Captain Health USA

Making Health Insurance Great Again!

Is It True? An End to Subsidies?

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What a crazy time we live in where things move so fast but in reality not much actually changes.

This morning the President “said” he ended subsidies to the insurance companies (not to individuals) for cost sharing.

So what’s this really mean to us?…..Actually, nothing and here’s why….

First…very important….

The subsidies that were ended were payments to the insurance companies to lower among other things, the deductible on a policy. They were not the payments to individuals to help them pay for insurance. AND the reduced deductibles will still be in the policies.

Second…….

The insurance companies have already priced in an increase of about 20% as they expected the payments to stop.

Third…….

The subsidies an individual gets are based on a few things. Income, location, and the 2nd lowest cost silver plan in the market. So if the cost of the 2nd lowest cost silver plan goes up so does your subsidy to offset some or all of the increase.

Now you see how what the President did really means very little to us. Your subsidy should go up as the plan cost goes up.

So whats the fight about?……….

The president wants to do something to Obamacare…anything at this point. Also……

The President wants to put pressure on Congress so he “says” stop the subsidies to the insurance companies. I’m not sure he will actually get away with that as multiple states will sue to reinstate them.

Summary

So in most cases, instead of the gov’t giving money directly to the insurance companies to reduce your cost of insurance they will end up giving it to you in the form of increased individual subsidies…..which will go to the insurance companies to reduce your cost of insurance. Seems like the same end result to me.

I hope this helps explain a few things.

I can’t wait to see what tomorrow brings 🙂

Dave 

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