Middle class family braces for higher premiums

2013-10-28T06:00:00Z 2013-11-01T13:14:34Z Middle class family braces for higher premiumsThe Associated Press The Associated Press
October 28, 2013 6:00 am  • 

As many as nine in 10 Texans buying health insurance on the new federally run exchange will get a break on costs, according to federal health officials. Steve and Maegan Wolf won’t be among them.

The Wolfs, who live in an upscale area outside Austin, make too much money to qualify for tax credits that will help other people afford coverage. That leaves them wonder-ing how much they’ll wind up paying.

Steve Wolf, 50, coordinates stunts and special effects for feature films and TV shows. Last year, he helped the Discovery Channel blow up scale replicas of the Hindenburg. He owns Stunt Ranch, where schoolchildren come to learn about the science and math of movie stunts.

His wife, 34, is a full-time mom who spends many hours each week getting their three boys, 16-year-old Clayton, 12-year-old Paxton and 8-year-old Dashton, to school, swim lessons, speech therapy and math tutoring appointments.

Like many who run family businesses, the Wolfs’ annual income varies, but it’s typically $115,000 to $140,000. That means they make too much to be eligible for the tax credits that will help some Americans pay for health insurance under the Affordable Care Act. They also worry that changes in coverage required by the law will mean their premiums will increase. That includes setting minimum coverage requirements for insurance companies that go well beyond what many offer now and prohibiting insurers from banning those with pre-existing medical conditions.

The Wolfs have purchased their family’s health insurance on the individual market for about 12 years, during which time their premiums have risen steadily.

They now pay about $650 a month for insurance. And while their general health is excellent, each of them has had their share of medical expenses. Their policy has a $5,000 annual deductible for each adult, meaning the Wolfs in many years have had to pay $10,000 out of pocket toward medical bills on top of the $25 co-pays for doctor visits and $20 co-pays for covered generic medicine.

Next to their mortgage ($2,300 a month with property taxes), their health insurance is one of their biggest expenses. Private school for two of the three boys adds nearly $3,000 per month. One of the boys is both dyslexic and has celiac disease, requiring additional educational and grocery expenses. There also are bills for life insurance, orthodontia, utilities, cellphones, car insurance for a teenage driver and home and auto maintenance.

“When all is said and done, we live well, but there is no money left over,” Steve Wolf said. “Any increase in health insurance costs will create a financial strain.

“But I keep it all in perspective. Unlike most people on the planet, we’ve never missed a meal, been unable to find safe drinking water, lacked for a home to sleep in or had to go without medical care. So while this pinches us in the pocket, I’m very lucky to have these problems.”

Based on the Kaiser Family Foundation’s online calculator, the Wolf family’s annual premium costs for health insurance would be almost double their current costs if they purchase a benchmark plan through the federal exchange that will be offered to Texas residents.

If a yearly income of $130,000 is assumed, the Wolfs would pay an annual premium of $14,804 for the mid-range insurance plan, called a Silver Plan. Their current annual premium is about $7,800.

Instead, they could buy a less comprehensive Bronze plan for $12,270 a year. Or they would be eligible to purchase catastrophic coverage for even less, although it’s not clear how much this type of coverage would cost the Wolfs. A catastrophic plan would cover only preventive care. All the plans would come with an annual cost-sharing limit of $12,700 for the family, meaning they wouldn’t have to pay more than that out-of-pocket after paying their premiums.

Many health care expenses aren’t predictable and there is risk inherent in choosing a plan with a higher out-of-pocket costs and lower premiums, but the Wolfs are willing to take their chances.

“Despite our experience, we continue to hope that we’ll have low out-of-pocket expenses, so we’d rather have a lower premium and the possibility of low costs than to be locked in to higher premiums that cover services that we might not use,” Steve Wolf said.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(22) Comments

  1. Leaningright
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    Leaningright - October 29, 2013 1:13 pm
    This family should be allowed to spend their money as they see fit. They had a perfectly good healthcare plan as it was, but thanks to Obamacare, they cannot keep that plan. Obama lied so many times over the years telling everyone that if they liked their current plan, they could keep it. Instead, this family and many many others will be denied the same coverage and have to spend much more money on a like plan, or a plan with less coverage for the same amount of money. Last I read, 1.5 million have had their current plans cancelled due to Obamacare.

  2. nonpartisan
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    nonpartisan - October 29, 2013 9:58 am
    Typo in the second sentence of my post below.
    It should read:

    "According to the US Census Bureau, the median household income in 2012 was $51,017, and that’s the middle of the middle class, obviously. Incidentally, that figure was in 1989 was $51,681." (i.e. $664 more!)

  3. MickeeD
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    MickeeD - October 29, 2013 8:22 am
  4. Ishmael
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    Ishmael - October 29, 2013 7:33 am
    An op-ed from Paul Krugman;


    The Big Kludge
    "The good news about HealthCare.gov, the portal to Obamacare’s health exchange, is that the administration is no longer minimizing its problems. That’s the first step toward fixing the mess — and it will get fixed, although it’s anyone’s guess whether the new promise of a smoothly functioning system by the end of November will be met. We know, after all, that Obamacare is workable, since many states that chose to run their own exchanges are doing quite well.

    But while we wait for the geeks to do their stuff, let’s ask a related question: Why did this thing have to be so complicated in the first place?

    It’s true that the Affordable Care Act isn’t as complex as opponents make it out to be. Basically, it requires that insurance companies offer the same policies to everyone; it requires that each individual then buy one of these policies (the individual mandate); and it offers subsidies, depending on income, to keep insurance affordable.

    Still, there’s a lot for people to go through. Not only do they have to choose insurers and plans, they have to submit a lot of personal information so the government can determine the size of their subsidies. And the software has to integrate all this information, getting it to all the relevant parties — which isn’t happening yet on the federal site.

    Imagine, now, a much simpler system in which the government just pays your major medical expenses. In this hypothetical system you wouldn’t have to shop for insurance, nor would you have to provide lots of personal details. The government would be your insurer, and you’d be covered automatically by virtue of being an American.

    Of course, we don’t have to imagine such a system, because it already exists. It’s called Medicare, it covers all Americans 65 and older, and it’s enormously popular. So why didn’t we just extend that system to cover everyone?

    The proximate answer was politics: Medicare for all just wasn’t going to happen, given both the power of the insurance industry and the reluctance of workers who currently have good insurance through their employers to trade that insurance for something new. Given these political realities, the Affordable Care Act was probably all we could get — and make no mistake, it will vastly improve the lives of tens of millions of Americans.

    Still, the fact remains that Obamacare is an immense kludge — a clumsy, ugly structure that more or less deals with a problem, but in an inefficient way.

    The thing is, such better-than-nothing-but-pretty-bad solutions have become the norm in American governance. As Steven Teles of Johns Hopkins University put it in a recent essay, we’ve become a “kludgeocracy.” And the main reason that is happening, I’d argue, is ideology.

    To see what I mean, look at the constant demands that we make Medicare — which needs to work harder on cost control but does a better job even on that front than private insurers — both more complicated and worse. There are demands for means-testing, which would involve collecting all the personal information Obamacare needs but Medicare doesn’t. There is pressure to raise the Medicare age, forcing 65- and 66-year-old Americans to deal with private insurers instead.

    And Republicans still dream of dismantling Medicare as we know it, instead giving seniors vouchers to buy private insurance. In effect, although they never say this, they want to convert Medicare into Obamacare.

    Why would we want to do any of these things? You might say, to reduce the burden on taxpayers — but Medicare is cheaper than private insurance, so anything taxpayers might gain by hacking away at the program would be more than lost in higher premiums. And it’s not even clear that government spending would fall: the Congressional Budget Office recently concluded that raising the Medicare age would produce almost no federal savings.

    No, the assault on Medicare is really about an ideology that is fundamentally hostile to the notion of the government helping people, and tries to make whatever help is given as limited and indirect as possible, restricting its scope and running it through private corporations. And this ideology, at a fundamental level — more fundamental, even, than vested interests — is why Obamacare ended up being a big kludge.

    In saying this I don’t mean to excuse the officials and contractors who made such a mess of health reform’s first month. Nor, on the other side, am I suggesting that health reform should have waited until the political system was ready for single-payer. For now, the priority is to get this kludge working, and once that’s done, America will become a better place.

    In the longer run, however, we have to tackle that ideology. A society committed to the notion that government is always bad will have bad government. And it doesn’t have to be that way."
  5. chicken1
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    chicken1 - October 29, 2013 7:32 am
    Seems as though this middle class family could make some cuts in the budget. Private school? 2300 mortgage? What kinda car did they buy for the kid? Cut back on the phone plan? Maybe thats just how my middle class ALICE plan works.
  6. MMike
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    MMike - October 29, 2013 5:26 am
    NP: Defining class is indeed slippery. Even income levels are ambiguous. But then if you include other factors like education and culture it is even trickier. The strata most in trouble now is the lower middle class, meaning those in the 20%-40% range. See


    "ALICE is an acronym developed in a report for the United Way of Northern New Jersey. It stands for Asset Limited, Income Constrained and Employed. ALICE Americans live on the jagged edge of the middle class. But by virtue of their economic situation and outlook on the future, they are becoming as distinct from the relatively more comfortable parts of the middle class as they are from those living in poverty.

    Americans have traditionally divided the country into three bands of income: rich, poor and a broad middle class in which, despite the protestations of statisticians, almost all Americans felt membership. But the distinct, cohesive middle class of the past is being cleaved in two. Last month the Census Bureau released new data pegging the median U.S. household income at $51,017. That income level is the new dividing line in American life and politics. Those roughly above that line constitute what is left of the traditional American middle class. Those living below that line, but above poverty, are the ALICE class.

    For most of the past 50 years, the income growth lines for the middle 20 percent of Americans and the 20 percent right below them tracked one another. A unified middle class rose and fell together. But increasingly over the past decade, these lines have diverged and a new income gap has grown."

    For a really funny, but dated, look at social class see:

  7. jtrookielt
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    jtrookielt - October 29, 2013 1:34 am
    "If you like your plan, you can keep it."
  8. nonpartisan
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    nonpartisan - October 28, 2013 10:05 pm
    I did some digging and I came to conclusion that a definition of the "middle class" is a somewhat vague, and there’s really no definition of the “upper middle class”.

    According to the US Census Bureau, the median household income in 2012 was $2012, and that’s the middle of the middle class, obviously. Incidentally, that figure was in 1989 was $51,681.

    The US Census Bureau uses the middle 60% to define the middle class. According to this definition, the US middle class household incomes are between $20,600 and $102,000 annually.

    However, the median was $39,078 in Mississippi, and $67,469 in Maryland.

    If we go county by county, the differences are even more staggering. In Holmes County Mississippi, the median household income is $22,259. One county over, Madison, it is $59,730. And not all of Maryland is wealthy. Montgomery County has a median household income of more than $95,000. But Allegany County’s median is about $35,000.

    Using the middle 60% income definition, in New York County (Manhattan) the bottom end of that middle class group is $20,171 and the top end is $171,942. In Fairfax, Va., (suburban Washington), the bottom of the middle class would be $52,184, but the top would be $194,716.

    So indeed, a dude making $130 annually in Austin, TX is a middle class, but I’m not sure if he is an upper middle class, as it is not defined.
  9. MMike
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    MMike - October 28, 2013 8:15 pm
    Nonpartisan asked a perfectly fair question. USN is at least funny. You have done little but reveal your prejudice.

    Spanish has been a major language in Texas since before we took it. If you are so concerned with legalities, you must think we should give it back to Mexico.
  10. MMike
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    MMike - October 28, 2013 8:10 pm
    Exactly! I'm glad you finally see the light. ;-)

    I still maintain, that 9/10 is greater than 1/10.
  11. StraightTalk
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    StraightTalk - October 28, 2013 6:28 pm
    Tongue in cheek irony, great take on a liberal minded American injustice.
  12. StraightTalk
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    StraightTalk - October 28, 2013 6:26 pm
    Low income people in Texas, please clarify. You mean those 3 out of 10 who are there illegally? Standing in line at the charities for food, insisting that schools and others accommodate their language. Earning cash that never makes it to the old income tax reporting but demanding health care and entitlements not even afforded to our American Service Men and Women.
  13. StraightTalk
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    StraightTalk - October 28, 2013 6:23 pm
    Read the statement Dfan..............face the truth, food stamps are spent on what is authorized, leaving unearned cash for beer, cigs and lotto. You know it and choose not to admit it. But, please read before jumping off a cliff.

    using food stamps or buying cigarettes, beer and lotto tickets with money they don't have but subsidized by tax payers, wanna bet?
  14. MMike
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    MMike - October 28, 2013 4:37 pm
    I think Droldfan nailed it. Class prejudice is prejudice. But also note that Texas is not expanding medicaid coverage, so the 9 out 10 people the article talks about are WORKING. The family the article focuses on lives in an upscale neighborhood. I used to live in Austin and am aware of the cost of living there. When I say upper middle class, I mean part of the middle class. I am not saying they are rich.
  15. USN420
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    USN420 - October 28, 2013 4:35 pm
    I agree with MMike.. How dare the Associated Press do a story on this family!

    They clearly should have written their story as a glowing endorsement of the ACA by featuring one of the hundreds of thousands of people who have successfully enrolled in the ACA via expanded Medicaid benefits.

    Instead, they choose to write a story about a family of five making about $130K a year... In Austin... one of the most expensive cities in Texas... Who's premiums are going to increase by a substantial amount. The gall!

    Unfortunately, It's because of families like the one in this story, and the hundreds of thousands of people who are having their current policies cancelled while having to purchase more expensive ones in January that are being forced to pay for the massive Medicaid expansion. Why would any news organization want to report on that???
  16. MMike
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    MMike - October 28, 2013 4:30 pm
    Median household income is about $50K. So yes, this family is in the upper part of the middle class. Now Obama said something about people under $250K would not pay more, so it is fair to point out that he was wrong and probably should have known he was wrong. But, the overall impact of the ACA seems to be positive.
  17. Droidfan
    Report Abuse
    Droidfan - October 28, 2013 1:44 pm
    Ah yes, the broken record of "I done seen some lowlife welfare crackheads buyin' them some cigarettes with their food stamps on the taxpayers' dollar!"

    At the same time, you're saying it must be hard for a family of four making $130,000 a year to get by. Notice any irony in what you're saying? Maybe that family of four should stop paying for that expensive private school, if they're in such dire straits! Maybe the mother should go out and get a job, since you're so worried about unemployment. But you would no doubt be offended if you saw a minimum-wage McDonald's employee buying a pizza at Papa Murphy's. Because after all, they should be getting by on their $15,000 a year, right?

    By the way, you can't buy cigarettes and beer with food stamps. A few misguided individuals let other people use their LINK cards in exchange for alcohol. That doesn't mean you're any less ignorant for generalizing every LINK recipient in the state as an unemployed alcoholic teat-sucker. I know a single mother with a 2-year-old daughter who works two jobs and goes to school. She lives in a cheap apartment and can't even afford full-time daycare, so the food benefits she receives each month are a blessing. I also know an Army veteran who has spent nearly 20 years at the same job and is still making minimum wage because the company won't pay their employees fairly. He's in his late 60s. What would you like him to do? Go back to college and become a doctor?

    Instead of worrying about how many people are on food stamps, how about you start looking at WHY these people are forced to be on food stamps in the first place? For every deadbeat with a fake "disability," there are about 10 of your "working families" struggling to get by because our state government keeps forcing jobs out of Illinois.
  18. nonpartisan
    Report Abuse
    nonpartisan - October 28, 2013 12:48 pm
    $130,000 annual gross income (before taxes) for a family of four is now upper middle class, according to MMike?
  19. StraightTalk
    Report Abuse
    StraightTalk - October 28, 2013 10:30 am
    Old Joe Knows..........wait until the young find out that after years and years of paying into Social Security and Medicare that upon turning 65, you will start losing rather than gaining. Guess what, your Social Security check will shrink because of the Medicare B and/or supplemental will be withdrawn from your SS check. What? you say I thought I already paid that for the last 40 years, yep you did, and will keep on paying for the rest of your life. And, hopefully you won't be able to make as much as the family in this article, why, because then your income will be further taxed each year. Solution you say, how about just not having health insurance and not joining Obama Care. Oops, can't do that I will be fined by the ever efficient IRS. God bless what is left of America.
  20. StraightTalk
    Report Abuse
    StraightTalk - October 28, 2013 10:24 am
    So, MM, you are upset that the SI article features a WORKING family. I agree, they are in the minority in this country. I suppose you would prefer news articles on the majority non-working, entitlement, tax payer draining families? If so, just watch the many Obama funded public announcements and press conferences. I can assure you, read the facts, that a $130,000 yearly income in the Austin area is not upper middle class. This family clearly sacrifices to get by, I guarantee it. But, sacrifice as they may, they are still a WORKING, tax paying contributing family. I would bet my yearly income tax liability that you will never see them in the checkout using food stamps or buying cigarettes, beer and lotto tickets with money they don't have but subsidized by tax payers, wanna bet?
  21. MMike
    Report Abuse
    MMike - October 28, 2013 9:09 am
    So 9 out of 10 "will get a break on costs" but they do a story on a upper middle income family in an upscale neighborhood that will pay more. What not do a story on the hundreds of thousands of low income people in Texas who are excluded from Medicaid expansion because of Gov Perry and the state GOP?
  22. OLD JOE
    Report Abuse
    OLD JOE - October 28, 2013 7:27 am
    Everything is subject to change. As Obamacare implodes on it's self rates will go up. Just like social security. I remember in the 70's and part of the 80's many guys at work saying I got my social security payed in for the year this paycheck. I don't even know if that is possible today.
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