A family left out of Obamacare

The Man in the Middle has "affordable" coverage; the ACA's "family glitch" snags his wife and kids

Next week when the administration adds up Obamacare’s first-year achievements—six to seven million Americans signed up for insurance on the exchanges and a few million more on the Medicaid rolls—38-year-old Bambi Devor and her five kids won’t be among them. That’s because her husband, Jeremy, is lucky. Yes, lucky. He has a Blue Cross policy from his employer, an engineering firm in Salem, Illinois. It offers good coverage and very low cost-sharing compared to the policies offered in the exchanges. Even better, the firm pays most of the premium. Devor, an engineering assistant, pays only $71 a month for his coverage—a bargain in today’s insurance world. His wife and five kids are not on the policy, though. He would have to pay the entire premium for family coverage, $587 a month, which he says he can’t swing on his income of around $54,000. “We’re always on the razor’s edge financially,” he says.

I’ve been following Devor and his family since he contacted me in 2009 during the health reform debate. He was hoping that the law, then about to pass, would bring affordable health insurance to his family, but because of a January Treasury Department ruling, neither Devor nor his family is eligible for subsidized coverage in the Illinois exchange. You see, what Devor pays for his coverage is less than 9.5 percent of his gross income, and the health law deems that “affordable” coverage. That bars him from receiving a subsidy for an exchange policy. While that ruling doesn’t hurt him, it does hurt his family. The government has decided that because he has “affordable” employer-sponsored coverage, his family members have it, too, and they cannot get subsidies either.

Obamacare was never meant to bring health insurance to every American who needed it. Its goal was to make it available to more people. Millions always were going to be left out. The problem the Devors have run into—the so-called “family glitch”—could ensnare as many as two to three million adults and children, according to the UC Berkeley Center for Labor Research and Eduation. What’s the reason for penalizing families this way? Ken Jacobs, who chairs the Center, explained the reason was simply cost. “The worry was that families might migrate from employer coverage to the exchange to get subsides,” he said, and “that might cost the government more money. It leaves a pretty big gap.”

The Devors know about that gap. As I’ve followed them over the past few years, I’ve seen how a family living in the middle of the country in a rural area with few opportunities for job advancement has struggled on a middling income to find affordable health insurance and affordable healthcare for very ordinary family medical needs. I’ve suggested other reporters follow such a family—invest time, follow up—in order to better explain and illustrate the intricacies of Obamacare (the “family glitch,” for one) in a way that is both more comprehensive and compelling than the flurry of brief personal anecdotes we’ve seen of late. Some reporters have done so. Earlier this month, for example, Emily Bazar of the CHCF Center for Health Reporting wrote about the Yates and Tipton families who, like the Devors, are caught in the “glitch.” Hopefully Bazar will continue to report on how these families fare.

As for the Devors, Bambi and her kids were on the Illinois All Kids program, but two years ago the state notified Devor his wife would no longer be eligible. To save money, the letter said, the state had to tighten eligibility, so she was dropped from the rolls. For two years she has had no insurance, and the family saved a few hundred dollars to check out her recurring ovarian cysts. His oldest daughter, who is attending a community college and working at a Dairy Queen, has aged out of the program and is also uninsured. She can shop in the exchange and get coverage with subsidies because Devor no longer claims her as a dependent on his tax return. Still, she hasn’t shopped. “She’s healthy and doesn’t understand this is important,” Devor says, adding even if she had to pay only $50 a month for a policy, it would still have a huge deductible, effectively giving her no insurance and an out-of-pocket expense.

At one point Devor thought his wife might qualify for Medicaid. No such luck. Even though she cannot get a subsidy to help pay her premiums, he looked at what the Illinois exchange had to offer, hoping that maybe there was an affordable policy among the offerings. “There were a whole list of options, but they are all horrible,” he told me. The cheapest plans were $225 a month. “It’s ridiculous. I would pay some $2,000 a year in premiums plus a $6,000 deductible.” The $6,000 deductible is just not doable. “Who can afford to spend $6,000 a year before the insurance pays?” Even a policy with a $350 monthly price tag and a $4,000 deductible did not seem reasonable. He concluded this is catastrophic insurance not health insurance, he told me, and he looked no further.

The Devors know that high deductibles—and even ones not so high—along with other cost sharing can devastate a family’s finances. In 2003, the family declared medical bankruptcy when hospital and doctor bills reached $12,000 for a variety of medical services the family needed. They had to pay out-of-pocket for them. Devor’s insurance comes with a $500 deductible and coinsurance of 20 percent, which is low but still enough of a deterrent to put off going to the doctor. He has arthritis and psoriasis and can’t always afford to go to the doctor because the out-of-pocket expenses add up. He said he owes one specialist $373, and he “wants me to pay him before he will see me again.”

Devor told me a lot of people in the community where he lives buy into the idea that Obamacare is horrible, but not for the right reasons. The law, he believes, doesn’t go far enough because it’s so watered down and should have been universal and included everyone. People in Devor’s community, he says, repeat the talking points they hear on TV about a government take-over, and how the law is going to help freeloaders. “They don’t see the problem with the inequality in our health care system.” The glitch that has ensnared his family punctuates his point.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman. Tags: , , , , ,