The ACA (and Infertility)

CAUTION: This will end up being a fairly long-winded post sans photos. You've been warned.
So recently at work, we got our health insurance renewal package and it kind of just makes my blood boil, in a sense. It, somehow, still amazes me how politicians and government officials write these laws to make things "more affordable" for the lower and middle class people in this country, when in reality, it's not really helping them financially in any way.
As most everyone should know by now, the ACA (or Obamacare) makes it mandatory for everyone to have a minimum level of health insurance. Fabulous! would be what most people think who believe everyone should have equal access to health care. I lived in Germany (hello Socialism!) and had universal health care coverage. Now, it wasn't free, I had a portion of my paycheck taken out to cover my shared portion and my employer made a matching contribution. Let me also clarify that roughly 38% of my paycheck also went to taxes in addition to the health care contribution. So, when this is pretty much across the board for everyone working in Germany (there are exceptions and in some cases up to 50% taxes), there are a lot of available funds for the social programs, including health care. This certainly isn't the case in the USA where the median AGI is around $40,000 which means most people in this country are paying 25% or less in taxes.
This is where the Shared Responsibility Payment and the Employer Responsibility Payments come into play. The idea behind these penalties is they will help subsidize the cost of health care (premiums) for the low income. Except, the government has a skewed idea of what "low income" or "rich" really looks like.  To qualify for a Premium Tax Credit - in other words financial assistance towards your health care premium costs - you need to make between 100 to 400% of the Federal Poverty Level. For a married couple without children, this caps out at about $62k. Now, for the area where F and I live, a married couple earning over $60k combined is fairly well off. They're not starving, but they are far from rich. Doing extremely well in our area would be a family earning upwards of $200k. Now, they're doing well: they can maybe buy one of the few million dollar homes in the area or similar, buy the big expensive cars, etc. But I still wouldn't classify them as rich. Well off, definitely, but in no means are they rich.
So staying with an example of a family of two earning, we'll say, $65k (meaning they qualify for no assistance), a Bronze Level health insurance plan (the most basic coverage) costs them around $800/month (I used age 35 for calculating). This Bronze Level plan is a high deductible plan: they have to meet a required deductible (in this case $4,500 per person/$9,000 per family) prior to the insurance covering any costs. And even after meeting this deductible, they are still responsible for 40% of all costs thereafter. We'll assume the family enrolled through Covered California (or Marketplace) so the premiums are being paid with post-tax monies. That means, of the $65k they earn in gross income, and after the approximate 15% in taxes, they are left with about $55k to pay their yearly premium of $9600 - that's almost 15% of their gross income (Note: this does not take any adjustments or deductions into account, these also play a roll in available funds). That leaves just over $45k for all other expenses. Thanks to the ACA, they are now between 100 - 400% of the FPL, but didn't receive any assistance.
Which brings me to our renewal package at work. My work currently offers a small business plan which happens to be a high deductible plan at the Bronze level. Currently, it is a $3500/30% plan - similar to the example above: I have to meet a $3500 deductible and am responsible for 30% thereafter.  To give a concrete figure, the estimated out of pocket costs for giving birth would be $5600 on this plan. That is more than what my yearly premium costs. Now, with the renewal package, we were informed that our current plan will no longer meet ACA requirements, so we are being rolled over into a different Bronze plan: this time the $4500/40% plan (from above) while our premium is only going down 1%. My work contributes a flat amount for me to use towards any of my voluntary benefits and any excess is deducted out of my paycheck pre-tax. The advantage for me is that my taxable income is reduced through this deduction, saving me taxes. 
Anyway, my work could switch to a Silver level plan that is a $1000 deductible and a mix of coinsurance and co-pays thereafter (out of pocket for giving birth on this plan would be about $3400) for about the same it is paying now on the Bronze plan plus Health Insurance Savings account contributions it pays for enrollees. Now, because my work contributes to the costs for me, it costs me about $400/month to have health, dental and vision coverage plus some additional policies. If F and I enrolled through Covered California, we'd be on our own for the cost of our health care and we'd get no tax savings.
And to bring this ramble of a post to the real issue at hand for F and I: fertility treatment is not a covered service. The only things covered thus far that we've done is all the lab work (it falls under diagnostic work). For everything else, we're on our own. F and I are going to start looking at our options for more aggressive treatment which can cost us between $200 to $10,000 per treatment (depending on which route we take after talking to our doctors). Now, while I know F and I can save and make it work to be able to finance whatever it is we do; part of me is slightly freaking out at what it could cost us to even try to get pregnant and then, when we hopefully do, have the baby. While it's not necessarily affordable, we are in a position that we won't go broke trying. I can't imagine what it is like for those in lower income brackets than we are. I totally understand why people opt to pay rather than play for the ACA (the penalty for 2015 is $325/adult or 2% of AGI, whichever is greater). For $65k, 2% is about $1300, that's a whole lot cheaper than $9600 for insurance.



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