Paul Melquist of St. Paul, Minn., has a message for the peoplewho wrote the Affordable Care Act: “Quit wrecking my healthcare.”

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Teri Goodrich, of Raleigh, N.C., has the same complaint. “We’regetting slammed. We didn’t budget for this,” she said.

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Millions of people have gained health insurance because of thefederal health law. Millions more have seen their existing coverageimproved.

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But one small slice of the population — including Melquist andGoodrich — are unquestionably worse off. They are healthy peoplewho buy their own coverage but earn too much to qualify for helppaying their premiums. And the premium hikes that are beingannounced as enrollment looms for next year — in some states, increasestopping 50 percent — will make their situations more miserable.

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Exactly how big is this group? According to Mark Farrah Associates, a health care analysisfirm, as of 2017 there were 17.6 million people in the individualmarket, 5.4 million of whom bought policies outside the healthexchanges, where premium help is not available. Combine that withthe percentage of people who bought insurance on the exchanges butearned too much (more than four times the federal poverty level, orabout $48,000 for an individual) to get premium subsidies, and theestimate is 7.5 million, or 43 percent of the total individualmarket purchasers, according to insurance industry consultant RobertLaszewski.

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And who are these people?

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“They’re early retirees,” said Laszewski. “They’repeople working part time who have substantial outside income.They’re people who are self-employed of any age, people who aresmall employers.”

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Melquist is one of those early retirees. He and his wife areboth 59. He worked in the defense industry and retired at the endof 2016.

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He said he always planned to retire at age 55, but ended upworking longer in part because he knew health insurance costs wererising. When he did retire and sought to purchase coverage forhimself and his wife, “I was shocked to find out how bad itactually was.”

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Paul and Nancy Melquist of St. Paul, Minn., both 59, retiredlast year and were nervous about insurance costs, but he says theywere “shocked to find out how bad it actually was.”

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Continued on next page>>>

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Kaiser Health News, a nonprofit health newsroom whosestories appear in news outlets nationwide, is an editoriallyindependent part of the Kaiser Family Foundation.

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For a bronze-level plan with a health savings account, Melquistsaid, “we pay $15,000 a year” in premiums “and the first $6,550[for health care expenses] for each of us comes out of our pocket.So basically you could be looking at $30,000 out-of-pocket beforeanything gets covered.”

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Insurance is important, Melquist said, particularly if acatastrophic health issue were to hit either of them. In themeantime, he can still pay the bills. But he’s frustrated. “I’m noteating dog food, but I’m also not able to do stuff for mygrandchildren,” he said, like help with college costs. “It’s notthat my life is falling apart, but the [Affordable Care Act] hasruined a lot of things I’d like to have done.”

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The good news, if there is any, for Melquist is that premiums in Minnesota are going up by onlysmall amounts for 2018, and in some cases going down, due to areinsurance program passed by the state legislature that will helpcover the costs for some of the state’s sickest patients in theindividual market. That helps keep premiums from spiking evenmore.

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But that won’t be the case in Raleigh, where Goodrich and herhusband, John Kistle, work as private consultants in the energyindustry.

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Goodrich, 59, and Kistle, 57, bought insurance through the ACAexchange in their state for three years. When premiums reached$1,600 per month with deductibles of $7,500 each, however, “it wasjust unbelievable. We decided just not to get insurance,” Goodrichsaid.

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Eventually, they bought short-term plans that cover onlycatastrophic illness or injury. That insurance is not consideredadequate under the ACA, so the couple could be liable for a taxpenalty as well.

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Teri Goodrich and her husband, John Kistle, of Raleigh, N.C.,gave up their expensive marketplace health insurance and boughtshort-term plans that cover only catastrophic illness or injury,even though that might leave them open to penalties under thefederal health law. (Family photo)

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Goodrich, who volunteers to help people with their taxes in herspare time, said she has run the numbers and thinks that insuranceis so expensive where she lives that the couple will be exempt fromthe penalty. That’s because the cheapest insurance would cost thecouple more than 8.16 percent of their income. Under the healthlaw’s provisions, the penalty does not apply above that becauseinsurance is considered unaffordable.

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“We try to be good citizens and do the right thing,” she said.“Next year, we’re trying to figure out how to make less than$64,000 so we can get subsidies.” That amount is equal to 400percent of the federal poverty line for two people, the cutoff forpremium assistance because Congress assumed those who earned morecould afford to buy affordable coverage.

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Sabrina Corlette, a research professor at Georgetown Universitywho specializes in health insurance, agreed that this is apopulation “that faced big hikes” in premiums when the health lawtook effect.

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But, she said, in many cases people in the individual marketwere previously paying artificially low premiums. Some of those oldpolicies had substandard coverage. For others, however, the higherprices are the result of one of the fundamental changes enacted bythe health law. “These are folks who were benefiting from a systemthat was affordable solely because insurers were able to keep sickpeople out,” Corlette said, adding that they are now being asked“to pay more of the true cost of health care.”

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This is a population that is also more likely to voteRepublican, said Laszewski, “which is one of the grand ironiesnow.”

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Republicans in Congress and President Donald Trump have not beenable to “repeal and replace” the health law. But some of theirefforts are undermining it — primarily the administration’s threatto stop paying billions of dollars to insurers in subsidies helpsome lower-income people pay their out-of-pocket costs. Theuncertainty surrounding those subsidies has led insurers to boostpremiums next year by an estimated 20 percent. Those who get premiumhelp from the government won’t have to pay more. But those who arepaying the full freight will.

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Also driving up premiums for next year, said Corlette, are theadministration’s threats not to enforce the individual requirementfor insurance and its decision to cancel most advertising andoutreach for the year’s open-enrollment period that begins Nov. 1.Both of those provisions bring more healthy people into theinsurance pool to help spread costs.

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“One could argue that the 2014 premium increases were painful,but it was about getting us to a system that was more fundamentallyfair and just,” Corlette said. “Now, it’s completely unnecessaryprice increases for unsubsidized folks that could so easily beavoided by a rational political system.”

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Kaiser Health News, a nonprofit health newsroom whosestories appear in news outlets nationwide, is an editoriallyindependent part of the Kaiser Family Foundation.

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