The controversial ad about Bain Capital, a former steelworker, and his uninsured wife deserves some of the criticism it's received. The ad implies something its supporters cannot prove and raises one argument that its supporters may not believe.
But let's focus, one more time, on the broader policy question about health care, because that’s what should matter when Americans vote in November. In particular, let’s assume that Joe Soptic’s wife could have turned to the Affordable Care Act, the law that Obama signed and that Romney has pledged to repeal. Would she have gotten coverage, providing financial security and, just maybe, allowing early detection of the cancer that eventually took her life?
I would like to tell you that the answer is yes. The real answer, I think, is somewhere between maybe and probably. The law's purpose is to help people who can't get coverage on their own and, for the most part, it will do that well. But reaching people with this particular economic profile will likely depend on the wording of a regulation that the administration has yet to finalize.
To recap what we know about Joe Soptic and his wife, from published accounts based largely on his recollections: He lost his job at a steel mill when Bain shuttered it in 2002. She lost her job two years later. He eventually found work as a custodian and that job had health benefits. But a family policy would have cost $350 a month, more than he felt he could afford on an annual salary of about $25,000. He took out a less expensive policy covering only his medical expenses. She remained uninsured.
Now imagine that this happened while the Affordable Care Act were in place. Adjusting roughly for inflation, Soptic’s income’s income works out to $30,000 in today's dollars and the monthly family premium becomes about $425. If you do the math, you’ll see those premiums would represent about 14 percent of Soptic’s annual income. Under Obamacare, if your employer offers insurance but the insurance costs more than 9.5 percent of income, then it is “unaffordable” and you are eligible to get insurance through one of the new insurance exchanges. In the exchanges, you can buy a policy that covers pretty much any service you'd need, puts a limit on your out-of-pocket spending, and—this is really important—makes you eligible for tax credits that offset the premiums.
To get some idea of how this would work out financially, you can try out an online calculator that researchers at the University of California-Berkeley have created. Using figures for two 55-year-olds, coverage on the exchanges would be available for about $150 a month, or about one-third of the price that Soptic found available through his job. The maximum out-of-pocket costs with such a policy would be $4,000 a year. We can debate whether even that $4,000 is too onerous, but it’d clearly be a lot better than what he and his wife ultimately had available back in 2005. Case closed.
Except, ugh, it's not closed. There are going to be cases where a family policy costs more than 9.5 percent of income but a single-only policy costs less than 9.5 percent. Soptic’s case might have been one of those. (It's impossible to know without other information.) What happens then? In particular, does the law then consider the plan “affordable,” meaning family members can’t get insurance through the exchanges? The statute itself isn’t entirely clear. The Treasury Department must ultimately issue a regulation setting out the exact standard, but it hasn’t done so yet. (Yes, this is one more reminder that a single-payer system would have been easier to implement, if only it could have passed Congress.)
The administration has a way to solve this problem. When the Treasury Department issues its final regulation on affordability, it could say that, in cases like the one Soptic described, employees must get coverage from their employers but family members can get coverage from the exchanges. A recent briefing paper from researchers at Berkeley outlined how such a regulation would work. Washington and Lee University Law Professor Tim Jost, who knows the law as well as anybody, thinks the Obamacare text gives administration plenty of flexibility to embrace it. Consumer advocates are lobbying hard for it, noting—among other things—that about half a million kids won't get coverage if the administration doesn't make this adjustment.
But whether the Treasury Department will go along remains to be seen. Many in the administration are sympathetic, according to several outside sources, but lawyers are still debating what the statute will allow. Also, opponents of the Affordable Care Act are sure to pounce on any change as proof that the law is flawed, even though these sorts of problems are common in complex legislation. If I had to bet, I’d say the Treasury Department will endorse the solution I described above, or at least something like it. But I can't say that definitively and neither can the sources I've consulted.
The underlying policy reality is unambiguous: The election presents a choice between a president who fought to make health care available to nearly all Americans and a challenger who has pledged to undo that accomplishment. Whether the specific story of Soptic's wife happens to illustrate that remains unclear.
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