San Jose Mercury News - Obamacare: Two Bay Area legislators want to expand law's subsidies in high-cost areas
February 18, 2014
In The News
By Tracy Seipel
Hoping to increase the number of Americans eligible for tax subsidies under the new federal health care law, two Bay Area lawmakers introduced a bill Tuesday that would expand the subsidized income level for those living in high-cost areas of the country.
U.S. Reps. Anna Eshoo, D-Palo Alto, and Mike Thompson, D-Napa, say the Fair Access to Health Act ties health insurance subsidies to the cost of living in a geographic area instead of to the national federal poverty level.
The health care law "is helping low- to middle-income Americans buy private health insurance." Eshoo said. "While this is tremendously helpful to millions of individuals and families, there are others in high-cost areas, like those in my home district of Silicon Valley, who cannot benefit because the threshold to qualify for subsidies does not account for the cost of living."
The Affordable Care Act, also known as "Obamacare," allows those earning from 138 percent to 400 percent of the federal poverty level to qualify for tax credits to help them purchase health insurance through newly created state and federal insurance exchanges. At this level, an individual with an adjusted gross income from $15,857 to $45,960 -- or a family of four earning from $32,500 to $94,200 -- can qualify for the tax credits.
According to Eshoo and Thompson, the bill would allow someone living in the San Francisco-Oakland-Fremont Metropolitan Statistical Area to earn up to $61,356 and still receive a subsidy, or $125,757 for a family of four.
In the San Jose metropolitan area, individuals who earn up to $62,147 -- or a family of four making up to $127,377 -- could qualify for the tax credits.
Eshoo and Thompson said precedent already exists in the health care law for such cost-of-living adjustments. The law, they noted, accounts for the expensive cost of living in Alaska and Hawaii by using a higher income threshold to determine subsidy eligibility. The Fair Access to Health Care Act would provide similar adjustments in the other 48 states.
While some health care policy experts on Tuesday commended the concept, few believed the proposed legislation would make it through the Republican-controlled House of Representatives. Along with their GOP colleagues in the U.S. Senate, House Republicans say they want to "repeal and replace" Obamacare.
The proposed bill "is a good idea,'' Micah Weinberg, a health policy adviser to the pro-business Bay Area Council said. "Good luck with Republican votes, though!"
Lanhee Chen, a research fellow at Stanford's Hoover Institution, agreed.
"If anything, Republicans are looking for ways to pare back the subsidies, not to make them more generous for some who live in places like San Francisco and New York City," said Chen, who was 2012 GOP presidential nominee Mitt Romney's policy director.
Still, several other local Democratic legislators, including Zoe Lofgren, D-San Jose; Mike Honda, D-San Jose; Sam Farr, D-Santa Cruz; and Jackie Speier, D-San Mateo, are supporting the bill.
"If you're in a high-cost-of-living area, like here in the valley, the threshold should be graduated to take that into consideration," Lofgren said Tuesday. "After all, the ultimate goal is to make health coverage within easier reach to more people who could otherwise be left behind."
Robert Heath, a San Jose real estate broker, had complained loudly to Lofgren in the fall about health insurance costs. Because his annual income hovers at about $96,000, he missed the subsidy cutoff of $94,200.
If passed, Heath said, the new bill "would definitely help the high cost areas like here," though he noted its ultimate benefit would depend on the amount of the subsidy he would receive. Under the current law, Heath calculated, even if his income had landed at just under $94,000, he would have received about $100 a month in subsidies.