Seven Examples of how the BETTER WAY Will Affect Some Real (and Imaginary but Typical) People

 

Michael K.

Michael is a 90-year-old Medicare beneficiary, enrolled in Part D but not in a Medicare Advantage plan, and receiving services from multiple physicians and other providers for a variety of chronic conditions.

Under the BETTER WAY in Michael's city, the FFS option is more costly than any of several private health plans. Because he does not want to pay the FFS surcharge, he enrolls in a health plan with premiums below the benchmark. He chooses a new primary care physician who reviews all his medications and specialist care and determines that Michael's condition is being exacerbated by conflicting drugs. Michael's health improves and, as a result of choosing the lowest cost plan, he also receives a modest premium rebate.

Patricia R. 

Patricia is an unemployed single mother of two children, living in Washington State. Under Medicaid she and her children are eligible for comprehensive benefits at no cost and are enrolled in a Medicaid managed care plan under contract to the state.

Under the BETTER WAY, Patricia and her children receive premium support sufficient for zero-deductible coverage. She is auto-enrolled in the lowest cost available plan (but can choose another option, possibly at a surcharge) which is the same plan she was enrolled in under Medicaid. The only change is that she will incur a co-pay if she or the children use emergency room services for other than an emergency.

Kevie T.

Kevie is a 22-year-old auto mechanic and part-time rap artist in Detroit. His reported income (from the auto mechanic job) is $47,000. He has no insurance but is in generally good health.

Under the BETTER WAY, Kevie receives premium support sufficient for coverage with a $2,000 deductible and $25 co-pays. He doesn't bother to select a health plan and is auto-enrolled in the lowest cost plan available. Later, in an altercation with a rival rap artist, he suffers two broken arms and incurs medical expenses of $67,000. All but $2,800 is covered by his plan--without which he would have been liable for the entire amount.

Roger C.

Roger is a 74-year-old Medicare beneficiary, enrolled in a Medicare Advantage plan which includes drug coverage.

Under the BETTER WAY, Roger's Medicare Advantage plan reduces its base benefits to be actuarially equivalent to base Medicare benefits. However, this results in its being the lowest cost plan in the area, and Roger receives a modest rebate which he applies towards the purchase of additional coverage from his plan.

Harry V.

Harry is a 55-year-old vice-president of a software company, earning $240,000 a year, and suffering from various stress-related conditions. The company pays the entire $18,000 premium for Harry and his 22-year-old third wife and baby.

Under the BETTER WAY, Harry receives premium support sufficient for coverage with a $20,000 deductible. His company replaces the $18,000 premium with a salary increase of the same amount. Concerned about his health, Harry pays a $12,000 surcharge to upgrade to a plan with a $4,000 deductible, even though the surcharge is greater than his net after-tax salary increase of approximately $7,000.

Dwayne W.

Dwayne is a single 50-year-old man with diabetes and asthma, earning $30,000 a year (250 percent of FPL) tending bar in Mississippi, where the Medicaid program provides no coverage for single adults. He has had various medications prescribed by a community clinic but cannot afford to have them filled.

Under the BETTER WAY, Dwayne receives premium support sufficient for coverage with a $1,000 deductible and $25 co-pays, allowing him to purchase the needed drugs but incurring some $2,000 in out-of-pocket costs (depending on the number and refill frequencies for the drugs).

Barack Obama

Barack Obama is the 53-year-old president of the United States, with a wife and two daughters. Based on his 2013 tax return, the president will have Adjusted Gross Income of close to $500,000 and be in the 39.6 percent marginal tax bracket. Assuming he is enrolled in the Federal Employees' Health Benefit Program, his family coverage premium is approximately $16,000, of which he pays one-quarter.

Under the BETTER WAY, the president automatically receives premium support sufficient to cover the cost of a plan with a $20,000 deductible. Assuming Congress increases his salary by the amount of the federal contribution to the prior coverage, the president can apply the estimated net increase of $6,000 towards upgrading to lower deductible coverage.

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