As Smith and his wife get older, the $5000 credit buys less coverage because premiums in the individual market increase with a person’s age. They could end up paying far more in premiums than if they stayed with their employer plan. Generally with these plans, a forty-year-old worker pays the same portion of the premium as a sixty-year-old worker, although premiums for the entire group may rise as the group itself ages. “I can’t imagine this working for a lot of people. It won’t work for me,” he adds.

How the family would fare under Obama

Because Obama’s proposals are so vague, it’s hard to say whether the Smiths would benefit. Early on, Obama said that his proposed public plan would be available to small businesses and individuals without access to employer-based coverage or public plans. That seems to indicate he wouldn’t be eligible for any kind of new public insurance option like those being promoted by Obama surrogates; that is, barring some huge legislative breakthrough that lets everyone buy into a Medicare-like plan that might offer cheaper premiums and comprehensive benefits—in short, a better deal than private insurance, whether provided by employers or bought individually.

On the trail, Obama has promised that he has the secret sauce to lower insurance premiums by $2500 for a typical family. That implies his proposed cost control measures—health IT, requiring hospitals to publicly report on costs and quality, and better management of chronic conditions—will actually keep medical costs from rising. Experts now doubt that these ingredients will work. So unless and until there is real cost control, the Smiths will continue to be part of the growing number of Americans who are underinsured.

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