When it comes to ACA (Obamacare) good many people have offered up the “can’t afford it” argument in various flavors, many of which center around “deductibles so high people cannot afford to use the insurance.” I wanted to explore this, because mostly it isn’t true, or at best it is only true for a tiny slice of the population.
As children we learn to say “I don’t wanna” and find out it only works some of the time. When we get older we learn to say “I can’t afford it” when we really mean “I don’t wanna” because it has a much higher success rate and some times people even decide to pay for it rather than listen to us continually say “I can’t afford it.”
First we need to identify the groups of people who “can’t afford it” when it comes to them actually buying a policy on the exchange. This group generally does not include people who are W-2 based employees for an employer offering health insurance as they are typically stuck with what is offered. True, some will opt to purchase their own insurance on the exchange and others will be forced to as various employers use ACA as an excuse to no longer provide health insurance so they can pay upper management even larger salaries and bonuses, but the bulk of the W-2 employees simply don’t fall into the groups.
Group 1: Everything for me should always be free
This was as close to a politically correct name for the group as I could come up with. When the very first exchange went operational with someone hitting the reset button on the computer each time the site crashed, there were many news shows about things other than the constant site crashes. One had this panel of doctors (I think it was CNN because I seem to remember Dr. Drew being on it) who were talking about how they had been on the phone all day calling up patients who had been on charity care via ER so they weren’t getting proper health care. Time and time again, even though the person was basically going to qualify for “free” coverage, they opted not to sign up. Why? Because they would have had co-pays for drugs and other things. Even though they were going to get a free ride on the insurance premium, parting with a few coins for co-pay was offensive and/or scary to them. They had _always_ gotten free care in ER and they didn’t want that to change.
These people have an educational journey which needs to happen. They will not sign up until there is no charity care.
Group 2: I make the system work for me
There is significant overlap here with Group 1. I split the two out because Group 2 has to do with intent. The current governor of Maine has been catching flak for his new test.
I understand the sentiment. In these parts it is called via many slurs. We have quite a segment of people who will own a $50+K boat and pull it with either a $30+K truck or a $50+K SUV (both of which get 7 MPG or less while towing) yet they manage to get on food stamps and other programs. When you get closer to the cities it is not uncommon to see people in a super market pay with (insert program card name here) then wheel everything out to a shiny new mega expensive luxury ride.
For this group, even one nickel of co-pay or deductible is too much because it takes away from their toys and life styles. These people are a problem which has nothing to do with the ACA unless one is a spin doctor fabricating some numbers against ACA.
Group 3: Ron White was right
You can’t fix stupid.
The immortal words of Ron White have never rang truer than when speaking of this very large group. From what I have seen these people are the bulk of those making the “I can’t afford it” claim. I know it is not polite to call people stupid, but there is no other accurate term.
My first exposure to this group came many decades ago while traveling for a contract and staying in some condo/townhome association. Management wanted to raise the assessment $5/month and people were up in arms. I kid you not. Another place I stayed was trying for $25/month for 2 years or something like that to pay for several of the buildings which had to get new siding. Wailing and shouting at meetings all screaming “I can’t afford it.” I had seen many of these same people at the various bars and eateries around the area. I was twenty something then so out all the time so when I say “saw” I meant “saw a lot.” Any given time I saw them they spent way more than $25.
You see, this large and festering pool couldn’t make ends meet even if they had all of Fort Knox’s reserves behind them. They haven’t got the tiniest clue how to manage money. They also have no concept of priorities. Here is a great link.
The average amount of credit card debt for people who have other debt (student loan, car payment, mortgage, other non-revolving charge debt) is $16,140. When you divide the total debt across all households it comes to $7,529 of credit card debt per household. That is debt accruing with “usually” very high interest rates and most of it was for nothing. Most of it was simply trying to live well beyond one’s means.
That $16K number was very telling. It was higher than the Maximum Out-of-pocket costs I found listed here.
You see, a credit card is _supposed_ to be used in a manner where it gets paid off each month. The only time a balance should exists is with unplanned things such as MEDICAL EXPENSES or a sudden mandatory car repair (not oil changes and brakes as those are cyclical.)
What I haven’t found, and perhaps someone can dig it up, is the per household total credit card limit. What I mean is if they have 3 cards each with $10K limits they would have $30K total.
When this group says “I can’t afford it” they should be required to finish the sentence “because I’m stupid.”
Before anyone says that is harsh and that these people “really can’t afford it” let me point out they managed to fill out enough applications listing enough income for credit card companies to extend them total credit limits north of $16K.
Personally, I believe it does not matter what income level these people are at, they will always leverage it to live well beyond their means.
Group 4: Recent grads
The ACA allows them to be covered under their parent’s policy until something like 26 and this provision was due in part to the current abuse of visa workers which are taking all of the high paying jobs so kids graduate with a pile of debt and end up stocking shelves at Wal-mart. This is on top of their parents being replaced wholesale by visa workers. Stories like these are common place.
A good many people don’t bother to actually think when they wail about how post menopausal women have to have a policy which covers birth control and pre-natal care and host of other child bearing years type coverage. It is because children can be added to the policy. This is especially important for women who waited until “now or never” to become moms. Adding a 20-something daughter to a policy which doesn’t cover any of that isn’t really providing them coverage.
Many recent grads don’t end up with traditional jobs that have benefits. Roughly 1 in 3 opt for freelance work.
Billing rates are being driven down by the mass importation of visa workers, including vacation visa coming here and working. Adding insult to injury most 20-somethings are pretty healthy and don’t think twice about getting health insurance. Why should they? The “tax” for not having health insurance is under $100. Thank the Republicans for watering that tax down. In order to work it has to be set to the median price of a gold policy for the full 12 months. Then it works, because you have to sign up for insurance to save money on your taxes.
The visa worker problem has to be addressed with the Ethics in Income Act so corporate executives feel a direct and personal connection to the bottom of their company’s wage scale.
Group 5: Walmart and fast food workers
Probably a couple of other job categories in here as well. In many cases, these people work for large corporations with policies of systematically exploiting them. In the case of Walmart they have decades of experience in shifting the cost of their employees to tax payers so upper management can be paid an extra $10-$20 million.
Lest we forget making low wage workers work for free.
This group is truly being exploited by multi-national corporations with billions in revenue. Many/most of them are on multiple forms of government assistance costing tax payers $6.2 billion in 2014.
The only people who actually fall into the “I can’t afford it” class exist in this last group. Yes, there is overlap from the recent grads group because many end up in this group when all of the jobs they qualify for are filled by low wage visa workers.
Once again, this isn’t an ACA problem, it is blatant worker exploitation and it has to be solved with the Ethics in Income Act capping total executive compensation, both direct and indirect, to 100 times the lowest paid worker anywhere in the publicly traded corporation.
