Why People are Choosing to Remain Uninsured Under Obamacare
The New York Times today features a lengthy article profiling individuals who chose to remain uninsured this year under Obamacare.
For most of the people who appear in the story, it's a financial decision. They have tight budgets, and health insurance remains expensive under the Affordable Care Act, even with whatever subsidies they may qualify for.
Cost is the most frequently raised issue, but it's not the only one. One Kentucky man featured in the story says he was put off by technical troubles; he had decided to purchase insurance, and he had selected a plan with what he thought was a fairly low deductible. But that deductible, the Times reports, was "miscalculated because of a programming error." He ended up deciding not to enroll in new coverage through the exchange this year.
And then there's the story of Tammy Williams, a woman from Washington state who "based her decision to opt out partly on philosophical resistance to the law." Here's her story:
"The government comes into our life and makes these decisions for us without even asking us," said Ms. Williams, 56. "It just makes me want to rebel."
Ms. Williams, who earns less than $40,000 a year at a small marketing firm in Seattle, said she did not want to hand over what little discretionary money she had after rent and other living expenses to an insurance company. She has been uninsured since moving a year ago from Ohio, where she had a job with health benefits.
She qualified for a subsidy to help buy coverage through Washington's marketplace, but said that she still would have had to pay around $135 a month for the least expensive plan, with a $6,000 deductible that she said made it unfeasible.
"I am opting out," she said on the last day of the enrollment period, adding that she might instead buy dental coverage outside the marketplace to take care of a chipped crown and a cavity.
A political independent, Ms. Williams said she at first chided herself about not buying coverage, thinking, "There's plans out there that make it a good thing for people, and I'm just going for rebelling against the government."
But when she looked closely at the costs, she decided her resentment was justified.
"If given a voice — 'Do you want to participate or not?' — I would have said no," Ms. Williams said. "But I don't remember being asked."
The piece ends with the story of Cindy Whitely, a Kentucky woman who had initially thought she might go without insurance, but did end up getting covered after her work with a home improvement company dried up last winter. Less work meant less income, which in turn meant a bigger-than-expected subsidy for her and her family.
But now she's worried that she might lose her new coverage if work picks back up, her incomes rises, and the subsidy is no longer as big as it is now. "If work picks back up and I jump right back up there," she told the Times, "then I'm stuck."
That's a pretty good illustration of the tradeoff the law sets up between working more and keeping benefits. When people talk about Obamacare's potential negative effects on employment, this is the sort of thing they're talking about.
But it's actually worse than that. If Whitely's income rises enough this year, not only will her subsidy for next year go away, but she may have to repay part of this year's subsidy. People who underestimate their income and therefore end up getting a larger subsidy than their actual income allows can be dinged by the Internal Revenue Service (IRS) for repayment come tax time.
This is not a small issue. As many as 40 percent of the beficiaries who receive subsidies under the law may end up on the hook for repayment, according to a 2013 Health Affairs study. Which means that if she ends up with more work than expected this year, the extra subsidy that Whitely was counting on to help pay for coverage might not really be there at all.
Maybe all this will get sorted out as the law settles into place. The IRS may just go easy on people who are on the hook for repayment. But I wouldn't be surprised if, in the years ahead, these are the sorts of stories we hear more of when asking why some people are still choosing to remain uninsured.