Affordability Exemptions and the Cost of Healthcare

Can I get an Affordability Exemption on 2018 Medical Plans?

The Affordability Exemption uses the cost of insurance rather than the cost of healthcare. Companies profit hugely from our healthcare system. People don’t.  Healthcare itself is becoming increasingly unaffordable.

Affordability is based on a percentage of household income, either 8.05% 0r 9.56%, and affects both employer and non-employer coverage.

The family glitch and the increasingly unaffordable cost of care given high deductible insurance are sources of most of the complaints we have seen on our site about the ACA. In fact, affordability under the Affordable Care Act might be said to be the single most problematic part of the law.

The Affordability Exemption allows a household to have coverage that is judged to be technically affordable but is expensive due to an employers failure to offer adequate contributions for spousal and dependent coverage. Because of this, families might be exempt from the fee, but not be eligible for cost assistance or other subsidies that would enable them to have health insurance.

One aspect of the Affordability Exemption that has become increasingly problematic is that it applies only to insurance premiums. Insurance companies have been quick to provide “affordable” plans. According to KFF, the number of low-cost, high deductible plans on the market has tripled in the last four years. Unfortunately, many of those have deductibles that are so high that insured people cannot afford medical care.

Under the present law, many people assume the entire out-of-pocket cost of their care without ever reaching their deductible limit. Medications can be thousands of dollars a month; lab tests are very expensive and might be over-ordered; doctor’s visits are increasingly expensive; hospital care is astronomical. It is not uncommon for Americans to be unable to pay for medical care even if they are technically insured.

The topic of affordability should have been addressed and fixed this year. Instead, the government debated the repeal of the ACA, and nothing was done to address the law’s most glaring issues.

Note: For more detailed information on calculating the exemption percentage, please see our page, Affordability Exemptions and the Family Affordability Glitch.

For more about affordability and healthcare, please see our pages, Why isn’t Health Insurance or Care Affordable? and Are all Americans Spending More on Health Insurance?


Author: Linda DeSolla Price

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