The sick among the upper middle class will have more pain in their future

Senator Cassidy (R-LA) likes to talk about one of his constituents when he argues against the ACA. This family has $40,000 of health care costs every year and they don’t get any help to pay for those costs.

This is a real and growing problem.
The question is what policies improve or worsen the outcomes for families in this situation?

The Washington Post’s fact checkers chased down the family and their situation:

conservative talk-radio host named Moon Griffon. Cassidy invoked Griffon when he introduced the bill on Sept. 14….
Griffon used to get group insurance through an employer but then he moved and had to buy insurance on the individual market. He said he and his wife, a nurse, have a six-figure income, though “it’s not high but middle class.” They have two children: a 15-year-old son and a 20-year-old daughter who has seizures and needs to take four kinds of medicine.

There are a couple of ACA related items going on here. First, the family has a modified adjusted gross income of at least $98,000 and therefore they don’t qualify for subsidies. Secondly, they are keeping their daughter on the parent’s insurance. This is guaranteed by the ACA and was questionable pre-ACA. Third, their daughter has an expensive pre-existing condition but is covered.

They are paying too much for their insurance. And none of the policies that Senator Cassidy has voted for would improve their situation.

If the individual mandate is repealed the family is making too much money to qualify for subsidies still. The Congressional Budget Office (CBO) expects some healthier people to leave the risk pool. A sicker risk pool means higher premiums. Individuals and families who are subsidized are well insulated from the premium increases. The Griffon family would bear an extra 10% premium surcharge due to healthier people leaving the pool. They are worse off as they can get the same insurance at a higher premium.

Another Republican proposal is to split the risk pools by allowing for association health plans to proliferate as well as reintroducing limited duration plans with 364 day terms. In these cases, the new plans entire business model is predicated on effective cherry picking of low risk individuals. The Griffon’s daughter has an expensive and predictable disease. She would either be denied coverage or upcharged so that her premium would be more than her expected drug costs. The 15 year old might get a good rate and if the parents are in ideal health, they might see better rates although they currently benefit from the 3:1 age banding in the ACA and might be age banded at 4:1 or 5:1 in an underwritten policy.

Selling policies across state lines would not help the family either.  The entire point of the sell across the state lines pitch is that it is a regulatory race to the bottom.  Insurers would seek to set up shop in states that allow them to offer the skimpiest plans.  This is a good deal for people who are healthy but that is not the case for this family.  Skimpy benefits probably won’t be adequate for them.  Non-skimpy plans will only have sick people in them so that means premiums will be higher.

There are a couple of different policies that could help this family.  If states were to use 1332 waivers to fund reinsurance or prospective diagnosis based risk sharing, the index premium would decrease and premiums would be slightly more affordable for the family.  Medicaid buy-in programs could also help lower premiums as Medicaid tends to pay providers significantly less than commercial providers.

The critical question in any health financing system is how are the people with consistent and known high cost needs treated.  Are they left on their own?  Are they shunted aside?  Are they consigned to a life of poverty?  Or is there a system that counter-acts the bad luck that they have so the opportunity space is as broad and deep for them as it is for anyone else.

Right now the health policy proposals floating around Washington for the past year narrows opportunity space for many people including those who were mostly left out of the primary beneficiary groups of the ACA.

43 replies
  1. 1
    msdc says:

    Gosh, I can’t believe the conservative talk radio station doesn’t provide its employees with better health insurance.

  2. 2
    JPL says:

    It’s hard to be sympathetic to the family, when the dad is part of the problem. If the daughter qualified for medicaid, because of her age, would her father still rant against government involvement in health care?

  3. 3
    Buskertype says:

    assuming the 20 YO’s income is a lot lower than her parents, couldn’t she get subsidized insurance on her own? (not that this is a solution, but it would help)

  4. 4
    rikyrah says:

    Thanks for this, Mayhew.
    Hard to feel for the family, because they are so willing to be part of the problem.

  5. 5
    Honus says:

    Also, that they make too much to qualify for subsidies is part of the conservative republican belief that nobody should get anything for free if they can pay.

  6. 6
    Baud says:

    He said he and his wife, a nurse, have a six-figure income,

    Surprised to hear that a nurse works somewhere that doesn’t provide health insurance.

  7. 7
    Baud says:

    Also, has the annual out of pocket limit kicked in yet?

  8. 8
    daveNYC says:

    @Buskertype: Possibly, I guess. There’d still be a mess where unless she got ultra-platinum grade insurance, she’d still need mom and dad to pony up for the drugs, so that’d be income, but then it’s going to medical expenses which are deductible?

  9. 9
    Hunter Gathers says:

    Maybe if Moon Griffin got a real job instead of getting paid to bitch about Black people all day he’d have better insurance.

  10. 10
    Baud says:

    Since he’s a conservative talk show host, the other possibility to consider is that he is lying about his health care costs.

  11. 11
    dr. bloor says:

    @Baud: A lot of nurses work as independent contractors. It can still be more profitable than the salary + benefits that go with a staff job.

    As you also said, though, I’m interested in how they get to $40K without running into an annual OOP ceiling.

  12. 12
    OzarkHillbilly says:

    @JPL: While it is true that “the sons shall pay for the sins of the father”, I can feel for the children. Always. It’s not their fault Daddy is a dick.

  13. 13
    daveNYC says:

    @Baud: She could be part-time. There’s just too may variables and the wiki doesn’t give that many details.

  14. 14
    Baud says:

    Also, they should get to deduct medical expenses (not premiums) that exceed 10% of their adjusted gross income.

    https://www.irs.gov/taxtopics/tc502

  15. 15
    Matt McIrvin says:

    @Honus: They keep doing this–push back politically to make sure any social welfare or aid program has aggressive means-testing with perverse hard cutoffs, then use the stories of people who end up on the wrong side of the cutoff to argue that the whole thing is worthless and should be scrapped.

  16. 16
    OzarkHillbilly says:

    @daveNYC:

    so that’d be income,

    It would be a gift so the first $14,000 at least would be tax free.

  17. 17
    OzarkHillbilly says:

    @Matt McIrvin: And it works too.

  18. 18
    JR says:

    @Hunter Gathers: you win the day

  19. 19
    dr. bloor says:

    @Baud: If their income is in the $100-200K range, that’s going to be a pretty small clawback, and they won’t be able to do that going forward. If their income is bigger, they probably won’t get anything at all.

    I’ll bet he’s really thrilled about getting clipped by the mortgage deduction ceiling and elimination of exemptions under the new tax plan as well.

  20. 20
    Feather says:

    @msdc: It says that he lost his group insurance when he moved. That may be his problem. I know that my jobs have offered one set of policies if you lived near the home office, but others if you were further afield. But if his company offered insurance and the only variable was his moving, he should still get some set of subsidy from them, no? But also, isn’t the move where you lose your health I insurance the sort of “choice” conservatives are always telling us that people should take responsibility for?

  21. 21
    ThresherK says:

    @Hunter Gathers: No more calls, please. We have a winner.

    Also, a beverage of your choice says Moon Griffin believes tort reform will help.

  22. 22
    Nicole says:

    I read the article. It seems like, from the guy’s comments, that even if repealing the ACA doesn’t improve his situation, if it made the situations worse for lots of other people who don’t make as much money has he does, he’d consider it a win.

    It’s really hard to feel sympathy for someone like that.

    Also, in the comments, someone mentioned it sounds like he should have opted for a plan with a lower monthly premium but a higher out-of-pocket deductible. I’m curious about that- if he bought the best plan for his circumstances. Not saying he’s not one of those getting hit with ridiculously high costs (never mind he’d be getting hit with them in a pre-ACA world anyway), but it’s a reminder that it’s also really complicated to shop for health insurance and some consumers maybe aren’t going at it with as much information as they should have (or, he’s lying about his circumstances, which I would never put past a right-winger).

  23. 23
    Tom says:

    @JPL: It is possible to be very sympathetic to the family, especially the daughter, while thinking that her father is a total jerk. And I suspect that is the actual situation, as he stomps around the house raging about Obamacare while electing the very officials that seek to implement policies that will screw over his own child.

  24. 24
    Patricia Kayden says:

    @Baud: That is kind of odd. Hmmm.

  25. 25
    Lee says:

    I’ve got question about selling across state lines (sorry if this has been asked before). It is kind of backwards from the normal way of thinking about it.

    Just because an insurance company in State X can now sell policies in State Y, doesn’t that mean that insurance company will have to build out a network in State Y?

    I realize it is usually the other way around & that the insurance company already in State X will adopt State Y’s regulations and it will be a race to the bottom but many people refuse to acknowledge that problem. They do understand about insurance networks and a doctor being ‘in network’.

    So when discussing this with them I point out that the entire thing will never work because why would an insurance company in State Y want to build out a network in your state just to sell a few policies. If they then have the insight to make the jump to ‘well the insurance companies in my state will just sell under the regulations of State Y’, then I can point out that eventually every single insurance company will find a state with laws that will cover the least while charging the most. Usually they finally see the problem and they just mutter something like ‘well Obamacare still sucks’.

  26. 26
    Tilda Swintons Bald Cap says:

    “M-O-O-N, that spells asshole.”

  27. 27
    Ohio Mom says:

    One thing we don’t know is how severe the daughter’s seizure disorder is. If it is intractable, I imagine she could be eligible for SSI, which would also provide her with Medicaid. If this is so, and they are not taking advantage of this opportunity I have provided through my taxes, I have no sympathy. They can take the knife away from their nose.

    If it is under good control, I have no problem with giving her the standard Republican advice, which is she can choose to find a job with health insurance, lots of other 20 year olds earn their own way.

    This isn’t to say that I don’t recognize that the ACA still needs a lot of tweaking, and that there are families who are being left in dire straights. It’s just to say that I am fed up with Republicans like the Griffon family.

  28. 28
  29. 29
    Nicole says:

    @Ohio Mom: Yeah, I had questions about that, too. She’s 20; they’re not obligated to keep her on their insurance if her going out on her own would reduce their health costs, and if she’s unable to work, she’s going to need benefits eventually anyway.

    I feel like the WaPo did the minimal amount of investigating of the situation (though they did point out several times in the article that the ACA benefits thousands of folks whose financials aren’t as good as this families). I’m not talking about countertops, of course.

  30. 30
    What Have the Romans Ever Done for Us? says:

    I think the optimal solution for families in this situation is to allow some subsidy, even for the relatively well off, to cap their total annual out of pocket costs at a reasonable level. A family making six figures is doing reasonably well, but if out of pocket costs are $20K a year, which is the figure I’ve seen floating around, that’s potentially close to a fifth of their annual income and I could see how that would be perceived as onerous. Maybe it is technically affordable but more than that and it gets past that point and with premiums ever increasing, past that point seems inevitable.

    What’s irritating though is that all these guys on the right mention the problem, which is fine, but never offer a solution. I remember the right winger they have on weekly for commentary on NPR during the election bringing up the opioid problem as though the right wing has a solution, but they don’t. Same thing with escalating health care costs. And then there’s Paul Ryan railing against the economic ills being suffered by the middle class to sell a tax plan that would do nothing for them, and probably even make things worse. Don’t complain about the problem if you’re not going to propose a policy solution or are wedded to policies that would make things worse. They’re trying to create the illusion amongst uninformed voters that they have solutions when they don’t.

  31. 31
    ThresherK says:

    Finally, a healthcare poster child who has unassailiable plebian RealMerkan taste in countertops!

    Wait, we did send a stalker to his house to make sure they’re Formica, right?

  32. 32
    El Caganer says:

    @Tilda Swintons Bald Cap: Nice Stephen King ref. On point, too.

  33. 33
    gene108 says:

    @What Have the Romans Ever Done for Us?:

    Same thing with escalating health care costs.

    What is an interesting trick is they keep saying costs went up after Obamacare passed, as if we had stable healthcare costs prior.

  34. 34
    Cheryl from Maryland says:

    I don’t trust the quoted pharmaceutical costs. I know that BS/BC plans change from state to state and that my husband is lucky to have FEHB, but he is on a $2,000.00 a week drug that the plan makes us buy through their speciality pharmacy mail order. Cost, $35.00 a month instead of $8,000.00 a month. It is surprising that Mr. Griffin’s plan doesn’t have something similar. Or maybe it does, and he is paying full freight out of pocket for his daughter because his plan won’t cover it.

  35. 35
    Ohio Mom says:

    @Nicole: For that matter, Mom can go out and find a new job with good coverage.

    A lot of us put up with jobs we don’t particularly like, because we need both the money and the health coverage; my family is pretty much stuck here in Ohio because this is where my disabled kid’s Medicaid funding is. We can have no fantasies of spending our golden years someplace more enticing.

    The Griffons have a lot of options they aren’t availing themselves of. Yes, they are in a pickle but so are a lot of the rest of us.

    They aren’t that special, and to top it off, the Dad makes his living ragging on people who have greater hardships and fewer alternatives. Feh!

  36. 36
    Ohio Mom says:

    @ThresherK: It occurs to me that just as right-wingers have their version of deserving and undeserving poor, I have my version of deserving/undeserving to complain about stuff.

  37. 37
    Nicole says:

    @Ohio Mom: Yeah, and that’s the big thing- he changed his job situation, which is not something most of us have an option to do, BECAUSE OF HEALTH CARE. The very fact that he’s in this situation at all is due to his privilege.

    For the life of me, I can’t figure out why his wife can’t put the family on her plan, unless she works as a home health aide, not actually a nurse. Or maybe she’s a private nurse, but if she works for any kind of large medical facility, the insurance should likely include a family plan. I dunno. This whole story doesn’t makes sense, unless they’re both independent contractors. Which, hey, that’s great that they make six figures on independent contracting. Wish I did.

  38. 38
    Mike in NC says:

    Moon should have gone with the ultimate conservative healthcare solution and set his sick daughter adrift on an ice floe.

  39. 39
    Barbara says:

    @Baud: She might work part-time, or for a doctor’s office that requires her to pay full fare for dependent coverage. The point I take from this is that you can make $100K in the U.S. and still have trouble affording medical care. That’s crazy and we are crazy for putting up with it. But yes, she could join the legions of women who work for larger organizations just so they can get adequate health care coverage for their families. My sister did this, as did my sister in law. However, even larger employers sometimes require so much employee contributions for dependent coverage that a significant proportion of employees opt out of it.

  40. 40
    Another Scott says:

    @Barbara: Yup.

    And there’s the $1M/mo person in Iowa that Mayhew-Anderson has discussed a few times.

    Yeah, the guy is a brainwashed idiot. But the problem isn’t the choices he or his wife or his kids made, the problem is that there are (and will always be) people who have conditions that are very expensive to treat. Civilized, rich, societies have ways of treating such cases without bankrupting the family, and without transferring massive profits to individuals and companies that have created ways to capture monopoly rents.

    Eyes on the prize, folks.

    Cheers,
    Scott.

  41. 41
    Kelly says:

    @Barbara: My dear departed first wife worked at a doctor’s office back in the 1980’s where the health plan was Dr. Boss will take care of you and we have a cabinet full of pharm samples. It worked OK because everyone was young.

  42. 42
    artem1s says:

    No way does no lifetime limits and pre-existing condition survive if the individual mandate is removed. It’s a pipe dream and the latest GOP lie they tell the deplorables so they can eviscerate ACA one item at a time.

  43. 43
    Matt says:

    @Another Scott:

    But the problem isn’t the choices he or his wife or his kids made, the problem is that there are (and will always be) people who have conditions that are very expensive to treat. Civilized, rich, societies have ways of treating such cases without bankrupting the family, and without transferring massive profits to individuals and companies that have created ways to capture monopoly rents.

    Would be great to fix that, no doubt. First we have to get past the likes of Mr. Griffon yelling “OMG STALIN MAO FIFTY HILTERS” at the thought of government programs or regulations.

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