Rich Sitko can’t wait to buy a new health insurance plan. Sitko, 64, from Essex Fells, now has an indemnity plan from Aetna for which he pays $1,178 per month with a $2,500 deductible.New Jersey residents (and people across the country) are experiencing a "sticker shock" as they investigate plans on the exchange. Not only are plans more expensive then expected by they come with deductibles much larger than they assumed.]
He believes he will find a less costly option on the new health insurance exchange — the online marketplace created by the Affordable Care Act.
His new plan, he said, will still most likely cost close to $10,000 a year and won’t have any of his doctors in network. To get a plan similar to the one he has now, he’d actually have to pay more money.
Under the new law, individuals must pay a penalty if they do not have health insurance unless the cheapest available plan would cost more than 8 percent of their modified adjusted gross income. The federal government deems any plan that costs more than that "unaffordable."Taking a look at the plans on the New Jersey exchange finds that residents who are in their 50s and 60s are confronted with Obamacare insurance which is unaffordable using the bill's 8% guideline.
For example, a 60-year-old in New Jersey won’t find an individual health insurance plan on the exchange for less than $600 per month. Anyone who earns between $45,960 — the level at which subsidies stop — and $90,000 would be exempt from the penalty because the federal government considers that unaffordable.Sadly this would be not be a surprise to those who wrote Obamacare. Its name, The Affordable Care Act is actually a misnomer. In the end the purpose of this bill is to make sure those who don't have heath insurance can have it, no matter what effect the bill has on those who already have healthcare.
Two 60-year-olds shopping for a family plan will pay almost $14,000 annually for the cheapest plan. Their income would have to be about $178,000 to meet the government’s "affordability" test. That’s more than twice the median household income for New Jersey residents ages 45-64, according to the U.S. Census.
Plans on the exchange are based on metallic tiers — platinum, gold, silver and bronze. The cheapest plans, the bronze, often pay only 60 percent of medical costs and have deductibles that are more than $2,300, putting them beyond the reach of many New Jersey families. Those who do not meet the "affordability" test are eligible to buy catastrophic coverage on the exchange, where plans are typically about $100 cheaper per month. Premiums are based, in part, on age. The older you get, the more health insurance costs because insurance companies believe older people are a greater risk for expensive care.
As Ed Morrissey explains in his most recent column in The Week
Thanks to the ACA, we have the worst of both worlds. Some consumers now have to pay enormous premiums for coverage they can't access until they pay enormous out-of-pocket expenses, while insurers have to cover even more risk, and providers have to deal with even more red tape. When voters start paying through the nose in this system, they will soon recognize that the administration's ideas of reform are as workable in real life as the ObamaCare exchange website.