We’ve talked about the Copper plans being proposed by Senator Begich (D-Alaska) and others earlier this year. The basic thrust of the policy is the following:
Right now, minimal essential coverage for people over the age of 29 and those not facing a hardship is a Bronze plan. That plan covers 60% of the average expected acturial cost. All Bronze, Silver, Gold and Platinum policyholders from a single company in a single state make up a unified risk pool. The metallic band plans are subsidized by tax credits. Minimal essential coverage for people 29 and younger is catastrophic coverage which covers less than 50% of the expected acturial cost. Catastrophic coverage has its own seperate risk pool and is non-subsidized.
The copper plan would be a redefinition of essential minimum coverage for most people from 60% actuarial value to 50%. This is a 16% decrease in expected coverage value, and it is getting insurance to the point where it is truly hit by the bus coverage. The 16% decrease in coverage will probably lead to an 18% to 20% decrease in premium pricing if the pricing differentials between the same insurer/same plan design Bronze-Silver-Gold-Platinum hold up. To get that decrease in actuarial value, the maximum out of pocket levels will increase from the current $6,350 to between $8,000 and $10,000. It is a trade-off between lower guaranteed monthly payments and the possibility of much higher oh-shit payments. That is a legitimate trade-off for insurance.
Erik Loomis, at Lawyers Guns and Money, in service of making the larger and correct point that there was never 51 votes in the 2009-2010 Senate as it was for high acturial coverage, low monthly premium insurance for all or at least all citizens and permanent aliens, points out the Copper plan as evidence that there is a significant caucus for making insurance worse. However he makes a point that I think needs significant modification.
“a significant percentage of the Democratic caucus is looking to fix the ACA by making it a lot worse for poor people. “
We need to divide the analytical universe into three segments. I think only one segment would be significantly worse off, one would be in a series of trade-offs in a larger option space, and the third would be untouched.
Let’s get to the easy one first.
People who are buying their insurance on the Exchanges and are receiving federal subsidies won’t change their decisions all that much as long as the subsidy anchor point is the second cheapest Silver AND the expected personal contribution for a given income level stays constant. If we define poor or working poor as people making under 200% of the Federal Poverty Line, the subsidies are rich enough on the premium side of the equation to make Silver very affordable AND Silver has the cost sharing assistance subsidies that makes a 70% actuarialvalue plan jump to either an 87% actuarial value plan or 94% actuarial value plan. The working poor who get their insurance on Exchange can save $30 or $40 a month in premiums but see their deductible go from $500 to $9,000. I don’t think this makes people want to choose Copper as they did not choose Bronze last time around.
The segment where Copper is a toss up are the people who bought their insurance on the Exchange with minimal to no subsidy. The May 2014 data says that 17% or 18% of people bought on the Exchange without subsidy. 5% of the Exchange policies were no-subsidy Bronzes and another 2% were Catastrophic which can not receive subsidy. This is the market for Copper. People buying no-subsidy Bronze and Catastrophic plans were buying minimal coverage. Cheaper but skimpier minimal coverage could be appealing. People on Catastrophic might see a better deal with subsidized Copper for slightly higher deductibles.
I am not a big fan of high or very high deductible plans for most people. The one situation where they are appropriate is when the buyer has no pre-exisiting conditions, fairly young and can quickly access the entire deductible for the year without destroying their future. When we looked at why the Americans for Prosperity (AFP) anti-Obamacare ads sucked so much last winter, we identifed two groups of clear losers. One of them would benefit directly from Copper:
Young single males with absolutely no health problems, no relatives with health problems and incomes over 250% Federal Poverty Line that previously had a $42 a month, $25,000 deductible plans that did not cover maternity or mental health needs. Those policies got cancelled and they actually have to buy good insurance. Young guys making under $25,000 a year usually will get decent subsidies, past that, it is hard to be sympathetic to someone bitching that they (a member of a high accident group) have to buy decent insurance.
Copper does not quite get the 24 year old guy with a $50,000 a year job and no employer provider health insurance back to where he was pre-PPACA, but it would improve his lot. And as long as Copper pays into the general risk pool, this could be okay from a system’s perspective. That is a small group. I would guess 1% to 3% of the Exchange population would take a serious look at a Copper plan as we know the rest of the non-subsidized population valued high actuarialvalue coverage over low premiums, so some of the Bronze buyers would stay at Bronze as that would be the best they could afford.
Now the last segment is one that was not really in play in 2014. This is the segment of employees who work at large companies which want to offer the skimpiest plan that they can get away with to dodge the employer mandate penalties in 2015. These people, especially the working poor who have minimal leverage, would be getting screwed.
Right now the employer mandate is going into effect 1/1/15 for companies that employ more than 100 FTEs. Anyone who works, on average 30 hours or more per week, must be offered a qualifying health plan that costs, for single employee coverage no more than 9.5% of annual wages. If a person is offered that coverage but declines it, they can buy coverage on the Exchange without subsidy. If affordable and adequate coverage is not offered, the employer is fined in the following manner:
The annual fee is $2,000 per employee if insurance isn’t offered (the first 30 full-time employees are exempt).
• If at least one full-time employee receives a premium tax credit because coverage is either unaffordable or does not cover 60 percent of total costs, the employer must pay the lesser of $3,000 for each of those employees receiving a credit or $750 for each of their full-time employees total.
The most common route that I’ve been seeing for large employers to expand coverage has been to set up a seperate Bronze plan for their non-full timers where the payroll deduction is 9.5% of the check. The company then pays the remaining premium. This coverage has a$6,300 out of pocket limit and the narrowest HMO network out there. It is hit by a bus coverage. Someone in an Expansion state making under 138% of FPL is better off on Medicaid, and anyone making between 100% or 138% FPL to 250% FPL is better off on a cost-sharing Silver plan, but the subsidy lock was designed to keep the employer sponsored coverage market from unravelling at an unseemly pace.
If Copper qualified as minimal essential coverage for the Employer Mandate, what I think would happen is that the seperate Bronze plan would be downgraded to a seperate Copper plan with no other changes. The payroll deduction would still be the lesser of 9.5% of salary or total premium, with the company kicking in even less money to cover the rest of the premium. The coverage would have a $9,000 out of pocket limit, the narrowest HMO network available and be even more unusable. It would be more expensive and less useful for the working poor as it is hit by the bus and then run over by the ambulance coverage.
I could see Copper being a useful policy on the individual market if it was solely aimed at the current non-subsidized Bronze/Catastrophic buyers who are in good health and decent financial shape. If Copper meets the minimal essential health benefit for Employer Mandate purposes without a significant drop in the total employee contribution limit, it would be a disaester for the working poor, and should be opposed.
to start, i would think for the most part that the word ‘helluva’ should be put in front of ‘lot’. in fact, ‘the ACA’ can be replaced in that sentence with almost any other issue you can think of.
Wow, this has me really concerned. My son works for Panera. We live in Virginia and right now he has a silver plan on the exchange. It costs us (we pay for it) $44.00 per month in premiums. If this gets changed to what is essentially a bronze plan, I don’t know how we will afford it. This seems crazy to me that his employer could foist a plan with an out of pocket max of $6000.00 per year on someone who earns just around $12,000 per year. Am I misunderstanding something? He has a health condition that requires daily medication and periodic doctor visits.
Richard – I want to thank you for all the posts on Health Insurance because they are so very helpful.
I am dismayed by the thought of companies moving employees onto this proposed copper plan.
If the Republicans roll up big enough majorities I think we can look forward to the new “Feces” plan for the poor.
Why not, instead of a “copper level”, allow a premium buy-in to Medicaid. It seems to me that Mcaid provides a pretty basic level of coverage already, why re-invent the wheel? I’d even let employers buy-in to the Mcaid program. Allowing healthy, employed, uninsured people to buy in to Mcaid would have to actually lower the per capita cost of Mcaid, since its current population is disproportionately old, unemployed, and unhealthy. Healthcare providers are already used to the Mcaid system, even though they bitch about it, and it covers a lot, if not all, of their cost. Believe me, I spent 15 years in healthcare administration, running all kinds of programs, the Mcaid payment rates are challenging but manageable in a not-for-profit setting (personally, I’d effectively outlaw most for-profit healthcare.)
One other thought: if you made this access to Mcaid contingent on expansion of Mcaid, it might drag a few more states into expansion.
I don’t think Republicans are going to roll up big majorities. I think women and minority voters will come through, even if white males are a lost cause. GOP might take the Senate, but it will be slim.
I look forward to our being able to write newly re-elected Senator Begich to tell him just how awful his proposed Copper plan is.
You might want to become more familiar with the word “actuarial”, lest anyone think you don’t know what you’re talking about when you keep spelling it funny.
@Paul Gottlieb: there is always the veto — I am not too worried about the basic plans getting worse until 2017 at the earliest
@Jerry O’Brien: thank you!
Okay, I had not considered that employers could consider copper plans to be qualifying coverage and jack up the deductibles for others. That’s a pretty huge concern.
@Sasha: Nope. Welcome to the new America, bought to you by the insurance companies and high finance, aided and abetted by Democrats, Republicans, and the suckers who keep voting for them.
I have no doubt that corporate America, especially those of the Walton-esque type, will be all over getting this copper plan passed so they can further screw their low-income workers; it will be done under the banner of “fixing Obamacare”.
In the early 1990’s I lost my career in geology and suddenly dropped to 1/5th my prior salary. I couldn’t afford the COBRA rates my ex-company was offering so “hit by a bus” insurance was all I could get. My experience then was that you never, ever went to the doctor for anything because you couldn’t afford it; if hadn’t been for Planned Parenthood I’d be dead of cervical cancer by now. Begich is pushing “Bronze” to get re-elected, and helping destroy the lives on the US underclass in the process.
I’m baffled by the ACA. I’ve been baffled. I remain baffled. I see no possible end to the bafflement. I’m told it’s a great thing for many people. so I’m all for it, but I’ve spent hours on the phone with CoveredCA, getting different answers to the same questions, and spend $600/month, and still have no real clue if I’m doing the best thing for my family.
@Sasha: Pardon my bitterness above. It is, of course not just insane but cold-heartedly brutal and inhumane beyond belief that anyone, much less both political parties, would sign off on such a “kill the poor” plan and say “but, but…they’re covered!” I feel bad for your child. What a fucked-up world he’s getting.
I’m particularly bitter about this because my work offers two choices of insurer: Kaiser or United Health Care. We’re a small business. I would REALLY like to get off Kaiser. Sometimes they are good, most times mediocre, and sometimes they are disastrously, fatally bad. But when UHC pops up with a $2,000 out-of pocket before they start paying any benefits at all, and a $10k out of pocket max per year, well…the first makes it more or less a “catastrophic” health care policy, as while I make a lot more than your kid, $2k hurts…a lot. As to a $10k out of pocket per year, well, again, I’m in much better position than your kid but a $10k hit to the pocketbook in one year would probably mean my wife and I would lose our home. White people problems? Yeah, kinda, we have a home to lose and most here in SoCal aren’t nearly so fortunate…but was this the point of insurance reform, that you’d only be staring at losing the results of twenty years of hard work and tears to stay healthy?
Again, that is not reform but down-punching brutality.
I’m a big enough guy to admit with shame that we were totally sold a bill of goods here. I thought ACA was a good idea. It may well not have been. Will I go out and start voting GOP? Ha, fuck that. I ‘m a pragmatist and ALWAYS vote for the lesser of two evils. But the Dems sold us out good here, it’s their bill 100% and I’m not going to forget that when American needed a life preserver, they threw us a two-by-four and a pamphlet of swimming instructions. Better than the anvil the GOP had ready…but not much.
Because that would cause Republicans (and many Democrats) to admit that there are, indeed, some good government programs. Not gonna happen.
@gussie: During this open enrollment period, I’m sure you’ll be able to come across more than a few community resources which will allow you to sit down with someone and discuss the plans with you in order to help you understand if you are getting the coverage you need at the price you are able to pay.
During the first enrollment period, I was amazed and shocked at how much information wasn’t available. Things have gotten a lot better. Having a face to face meeting with someone who is either a local caseworker or other trained person is often the best route instead of playing phone tag with people who you don’t even know or know their credentials.
The proof, of course, will be in the pudding. If you look at Social Security when it was initially passed, it wasn’t that good a deal either, but Congress worked to make it better over the years.
The difference now is that we have a Congress where majorities on both sides seem committed to making the ACA worse instead of better. The Democrats’ performance on this and many other issues has really made me reconsider any loyalty I have to the party, even the limited loyalty of a someone more closely self-described as a “liberal independent.” I hate to abandon the party altogether, but if, for example, Cuomo and the like are the best the party bosses can come up with, then what’s the point?
@Keith G: That’s a good idea, thanks. A lot of the problem is me, frankly. Not only because my eyes glaze over the minute someone says ‘out of pocket max’ or the like, but because my income went from $6000 last year to $120,000 this year, and will turn into $25,000 next year, probably. So I’m in and out of subsidies and plans three times a year. Right now, I’m just paying BCBS directly. I think. My kid’s still getting MediCal paperwork from earlier, though I told them he’s not eligible at the moment…
Call one of your local hospitals and see if they have any Health Navigators on site, or if they can refer you to one. If your situation is complicated (and it sounds like it may be), it’s probably best to sit down face-to-face with a human being to go over your options. California seems pretty dedicated to making PPACA work, so you should be able to find someone to advise you.
@C.V. Danes: Right there with you. They’ll get my votes for now, for as I said above, first and foremost I am utterly a pragmatist; Republicans, since 1980, have always been the worse choice in every election. Always. And third parties, as St. Nader showed us in a lesson he surely did not intend to teach, are nothing but electoral suicide.
But after giving away the nation’s economy and future to the banks, privatizing every school they can get their hands on, and now gutting the ACA, well, my reluctant vote is all they’re going to be getting. If they want more they’ll have to do more.
You know that you can buy your own insurance on the exchanges, right? You can’t get a subsidy, but you are legally allowed to tell your employer, “Sorry, your insurance choices suck,” opt out of their coverage, and buy your own on the exchange. Check CoveredCA.com and see if you can get a better deal.
Unfortunately, you’re “reluctant vote” is all they need to keep moving the country to the right. I wish that people would wake up, but history has shown that we will need to go much further down the rabbit hole, possibly even ending the experiment altogether, before things change for the better. At some point you have to stop fighting the stupidity and allow it to run its course.
@Mnemosyne: I have been tempted to look at that option myself, since the healthcare options at my company have taken a turn for the worse. But paying the full price of an ACA package may still be cost prohibitive.
You won’t know unless you look. :-) I get very good insurance at the Giant Evil Corporation, but I took a look out of curiosity and there did seem to be some good options there, depending on your area.
The Copper Plan is a lousy idea. Thanks for explaining it, Richard.
Yeah the great part about PPACA is it lets you keep your current plan whether you like it or not. I wish Wyden’s amendment had passed.
As I noted above, if your employer offers lousy insurance, you are not required to take it. You can reject it and buy your own on the exchanges. You’ll lose out on the subsidy that people who don’t have an employer-based option can get, but you absolutely don’t have to take your employer’s crappy insurance.
@James Hare: which Wyden Amemdment, as one that did pass (Wyden Waivers) is going to be a BFD in the second half of 2015/all of 2016 for 1/1/2017 waivers to allow states to do whatever the hell they want as long as the meet or exceed what is currently going on in terms of coverage and costs.