Previously, this blog pointed out that public opinion polls are primarily a measure of the effectiveness of propaganda. Routinely, members of the public are asked to have an opinion on subjects about which they likely know little and what they do know was disseminated to them through a variety of propaganda methods and channels.

The following item illustrates this well.

Trump said the individual mandate is “highly unpopular.” As recently as February 2017, a YouGov poll found that 65 percent of people opposed it, a finding that is consistent with earlier polls from other organizations. That’s a fair sign of the provision’s unpopularity.

On the other hand, when people were given more details about the mandate, they had a more favorable view, as high as about 60 percent.

Source: How unpopular is the Obamacare individual mandate?

The second paragraph confirms the thesis – a public opinion poll is measuring the effectiveness of the propaganda campaign and little else.

To illustrate, here is additional propaganda on this subject. There is much discussion of whether or not there must be an individual mandate. What if the individual mandate is a moot issue due to how the ACA itself is written?

The authors of the ACA defined what was meant by “affordable” – if the price of insurance is too high, the government cannot force someone to purchase insurance. Here is an example – a 64 year old married couple living in Laramie, WY with an income of $65,000 per year is above the subsidy cut off level – that means there is no subsidy assistance to them.

The lowest cost Silver plan available to them is (quoted screen capture from HealthCare.gov for 2018) a staggering $49,000 per year:

First, you may be surprised that ACA insurance premiums can cost near $50,000 per year. Second, you may surprised that a person with a $65,000 pre-tax income has an ACA insurance bill of $49,000 per year with a $5,000 deductible – and no subsidy. This means their costs are $54,000 per year … or about 100% of their after tax income.

Clearly, this couple cannot afford ACA insurance. The ACA recognized this and this can be seen in IRS Form 8965. For 2016, if the least cost Bronze plan exceeds 8.13% of your income (modified adjusted gross income or MAGI), then you are exempt from the mandate. The least cost Bronze plan for this couple is $2,750 per month or $33,000 per year.

If this couple’s income is LESS than $405,904 per year, then they are exempt from the ACA individual mandate to purchase this insurance per IRS Form 8965.

For couples or families over age 45-50, the ACA rates have risen so high, so rapidly, that  s likely a majority, and nearly everyone over age 55, are exempt from the individual mandate, by law.

If your insurance costs are $750/month, then you are exempt if your income is less than $110,000 per year. Surprised?

In effect, the individual mandate is a moot issue for perhaps most of the unsubsidized market.

When you see actual ACA price quotes like the above, what do you think of the individual mandate?

Does this illustrate how a public opinion polls merely measure the effectiveness of propaganda campaigns?

Notes

In Laramie, WY, there is a Gold plan that costs less than the cheapest Silver plan – for a mere $40,000 per year. Why is the Silver plan used in this example? Because the US Department of Health and Human Services uses the Silver plans as the “benchmark” and subsidies are given out based on the pricing of the lowest cost Silver plan in each market.

Is Laramie just an outlier? Perhaps, we have not looked at all markets. It is common, however, for the ACA rates to run $25,000 to $35,000 for families in different locations in the U.S. The NY Times just noticed this for the first time in November of 2017 – check it out. (The NY Times diagnoses the wrong root cause, however – to learn about the actual root cause and possible solutions see my paper.)

Why is there no subsidy for this couple? Because the subsidy cut off level has nothing to do with the cost of insurance. The cut off level is set to 400% of the regional poverty level. There is no connection what so ever to insurance costs. Thus, a couple earning $65,000 per year has an insurance premium of $49,000 per year and is ineligible for a subsidy. If they made just $1,000 less per year, they then qualify for a $43,316 per year subsidy from the taxpayers. (Of interest, the out of pocket payment by the subsidy recipient works out to about the 8.13% value – as insurance rates rise, the subsidy payment increases to keep the consumer’s costs at the ACA defined affordability level. Of interest, in another year or two, the costs of insurance for some will exceed their annual income – and the subsidy value will also exceed their annual income too).

Is the 8.13% value set by the ACA and the IRS too low? The government’s data indicates we spend about 18+% of national GDP on health care. By their reckoning, insurance plus out of pocket costs and miscellaneous expenses are going to result in an average family spending of perhaps 18% on health (this is a simplified explanation). Thus, 8.13% for insurance is the component of this spending that is used as the ACA “affordability” criteria. Higher than this, and the government says it is not affordable. The government had to pick some level and chose this one based on data. The government might have selected a different dollar value – for example, should the government mandate that you spend 120% of your income on health insurance?

The bottom line is that ACA health insurance is not affordable according to the ACA itself.