The Obamacare Cost Gap

Political  Calculations
|
Posted: Nov 03, 2013 12:01 AM
The Obamacare Cost Gap

Assuming you actually could buy health insurance coverage on the state and federal government-run Obamacare exchanges, how much would you have to pay before you could actually benefit from having the insurance?

That's an important question to answer, given the high premiums and even higher deductibles that apply for even the most affordable health insurance options being sold through the government-run marketplaces. In addition to paying your monthly premiums, you will also have to burn through your policy's deductible before your health insurance will begin covering a significant portion of your health care expenses.

That creates something that we'll call the "Obamacare Cost Gap", which is the difference between how much of your health care bills that you would have to pay before your insurance coverage begins to kick in, and the amount of the potential additional income tax that you would have to pay if you had no health insurance coverage at all.

How much is your Obamacare cost gap? Well, we've built a new tool where you can find out! But before you use it, we'll ask you to first use our tool that can estimate both your annual subsidy tax credit and also the amount of additional income tax that you will have to pay if you choose not, or cannot buy health insurance in time to avoid a higher tax bill in 2014.

Then, just enter those numbers into our tool below along with the other indicated information. We'll take care of the rest!...

Click here to access a working version of this tool!

Our default data in the tool above is taken from our default example at our Premium or Penalty Tax tool, and applies to the situation of a single woman working in a part time job in California who is losing her employer-provided health insurance coverage as a result of the changes mandated by the Obamacare law.

What these results make clear is that she can expect to pay quite a lot of money before she might gain any meaningful benefit from having health insurance, even if she opts for the lowest cost, least coverage-providing Bronze plan available to her.

Keep in mind that under Obamacare, one of the big benefits that the law's supporters like to tout is that all health insurance policies will provide one annual checkup per year with no additional out-of-pocket cost. So you know how much that benefit is actually worth, the Department of Health and Human Services reported in 2008 that the average amount paid by Americans for an office visit with their physician was $199.

Meanwhile, the same report indicates that the cost of an outpatient physician visit at a U.S. hospital averaged just $1,275, often in connection with surgery. The average cost of a physician visit in the emergency room was $922.

In an upcoming post, we'll take on the question of just how high your health care expenses have to be to really benefit from having health insurance coverage!