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Thursday, September 26, 2013

One big problem in Obamacare

In general I support Obamacare. As a cancer survivor, I like being freed from the uncertainty of preexisting medical conditions. But let's be clear how badly Obamacare is about to hit people in their late 20s and early 30s. They are too old to be carried on a parent's medical coverage. Many of them are employed, but their jobs don't provide medical coverage. In the past, they've been able to get relatively affordable solo coverage through Blue Cross. Because people at that age are relatively healthy, the premiums were in $100 to $200 per month, depending on deductibles and co-pays.

But Obamacare imposes a maximum differential on the cost of a solo policy for a young person and a senior. As a consequence, solo rates for young people are about to double or triple. A solo policy for someone in the late 20s or early 30s is headed to $300 per month, or more.

Here's where the absurdity sets in. To qualify for a subsidy from the federal government against these higher rates, a person must earn a minimum income that is tied to the poverty level. That's right: if you don't earn the minimum income, you don't get any subsidy. Instead, your higher rate is probably unaffordable -- and consequently the young person is likely to drop the coverage that he or she had prior to Obamacare. This is exactly the opposite result of what everyone wanted. How perverse!

In theory, Medicaid is supposed to be available to persons who don't make the minimum income. But in North Carolina and other states, Medicaid is not being opened to people in this category. Why not? Because the states cannot afford it.

If you have a son or daughter older than 26 whose income is low, you're screwed.