Every lobbyist swarming Capitol Hill these days knows that, when it comes to legislation, the devil is always lurking in the details, not lounging in the concepts. Yet it is concepts, not details, which are drifting down to the public—who will be in for a surprise when they realize that reform is not what they think it is. How these details are hashed out or slipped into a bill at the eleventh hour is crucial to the success or failure of reform. This is the second of series of occasional posts that will look at where the devil lies in key provisions of the health care bill. The entire series is archived here.
One of the great untold stories of health reform has been whether Americans who will soon be required to buy insurance can really come up with the cash to do so—oh dear, that meddlesome “affordability” question, to lapse for a moment into wonk jargon. The crux of any health reform bill is the percentage of income families will be required to spend on coverage, a point drowned out by all the hoopla surrounding the public option. The press has yet to focus on what ordinary people will have to spend.
A table produced by the Center on Budget and Policy Priorities shows some of the financial calculations that should by now have been finding their way into stories produced by the nation’s media. The numbers aren’t pretty. The table shows how much families with different incomes will have to pay for coverage under a proposed bill that combines provisions from the Senate Finance Committee and the Senate HELP (Health, Education, Labor, and Pensions) Committee.
A three-person family with an income at one-and-a-half times the federal poverty level—$27,465—would be required to cough up 4.8 percent of that income, or $1,318, to pay for a policy. Government subsidies would aid with the rest of the cost. A three-person family with an income of $54,930, a bit more than the median income of about $50,000, would pay 10 percent, or $5,493. But if, instead of a merged bill, the one approved by Senate Finance Committee triumphs, the family with the lower income would pay only $1,236; the family with higher-income would pay $6,592, or 12 percent of their income.
Either way, these are hefty amounts for families that don’t have much income to begin with. As blogger Robert Laszewski has noted repeatedly on his blog, Health Care Policy and Marketplace Review, few families with an income of $55,000 have $6,500 or even $5,500 lying around that they can spend on health insurance. If families don’t qualify for hardship exemptions, insurance would compete with money needed for the electric bill, or for gasoline, or for whittling down high-interest credit card balances. “Where will people be if they knew this?” Laszewski asks, arguing that “they need to know that before deciding whether an individual mandate makes sense or not.” So far, the press has not linked the raw numbers to the individual mandate.
But wait! It gets even worse. Fine print buried in the Finance Committee bill threatens more budget stress for already strapped families, especially those with low or moderate incomes. Even if families can afford to spend what Congress decrees, over time they will find themselves paying much more for their coverage—perhaps far more than the 2, 4, 10, or 12 percent that bill drafters have in mind for them right now. Last week, Julie Appleby of Kaiser News Service exposed this little devil lurking in the details. And it’s a doozy. Appleby reported:
The cost of coverage would shift from a percentage of income to a percentage of the premium, no matter how high the premiums go. Because premiums generally rise faster than wages, consumers getting subsidies would pay a larger percentage of their incomes toward premiums over time.
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The Scare America tactics from the 90's have been replaced by today's Confuse America campaign. Last Friday I attended a pro single payer rally at Blue Cross in Philadelphia where another group was carrying signs with red-slash circles over Obamacare. Since I arrived a half hour into the single payer rally, I confused the smaller anti-Obamacare group as single payer supporters and asked them to fill me in on what happened. One woman immediately launched into a fear schpeal about how Obama's plan is going to eliminate health insurance companies and create socialized medicine, which she opposes. She caught me by surprise (it's a group that seems to regularly protest outside the building) so I tried to explain that the current proposals are actually very friendly to the insurance companies (she told me to go away). Later, she protested the protesters chanting on her own about entitlements, bankrupting America etc. But at the end, I had a conversation with another anti-Obamacare protester who was completely rational. She said that she supports health reform but she doesn't support Obama's plan because she feels there are other ways to do this and we're not hearing about it. I told her that I support singlepayer but more than that I support a fully informed, public debate about the different ways to achieve healthcare for all, but that's not happening. On that important point, we were agreed. She was receptive to information (despite the other woman telling her not to talk to me) and seemed to appreciate a recommendation to watch Frontline's Sick Around the World which explains this complex issue the best; she was not aware of the Frontline film but was interested to know about it. So here were three concerned citizens taking a public stand about this very important issue yet all three had three totally different perceptions about what to support or oppose, which side to stand on. All three were variously informed. Two of the three trying to understand; another acting in fear of insurance companies going out of business yet protesting outside an insurance company against a plan favorable to them. Confused America out in force.
But that confusion does not necessarily mean opposition to reform, just a reflection of the lack of clear information. An important point to clarify is the definition of socialized medicine. For example, people do not understand that the UK has socialized medicine but so does the US in the Veteran's Administration. We need to talk about these things and not get upset with other angry people who may actually be in agreement but not realize it. And I too would like to know exactly how much healthcare will cost me in personal dollars. So far I can only estimate costs for single payer which HR 676 describes as an increased rate in Medicare's payroll deduction to around 4 to 5%. That math I can calculate and compare. But nothing else has my personal dollars attached to it, just vague, confusing language about scoring the budget and Congress proclaiming self-satisfaction about taking on healthcare.
#1 Posted by MB, CJR on Mon 2 Nov 2009 at 01:05 PM
The amounts you mention are annual. I divided it by the month and it's about $120 but minimum wage at $7.80 hourly(guessimate) only gives the person $1700+ annually. The lowest level--if Congress keeps it is $2950.00--preferably more--most of the very lowest would be covered by present Medicaid or advanced Medicaid. With that the problem lies more with the states coughing it up unless Fed gives more or makes the states' %ile smaller. Be careful with Kaiser's estimates. In health work they do a very good job but they want to have that 10% or 12% annually or bi-annually for themselves. They may be non-profit but the administration salaries are high and a lot is spent on research. Otherwise, why do they stay non-profit and Blue Cross--same price--isn't?? I was with them until I turned 65 and had checked every year they raised my monthly amount. One time out of 12 years they cut it back by order of State of CA. If the Congress can get closer to the $55,000 or $66,000 in salary for uninsured carriers, most would be in pretty good shape. No one in my family of 4 had a salary over $90,000 for 30 years and sent most of their kids to college. Only mine needed Pell aid. They all had insurance. The difference between $66,000 and $150,000 is a small percentage of the population--15% at the most. Everyone else either has more than they know what to do with or will gain some aid from Fed. That's still IF in the Senate, I realize. Write them and PRAY!!! If all other westernized countries can do it, so can we.
#2 Posted by Patricia Wilson, CJR on Tue 3 Nov 2009 at 07:03 PM
Trudy, thank you for bringing people's attention to a very serious problem, the bureaucrats' hidden willingness to punish families for depending on them.
This is a serious problem and this example is just one of many problems like this in these bills. One can only hope that after a potentially half decade long wait for this illusory "reform' public outrage forces them in 2012 or 13 or 2014 or 2015 to change this bill but that would require more funding, risking a Presidential veto for raising the deficit. Seems as if our 'hope' for real, not just superficial affordability is unsupported by reality without a different approach, though.
#3 Posted by Charles, CJR on Sun 8 Nov 2009 at 12:05 AM
Hi, I think MB brings up a good point in that a great many of the paid political folk who seem to be making a lot of money or something on this conflict don't want the real people on the two sides of this issue talking at all.
I suspect its because astroturf groups on both "sides" are being stealthily funded by the health care industries and they hope to eventually spin this as "americans didn't want health reform" when we actually need it so badly that we can't wait another year or two while they lead us around by the nose, so getting our two groups talking, around the organizers protestations- is essential. (Thats why many of them are stepping up the vitriol!)
I was talking with an older couple about this the other evening and despite their starting off with the fear of death panels, etc, they strongly supported Medicare and had no problem with expanding it to cover everybody, what they feared was the government trying to kill older people off, or losing their prescription coverage and being thrown to the wolves on prescription prices.
I told them that people in almost all other countries pay amounts that are often less than a quarter of what we pay and they looked really shocked. They have not travelled at all and they didn't know this!
#4 Posted by Charles, CJR on Mon 16 Nov 2009 at 12:50 AM