How Health Reform would affect

Beth: uninsured, but children are covered

Beth: uninsured, but children are covered

Beth, 34, two children. Sales associate at large discount store. Income: $34,000. Beth can’t afford her share of health insurance premium (50% of the total premium) offered through her job, so she's uninsured. Kids get coverage through her state’s children's health insurance program (CHIP). She pays $10 a month per child and low co-pays.

Under the Proposed Health Reform Bills:

CHOICES

  • Beth’s employer may decide to pay a larger portion of the cost of her health insurance premium, making this a more affordable option for Beth.
  • Beth could also buy coverage for her family through a new health insurance “store” or exchange with a variety of choices.
  • Depending on the bill, CHIP coverage for Beth’s kids would either continue or be replaced by the new options in the exchange.
  • Beth would have to get coverage unless she can show she can’t afford it.

COST

  • If the cost of employer coverage remains very high, Beth would qualify for premium credits to purchase a policy in the exchange. What constitutes "very high" depends on the bill.
  • Beth’s employer might begin to pay more towards coverage in order to avoid penalties (see below). However, an employer can avoid penalties and still leave Beth with costs that are quite high--as much as 27.5% to 40% of the costs, depending on the proposal and whether she includes her kids on the policy.

DIFFERENCES

House bill (H.R. 3962, passed November 7, 2009):

  • Her employer would pay at least 72.5% of Beth’s individual premium, or 65% of the cost for a family premium. If her employer doesn’t, they must pay into a fund to help cover lower-income people.
  • Beth can only get help paying for coverage in the exchange if her share of the cost of employer coverage exceeds 12% of her income. Otherwise, people with employer coverage are not eligible for premium credits in the exchange.
  • The CHIP program for low-income children would end once affordable coverage is available in the exchange. CHIP enrollees with incomes below 150% of poverty would be moved to Medicaid.

Senate bill (H.R. 3590, passed December 24, 2009):

  • Employers are not required to offer coverage. However, if they have workers who purchase health insurance using the new premium credits, the employer will have to pay into a fund that helps finance those credits.

  • To get help paying for her coverage in the exchange, Beth’s cost for her share of her employer coverage must exceed 8% of her income. At this level, Beth can use the premium contribution her employer normally makes to purchase coverage in the exchange. If her cost for employer coverage is even higher, exceeding 9.8% of her income, she will qualify for individual tax credits in the exchange. Otherwise, people with employer coverage are not eligible for premium credits in the exchange.

  • CHIP coverage is still available to low-income children, like Beth’s.

Click here to learn more about new rules

Back to Main