Single-Income Colorado Family Calculates Health Care Costs

Love it or hate it, the highly politicized health care bill was signed into law on March 23. With all of the chatter on the airwaves, there is little discussion of how it will really impact Americans. Here is how the new law will affect my family. At the end of my case study, I've provided links so you can see what you can expect.

First, Some Background

Thankfully, my family is healthy with no pre-existing conditions. We currently have medical insurance. I stay at home with our daughter, and purchase a high-deductible insurance policy for myself online. My wife gets insurance for her and our daughter through her employer. It is significantly cheaper for us to buy my insurance separately. Health insurance for our family is our biggest expense -- even more than our monthly mortgage payment! We are both 31, and our daughter is not yet one year old. Our combined annual income is around $50,000.

Health Reform Impact

As with most Americans, we will probably not see a change until 2014 when the law goes into effect. Since we pay more than 9.5 percent of our current income for insurance premiums, we will be eligible for tax credits to pay for premiums, or help with deductibles and co-payments. These tax credits will keep the cost of our insurance premiums below $4,750, based on family size and income. Additionally, our out-of-pocket deductibles and co-payments could be capped at 30 percent of cost.

Because I purchase my own insurance, I will buy my policy in a newly created insurance exchange. Basically, the idea is to pool people in a single marketplace, thus lowering the cost of premiums. Another change is that our daughter will be able to remain on our insurance until she is 26 years old. Finally, any children we have in the future cannot be denied coverage

Overall, it looks like my family should save a few thousand dollars annually because of health care reform. This is a basic analysis, as there will be variations based on location and the final outcome of the Senate's reconciliation. There are also more than a dozen lawsuits that have been filed by state attorneys general that could impact the final look of the reform package, although this is unlikely. As income levels increase, the amount people pay in premiums also increases. If I start working full time, and our combined income increases to more than $250,000 by 2014, we will not qualify for the premium subsidies, and will have to pay higher taxes.

How You Might Be Affected

Now that you know my story, you should see how you might be impacted by this new law. Fortunately, you do not have to slog your way through the bill itself. Here are some tools and resources that you can use, along with a brief review of each.

What does the health-care law mean to me? The Washington Post, March 21, 2010 - This is the tool I used for my self-analysis. Enter your current insurance status, number of people in your household, adjusted gross income and marital status to see how it will impact you.

How Different Types of People Will Be Affected by the Health Care Overhaul. The New York Times, March 24, 2010 - This tool does not allow you to enter information, but rather offers eight scenarios to choose from. I was unable to use this tool, as my family type is not a choice. Check it out to see if you fit into any of the pre-defined categories, as it provides good information.

How will the health care bill affect me? Lawrence Journal World & News, March 24, 2010 - This article provides a short Q & A of health reform issues. It is a good source, but does not offer a scenario tool.