The Real Costs
Dick Morris succinctly describes some of the costs to the American people with the Baucus bill that is being proposed. Dick Morris and Eileen McGann : How Much Obamacare Costs the Average Family - Townhall.com
My question to those for this reform is this;
If you cannot afford health insurance now or cannot afford it for your employees, how in the world are you going to come up with the money when it is mandated?
Whether or not you now have health insurance, Obama’s health care bill will cost you dearly.
If you don’t have insurance, you will be required to buy it. The legislation specifies how much you will have to pay for the coverage before any subsidy kicks in. All during the campaign, Obama kept speaking about affordable coverage. Now it appears that his definition of “affordable” might be a bit elastic.
If your household income is $66,000 a year, slightly above the national average, Obama’s health care bill will require you to spend 12 percent of your income -- about $8,000 a year or almost $700 a month -- to buy health insurance before you get any federal subsidy.
Even those making less will have to reach deep into their meager resources to satisfy Obama’s statutory requirement. Families scraping by on only $44,0000 a year will have to pay 7 percent of their income (about $3,000) on insurance. Even those making just $33,000 will have to ante up 4.5 percent of their income (about $1,500) for health insurance. The required payments reach so far down the scale that those who are living at the federal poverty level of $22,000 will have to shell out 2 percent of their totally inadequate incomes ($440) for insurance.
That Obama is charging premiums to those living at or on the border of poverty is absolutely incredible! And this from a candidate who pledged that he would not tax the middle class!
If you have insurance, you will get hit by his proposed 40 percent tax on insurance premiums.
When the tax -- and the legislation -- takes effect in 2013, all families making about $120,000 or more in combined household income (14 percent of all families or one in seven) will have to pay the tax.
By the next year, 2014, the tax will hit every family making more than $100,000 (about 18 percent of all families or one in six).
By 2019, 10 years hence, the tax will reach down to affect every family making more than $75,000 a year (31 percent of families or one in three).
The tax will take 40 percent of all premiums above $21,000.
So if you don’t have insurance, you will be socked with a mandate to buy coverage and pay a hefty proportion of your income to do it; and if you have insurance, you will be hit with an excise tax on the coverage.
(In theory, it is the insurance companies that have to pay the tax, but the Senate Finance Committee “assumes” that they will pass the tax along to their policyholders).
These costs make a mockery of Obama’s oft-repeated pledge to avoid any tax increase that would impact those making under $250,000 a year. He finances about half of his health care plan on the backs of the elderly by cutting Medicare and inducing scarcity and the other half by premium taxes and insurance purchasing mandates on the middle and lower middle class.
My question to those for this reform is this;
If you cannot afford health insurance now or cannot afford it for your employees, how in the world are you going to come up with the money when it is mandated?
Whether or not you now have health insurance, Obama’s health care bill will cost you dearly.
If you don’t have insurance, you will be required to buy it. The legislation specifies how much you will have to pay for the coverage before any subsidy kicks in. All during the campaign, Obama kept speaking about affordable coverage. Now it appears that his definition of “affordable” might be a bit elastic.
If your household income is $66,000 a year, slightly above the national average, Obama’s health care bill will require you to spend 12 percent of your income -- about $8,000 a year or almost $700 a month -- to buy health insurance before you get any federal subsidy.
Even those making less will have to reach deep into their meager resources to satisfy Obama’s statutory requirement. Families scraping by on only $44,0000 a year will have to pay 7 percent of their income (about $3,000) on insurance. Even those making just $33,000 will have to ante up 4.5 percent of their income (about $1,500) for health insurance. The required payments reach so far down the scale that those who are living at the federal poverty level of $22,000 will have to shell out 2 percent of their totally inadequate incomes ($440) for insurance.
That Obama is charging premiums to those living at or on the border of poverty is absolutely incredible! And this from a candidate who pledged that he would not tax the middle class!
If you have insurance, you will get hit by his proposed 40 percent tax on insurance premiums.
When the tax -- and the legislation -- takes effect in 2013, all families making about $120,000 or more in combined household income (14 percent of all families or one in seven) will have to pay the tax.
By the next year, 2014, the tax will hit every family making more than $100,000 (about 18 percent of all families or one in six).
By 2019, 10 years hence, the tax will reach down to affect every family making more than $75,000 a year (31 percent of families or one in three).
The tax will take 40 percent of all premiums above $21,000.
So if you don’t have insurance, you will be socked with a mandate to buy coverage and pay a hefty proportion of your income to do it; and if you have insurance, you will be hit with an excise tax on the coverage.
(In theory, it is the insurance companies that have to pay the tax, but the Senate Finance Committee “assumes” that they will pass the tax along to their policyholders).
These costs make a mockery of Obama’s oft-repeated pledge to avoid any tax increase that would impact those making under $250,000 a year. He finances about half of his health care plan on the backs of the elderly by cutting Medicare and inducing scarcity and the other half by premium taxes and insurance purchasing mandates on the middle and lower middle class.
Labels: healthcare reform, Obama
posted by Anonymous at 5:30 AM
28 Comments:
H.B., the left does not care about the harm to the economy or individuals and families.
If this goes through the costs will be through the roof.
CBO calculations are of little value since they are required to presume the outline of the proposed legislation will go as planned. They do not have the liberty to predict changes in behavior like think tanks.
Past government programs never stay within budget.
Congress also acts like "costs" bore by the states and private sector don't count. Not only will the congress fail to stay within budget, but fines, taxes, increased prices because of mandates, etc will kill consumer discretionary spending. Jobs will be lost and the declining standard of living will be felt by all.
Also, the inflation (maybe hyperinflation) will push more into the higher tax brackets of the Pelosi bill. There is no inflation protection in the bill. It will be like the AMT.
If the costs go above what was stated, I think the members of Congress who voted for the plan, should be required to pay for the additional costs. That is the only way I can 'trust' what they are saying.
I agree that the Senate Finance Committee's plan does not go far enough to make health coverage affordable.
What can't be ignored, though, is that it highlights the overall problem as something much greater than simply a count of the currently uninsured.
Middle class families currently pay an average of 22% of their incomes for health insurance when dealing directly with the private insurance market. The seven to 12 percent shown here would be an improvement.
Even those who participate in group plans subsidized by their employers are already paying an average of around 8% of income in addition to what their employers pay and their co-pays.
While premiums are increasing, level of coverage is often decreasing meaning that even folks who thus far have been able to maintain what is considered "good" health coverage are losing ground fairly quickly, paying more for less and exacerbating the problem.
Based on very recent estimates received from a local group health insurance provider for my family (with no preexisting conditions, regular medications, or otherwise damning medical histories), the Senate Finance Committee plan would save us $500 a month.
According to a January 2007 publication “Making Americans Care about Health Care Spending”, the typical American family spends just 5.4% of its income on healthcare and 4.5% on clothing. They spend 40.8% on housing, 18.3% on transportation and 18.2% on food.
This increase to 12% on this bill and likely even more with the recently passed Pelosi bill, the typical American family will more than double what they currently pay. These bills will cost Americans more and destroy healthcare delivery as we know it.
I have dozens and dozens of friends and family and not a single one pays anywhere near 22% of thier income. What fantasy world does bluegill come from
The article HB references was published in 2007 but clearly states in its introduction that it uses numbers from 1998. Things have changed drastically since then.
The Commonwealth Fund conducted a study published in 2009 showing how medical insurance costs have trended between 1999 and 2008. A large amount of data, broken down state by state, is included.
The full report is here.
An excerpt:
Between 1999 and 2008, employer-sponsored family health insurance premiums rose by 119 percent
nationally, while median family income rose by 29 percent. Such a rapid increase in the cost of employer-sponsored health benefits has forced difficult choices
at workplaces across the country.
Studies indicate that slower growth in wages and lower savings for
retirement (worker and employer contributions) have been part of the trade-off to preserve health benefits.
Despite such trade-offs, the monthly cost of premiums
paid by workers and their families is up—consuming an ever-greater share of any wage increases they
might receive.
At the state level, premiums have risen rapidly, and far faster than average incomes. In the five years
from 2003 to 2008, total premiums for family coverage under employer-sponsored plans rose a cumulative
average of 33 percent. The five-year increase in family premiums ranged from about 25 percent in the three
lowest-growth states (Michigan, Texas, and Ohio) to 45 percent in the two highest-growth states (Indiana and North Carolina).
Twelve states saw increases of 40 percent or more and 36 states saw increases of 30 percent
or more— well above the rate of income growth.
cont'd.
By 2008, the average employer-sponsored family premium across all states was $12,298, ranging
from more than $13,500 in Massachusetts, Minnesota,
New Hampshire, and Indiana to $11,000–$11,500 in the 14 states with the lowest average premium costs.
Average family premiums in the highest-premium-cost states were about 25 percent above the lowest-cost states.
People with employer-sponsored insurance typically do not see the total annual cost of the premium,
since most employers pay a substantial share of it.
Nevertheless, the steady increase in premiums has been consuming resources that employers might otherwise have earmarked for salary or wage increases, or for other benefits.
When viewed as a percentage of
workers’ income, health insurance premiums (including both the employer and employee shares) are up for middle-income families across the country. By 2008, annual family premiums were 18 percent or more of median income in 18 states, compared with just three states in 2003.
In three states— Mississippi, Tennessee, and West Virginia—family premiums averaged 20 percent or more of median income for middle-income households within the under-65 population.
By 2008, average premiums were at or above 16 percent of median income in 37 of the 50 states and the District of Columbia. And only three states had premiums averaging less than 14 percent of median income, down from 13 states in 2003.
Cost pressures are particularly acute in states in the
South and the south-central U.S., where premium costs are high relative to incomes. The high ratio of premiums to income often reflects both high premiums and
median incomes that are below the national average.
Many states with premiums above the national average have family
incomes below the national average.
With premiums increasing faster than incomes in low as well as higher-income states, health insurance has become ever less affordable.
Premium increases have occurred despite the fact that employers
have been raising cost-sharing or limiting benefits in an effort to moderate annual premium growth. Thus, as of 2008, premiums are often buying less in scope
of benefits or financial protection than they had been at the start of the decade, and families are paying not only higher premiums but higher out-of-pocket costs
for medical bills.
Deductibles for employer-sponsored plans overall have tripled between 2000 and 2008, and those for plans offered by firms with fewer than
200 employees have more than quadrupled during this
period.
Note that the 22 percent figure I quoted earlier from a different source is only slightly higher than what's quoted here and was attributed to families buying insurance individually rather than through large group plans, which would account for the small difference. Otherwise, when one removes the employer subsidy and places the full burden on the consumer, the numbers match up. Again, 12 percent of income would be a reduction in costs for middle income families.
Also, HB's post from the Morris and McGann article says that $66,000 a year is "slightly above the national average". The median U.S. household income in 2008 was $50,303, substantially less than $66,000, which means that the Senate bill would cap their payout at seven percent of income, not 12, further increasing the savings for far more families than is implied by the article.
Also note that the estimate I received for family insurance just a couple of months ago was for $1,159.91 per month, which easily fits into the study's findings.
I received notification literally today that a) patient out-of-pocket maximums will soon increase, b) patient co-pays will also increase and c) the premium will also increase to $1,202.85 per month, $515 a year more for less coverage than what was originally quoted.
Throw whatever ideology, old numbers, and anonymous cowardice you like at it, but that's reality, the real costs, both in New Albany and around the country.
Bluegill I've shopped the private market in the last month as well and my findings are similar. A family of four, absolutely healthy non-smoking with no preexisting + maternity coverage is insanely expensive per month.
One constant in this entire healthcare debate is how out-of-touch conservatives are on this issue. HB's posts highlight this on a daily basis.
B'gill and B.W., the central authority cant determine cost and set price. You can wish it all you want, it will not work!
Only a true free market will set a price based upon value. That means less central control, not more.
The product advertised as medical insurance is not an insurance by any other definition. It has been distorted by the government at state levels and federal and look at the mess you lament!
The average individual premium is about $4800/per year and out of the premium bluegill quoted, individuals only pay about 27% of it and companies pick up the rest. There is a small subset of patients who do have to buy insurance on the open market but it is a very small percentage overall.
According to Bureau of Labor statistics last month http://www.bls.gov/news.release/cesan.nr0.htm
the average income is $63,500 and healthcare spending is not as high as reported.
The problem with healthcare costs is consumer demand which is only going to increase under these government mandates.
Insurance was never intended to pay for routine healthcare services. Insurance is a mechanism to spread risk for catastrophic events.
The liberals cannot seem to grasp this concept. Inidividuals should not have to pay for their neighbors routine office visits, shots and general medical care. These should be individual responsibility.
The more government gets involved and mandates more and more basic care, the higher costs and premiums will become. They even admit that the Pelosi government option will be higher than current premiums.
Individuals should pay for their basic medical care and use insurance as it was intended: to pay for unexpected high cost tests and/or procedures and only if they choose to do so.
This comment has been removed by the author.
The product advertised as medical insurance is not an insurance by any other definition.
I absolutely agree with this statement.
It is a fact that everyone is born and will die. It is a fact that nearly everyone will need healthcare at some point in their lives.
Thus, needing healthcare is not exactly a fortuitous event like an ice storm or an auto accident. Everyone will need healthcare, it is a question of how much and when.
But, insurance companies try to spread this risk like regular insurance by cherry picking who they will cover and what they will cover, which makes sense from a market perspective. This system, however, leaves a lot of people without the ability to obtain insurance and therefore pay for healthcare, which everyone needs. That's the insurance market at work, people.
And let's not forget that human beings are not cars and houses, although our "compassionate" conservative friends would like to treat us as such.
You can't commodify human beings. Sorry. Market-based solutions might be out there, but healthcare is too important to leave solely to the whims of the "insurance" market.
Market based solutions do work and are well documented in areas like plastic surgery, Radial Keratotomy and other parts of medicine.
If health care is a benefit that individuals believe is worth having, then individuals need to understand it's a benefit worth paying for! And I stress individuals!!
Not everyone needs or wants healthcare and they accept the consequence of their decisions. The key is they decide.
Healthcare is a service and as such it should be paid for by the individual receiving it.
Health Insurance has morphed into something it is not and thereby will never be sustainable.
There is a difference between average and median, as should be fairly obvious to anyone with a medical degree.
If you think that a more direct market driven system is superior, there's nothing stopping you from running a cash-based practice.
Rather than spend considerable time condemning various third-party payer schemes, you could simply provide an alternative. In fact, you could've done that at any time during your career long before mandatory coverage issues were prevalent. By taking personal responsibility for your income, you wouldn't have been hampered (or helped) by any of this insurance nonsense.
However, I do have questions.
If Joe Jones is in a life threatening car accident and lacks both medical insurance and the means to pay for services rendered at his local county hospital, who covers those expenses?
If he declares bankruptcy as a result of claims against him, who covers those debts?
If he's no longer able to properly care for his children as a result of those financial difficulties, who bears responsibility for them?
If his contributions to the tax base are lessened, who picks up the slack or gives up services?
Being a doctor, I assume you'd advocate that he should, in fact, receive treatment for his injuries but I could be wrong.
Not everyone needs or wants healthcare and they accept the consequence of their decisions.
Who are these people who don't need healthcare? Sure, there are periods in one's life where, if you are blessed by the genetic lottery, don't get injured in a random accident, and live a healthy lifestyle you can do without much healthcare, but this was not the case when you were born and certainly won't always be the case. The vast majority of us will need healthcare, eventually.
No one is forcing competent adults to receive healthcare. They can choose to lay down and die, stay home 2 months to (hopefully) recover from a minor infection, etc., and I supposed we could let them. But, there are far-reaching economic and societal impacts to that decision that impact the rights and pocketbooks of everyone else.
Sorry but just because you were born and took a breath does not entitle you to health care, much less insurance.
Bluegill has described precisely what “Health Insurance” is all about and exactly what I have been saying. It is for unexpected catastrophic health related events.
If government did not require 1901 separate mandates on insurance companies and if insurance companies were allowed to compete across state lines, catastrophic insurance would be affordable and available for people just like bluegill described.
It is because of government mandates that health insurance has morphed into the monster it is and is precisely why it cannot be controlled.
Bluegill has succinctly made my case.
Wrong, HB. It would be available at a slightly cheaper price for healthy people. The "insurance" market provides no incentive to insure sick people, people with pre-existing conditions, bad credit, etc.
Thus, all of the scenarios bluegill described would still occur and you and I would eat the cost as would the larger economy.
hey smith, a life-threatening car accident is not a pre-existing condition. but if you'd have it your way, why buy insurance until you have a problem. if everything will be covered at anytime,there is no incentive to buy it in advance. oh yeah, except for the incentive of now being thrown in jail. very compassionate of you liberals
B.W., no you are wrong! There is no free market for insurance so you have no idea what the market might offer.
More fundimentally, you have no right to medical care or health insurance.
if you'd have it your way, why buy insurance until you have a problem.
Very good point, which is why I support mandatory health insurance....just like nearly every state requires mandatory auto insurance to help offset the cost of uninsured drivers (even though first-party uninsured and underinsured motorist coverage is available). It's not to protect the uninsured driver, but to lower the societal and economic cost of getting hit by uninsured drivers.
More fundimentally, you have no right to medical care or health insurance.
That gets to core philosophy that we will never agree on, so I won't go there.
A more tangible reason to provide access to healthcare is that it is simply good public policy - better for the economy and less of a drag on the rest of us. Just like requiring auto insurance.
B.W. you are correct on the core beliefs, fascist socialism vs liberty!
I'd love to hear an explanation of "fascist socialism", even if it is from someone too ashamed to let anyone know they equate two.
har har. Dying of a treatable disease is the highest form of liberty, right? You sound like the fascist/socialist...more like Social Darwinist. Survival of the fittest...let the market decide who lives and dies.
Darwinism? Good grief.
A few days ago, an active, local conservative blogger was advocating that we should pool our resources nationwide to achieve more efficient health care.
And HB has argued that Medicare must be strengthened.
The times they are a changin'.
Ain't intellectual history a b*tch?
Here it is...http://www.econlib.org/library/Enc/Fascism.html
And Darwin's theories were used by the socialist movement to advance their agenda of all powerful central government planning. It also led to the Nazi (national 'socialist' party) atrocities in the name of assuring the pure race. Social Darwinism was a "progressive movement", not a classical liberal one.
Yes, I know that lots of folks have adopted "Social Darwinism" over the years.
I speak of the worst kind - the social evolutionists of the Gilded Age...which is exactly where conservatives want us to return. Scary, scary thought.
Post a Comment
<< Home