What “Obamacare” means to Charlestown

Health exchanges will help uninsured, self-insured and small businesses find affordable coverage

I plugged the average private sector salary for Charlestown into the
new RI Health Exchange website to figure out how much health
insurance would cost for a family of four.

By Will Collette

If you already have health insurance (Medicare or Medicaid, through your employer or union, or as a retiree), the October 1 start-up of the new health care exchanges under “Obamacare,” more correctly called the Affordable Care Act, will not directly affect you.

However, if you are uninsured or if you are paying for your own coverage, this latest phase of the law can mean big changes for you. Positive changes.

According to Lieutenant Governor Liz Roberts, roughly one out of every nine Rhode Islanders - 110,000 people - are currently uninsured.

Even when the federal government shuts down on October 1, you will still be able to start to pick an insurance plan that fits your needs. 

HealthSourceRI, Rhode Island’s state-run “health exchange,” will be up and running. The health exchange is basically an on-line shopping service that will allow you to pick a plan that meets your needs and then find out what it will cost you.

Almost 70% of working Rhode Islanders do not have health insurance

By coincidence, HousingWorksRI just issued its annual report on affordable housing and that allowed me to look up Charlestown statistics to get the average income for Charlestown residents who work in private industry.

I used the HealthSourceRI calculator and plugged in Charlestown’s average annual salary for a Charlestown head of household working for a private company. The average for Charlestown is $39,884. I assumed a family of four with two adults and two children.

After plugging in the numbers, I hit "calculate" and here are the results:

The likely monthly premium for this Charlestown family of four would be $750 a month. 

Subtracting the $588 tax credit under the Affordable Care Act, this family would pay $162 a month for coverage.

The maximum out-of-pocket cost for coverage would be $4,167 per year.

Almost 50% of the uninsured live in the South

In addition, the two kids may qualify for coverage under Rite Care, which would reduce this family’s cost a lot more. Rite Care is Rhode Island’s managed care Medicaid program. 

Rhode Island was one of the states that chose full participation in the Affordable Care Act including the option to expand Medicaid eligibility, the cost of which is covered almost entirely by the federal government.

Ironically, the conservative "Red" states of the South and West who chose to reject "Obamacare" either by simply letting the federal government handle its implementation in their states or, as in the case of Texas, Florida and Georgia, to actively obstruct the program, also have the highest rates of uninsured citizens. 

So these right-wing politicians could make their political point, whatever it is, their own citizens were screwed in large numbers.

Let’s say you’re a single adult, again earning Charlestown’s average income for private industry work of $39,884. Your monthly insurance premium would be $375, minus $59 in tax credits for a monthly total of $316.

The other important feature of the health exchange is choice. Although the law now requires you to get insurance (or you will pay a penalty on your taxes), it offers you a range of choices that allow you to tailor your coverage to your needs.

The calculations above are based on the “bronze” or basic plan that has higher deductibles and co-payments. It’s a pretty good choice for persons in good health who don’t need a lot of medical care.

This is the Republican alternative to Obamacare

People who have more health needs perhaps due to chronic health conditions or age, may find that it works out better for them to pick a plan with a higher level of benefits. You would pay a proportionally higher premium, but get it back through lower co-pays and deductibles.

Don't forget - under a section of the "Obamacare" law that has already gone into effect, insurance companies cannot deny you coverage or discriminate against you due to pre-existing health problems.

The new health exchanges will also provide new opportunities for small business owners. This is one aspect of the new law that has stirred up a lot of controversy – you’ve probably seen some business people on TV saying they can’t afford to provide health insurance or that they hate this new law and saying they’ll do whatever they have to do to avoid offering coverage, including laying workers off or cutting their hours.

Most of what you hear these business owners say is wrong. In fact, the new law will provide an opportunity for small business owners to offer affordable health coverage to their workers on terms even they can live with.

Here’s how HealthSourceRI describes the options for small business owners:

“If you’re a small employer, HealthSource RI makes purchasing health insurance less confusing. Our Full Employee Choice lets you pick a plan for employees according to the amount you’re willing to spend per person. Your employees then select the plan that best meets their needs.  If the plan they choose is more expensive than the one you offered, they pay the difference. If it’s less expensive, they pay less.  You write one check and your employees have access to 7-day-a-week support.

“If you employ fewer than 25 full-time workers, offering affordable health insurance may qualify you for tax credits. The credits are worth up to 50% of your premium contribution in 2014 if you’re a for-profit business, and 35% if you’re a nonprofit organization.”

The system created by the Affordable Care Act is a lot more complicated than it would be if we had enacted a system like most other industrialized countries, like Canada, Britain, France, etc. where there is one “single-payer” source of health care coverage. Medicare is also a good example of a viable “single-payer” system that we’ve had in place for almost fifty years.

Lots of people – myself included – would have preferred a “Medicare for all” system, but nature of American politics being what it is, we’re lucky to have gotten “Obamacare” enacted.

Even though Obamacare was watered down by compromise, this new system is going to cover most of America’s uninsured, will save a lot of money for millions of individuals, and will save a lot in health care costs. While some Republican members of Congress want us all to hold our breaths until we turn blue, I think for many Americans, will benefit including a lot of folks right here in Charlestown.