Obamacare exchange rates.

We’re down to a small segment of the population making too much for subsidies but buying health insurance individually.

I know at present of only one gentleman who will buy individual health insurance from this exchange without subsidy, owing to the blessing of a decent salary, and who will see his inexpensive high-deductible health savings account converted to a plan in this exchange with a near-tripled premium.

That’s because of his advanced age.

He’s in that no man’s land-60-ish but not yet to Medicare. And the money he’s been putting aside to take responsibility for his own high deductible is now needed directly by the insurance carrier to help cover the general population’s costs for cover

age of pre-existing conditions.

But he’s only one guy, and he’s a noble soul who favors Obamacare anyway.

Even he gets to keep his inexpensive health savings account without tax penalty for one more year. And it’s conceivable the exchange rates to come out next year will be reduced or at least arrayed with more cost-sharing options. The key economic point of all this is that Obamacare’s direct financial impact turns out to be limited in Arkansas-kind of minimal, in fact.

The key legislative point is that the private option will not cost the federal government much more, or any more, than direct Medicaid expansion would cost. So there’s no reason for the Legislature not to vote again next year, and the year after, and so on, to continue this innovative plan.

In fact, the best way to keep these rates competitive is to keep these four carriers, and add to them. And the best way to keep them and add to them is to keep offering these quarter-million customers under the private option.

The remarkable political story is that you haven’t heard much crowing about these rates from right-wing obstructionists and extremists.

The legitimate debate that remains is whether the federal government can afford this Medicaid expansion and these subsidies.

And obviously it can’t unless-over time-the new breadth and depth of health insurance gets people healthier and reduces our massive public costs of uncompensated care and leads to a general leveling of the otherwise exploding cost of health care.

The next policy steps should be these: We need to keep moving toward new methods of paying for medical services, such as singularly for conditions and good results rather than individually for every service, on which the Beebe administration has taken a national lead.

And we must advance consumerism and cost-sharing-deductibles, co-payments, health savings accounts-to try to keep premiums affordable to the government and the individual while guaranteeing that catastrophic coverage is certain and sound for all.

In a sane world, Republicans would give up this nonsense of shutting down the government, accept Obamacare and take the lead on improving it and implementing the vital next reforms.

Alas, the world of American politics is not sane at the present time.

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John Brummett’s column appears regularly in the Arkansas Democrat-Gazette. Email him at [email protected]. Read his blog at brummett.arkansasonline.com, or his @johnbrummett Twitter feed.