It looks like again in 2016 Melanie and I will be without health insurance because of the prohibitive cost of the misnamed Affordable Care Act (aka Obamacare). Not only will we have no insurance, but we will be taxed at a rate of 2.5% of our Modified Adjusted Gross Income (MAGI*) for opting out. Our expected MAGI of about $60,000 amounts to $1,500 being added to our standard income tax - which already includes paying the full amount of the Social Security tax**. What follows is a brief synopsis of our decision-making rationale. Bear in mind while reading that tens of thousands of Americans are making similar decisions nowadays. If you get insurance through your employer, you probably have no idea what self-employed people are going through.
I guess the grief is deserved though since I am obviously a 'rich' white guy living in an exorbitant 920 sq.ft. home, own one vehicle (no boat, motorhome, motorcycle, snowmobile, etc.), eat out about 5 times per year (4 of those times at McDonalds), and have taken exactly 2 vacations (3 days each) in the last 30 years. Oh, and I've never received a dime of unemployment, disability, or educational assistance (not a single government grant was available to me while earning my BSEE). I've never claimed bankruptcy or defaulted on a loan, either. Damn me!
Prior to 2014, we had a plan through Blue Cross / Blue Shield of Pennsylvania where the premiums totaled about $4,971 per year with a $7,500 deductible. Doctor visit co-pays were $35, some prescription medication was covered (don't recall exactly), and the plan paid out at an 80/20 rate starting at the first dollar spent.
Obamacare, depending on the plan you choose, does not pay out a penny until you have paid the full deductible, then it pays at a 60/40 rate. The screen captures below are options based on our expected income of about $60,000. The subsidy of $193/month decreases as income goes up, disappearing completely at around $64,000 meaning if we make $4,000 more than predicted, our plan cost will increase by $193x12=$2,316.
Basically, if we incur no major health expenses next year while going without insurance, our out-of-pocket savings will be $18,000 or more. We can rack up a lot of office visits and generic medications - even setting a broken arm or two for that amount. Both Melanie and I are in good health for people our age***, but if we do experience a major event, we will then opt into Obamacare.
By the way, Obamacare expenses are NOT deductible on your tax return. Obamacare does NOT include routine dental, eye care or hearing care. Also, note the emergency room and prescription drug coverage (or lack thereof) prior to the entire deductible being paid. Thanks to all my fellow Americans who voted for the people that did this to us.
Here are the screen shots that show the first three plan options and the last (the 30th) option available to us.
This is the basic personal information used by Healthcare.gov for calculating Obamacare costs for Melanie and me.
2016 Obamacare health insurance plans options for RF Cafe.
Again, there are 10s of 1,000s of people caught in this same dilemma where prior to Obamacare we had reasonable health care options, but now are paying a tax for the privilege of not paying for exorbitantly priced insurance. The promised 'typical' savings of $2,500 per family was demonstrated to be an unachievable lie from the beginning. For the record, neither Melanie nor I voted for any of the people responsible for this debacle. Those who did - about 54% of the population - have caused us and many more people an extreme hardship. We are all around you.
For fun, I entered the same information, except put in an age for me of 30 rather than 57. The cost went down to $288 per month, versus $403 per month. There is a clear example of age discrimination by the U.S. government.
I came up with a fallback plan in case something happens to me that might incur a large medical bill. Melanie is to remove all forms of identification from my person and drop me off on a downtown street corner, then call 911 from a pay phone to have someone pick me up. When/if I recover, I'll leave the hospital and find my way home. Another option is to learn to speak Spanish, then walk into the emergency room and claim to have just crossed the Rio Grande a few weeks ago, thereby assuring any required level of medical attention - even a kidney replacement if needed. Do I sound disgusted with how my country has treated me?
See also 2017 Obamacare Cost for RF Cafe
* MAGI, as determined by the IRS, is a cruel homonym of the Biblical Magi who came bearing gifts.
** If you are employed by someone else, you pay only half of your Social Security tax, and your employer pays the other half for you. If you are self-employed like us, you pay the full amount.
*** We do about 40 minutes of exercise every other day, eat healthily (child's portions, hence low weight), and avoid hazardous situations.
Posted November 24, 2015