At the center of the affordability controversy is the question of what percentage of income the government can require a family or a single person to spend on health insurance and still be eligible for a subsidy. Baucus now says that the poorest people should be able to spend 2 percent of their income on insurance. Those with incomes at 300 percent of poverty would be required to spend 12 percent. (I guess you can say that’s better than the thirteen percent first proposed.)
The changes in the Chairman’s Mark were big news at the Associated Press, which moved a piece with the provocative headline, “Senator backs off tax on condoms, contact lenses.” Lots of news outlets picked it up, giving Middle America the firm impression that Baucus had at last come to his senses and was exempting such items as condoms, contact lenses, and Q-tips from the fees to be imposed on drug and device makers.
The AP story focuses on another Baucus “gift”: letting manufacturers of medical devices off the hook for fees assessed on products costing $100 or less. No tax, therefore, on pregnancy test kits, contact lens solution, and scented maxi-pads. But what’s to stop these manufacturers from simply increasing the prices paid by consumers? The AP story did get into that…sort of.
But where, we ask, was a discussion of some of the other truly pressing pocketbook issues—older people paying four times more for coverage than everyone else, and families required to fork over a big chunk of their income to Aetna and Blue Cross before qualifying for a subsidy? Condom-and-Q-tip stories may bring chuckles from readers, but they trivialize the serious financial consequences awaiting millions of Americans if Baucus’s plan, or a version of it, becomes law.