The High Cost of “Affordable” Health Care

[ipaint]

"Here’s a version of one family’s total household costs under the plan: a middle class family with two cars and some child care costs. Note, in this scenario, I’m assuming the middle class family will pay 7.9% of its income for health insurance premium, significantly less than the 9.8% the plan assumes that family could pay to get the subsidies available. This, then, shows what a family would be required to pay (or incur a penalty) under the 8% opt-out rule.

301% of Poverty Level: $66,370

Federal Taxes (estimate from this page, includes FICA): $8,628 (13% of income)

State Taxes (using MI rates on $30,000 of income): $1,305 (2% of income)

Food (using “low-cost USDA plan” for family of four): $7,712 (12% of income)

Home (assume a straight 30% of income): $19,275 (30% of income)

Child care (average cost for just one pre-school child in MI): $6,216

Health insurance premium: $5,243 (7.9% of income, max amount before opt-out w/o penalty allowed)

Transportation (assume 2 cars, 12,000 miles each, @IRS deductible cost of $.55/mile): $13,200

Heat, electricity, water: $1,500

Phone, cable, internet: $1,200

Total: $64,276 (97% of income)

Remainder (for health care out-of-pocket, debt, clothing, etc.): $2,091

In other words, assuming this family had no debt (except for that related to the two cars), no clothing costs, and no other necessary costs–all completely unrealistic assumptions–it would be able to incur just $6,970 of medical care out-of-pocket costs before spending all that $2,091 and going into debt (the opt-out is based on an insurance plan that provides 70% of costs, so this assumes the family will pay 30% of health care costs). Yet that family would be expected to spend up to $5,882 more out of pocket before the “subsidies” started picking up its out-of-pocket expenses. (If the family paid the full 9.8% of its income on premiums–at which point it would become eligible for subsidies under the plan–it would have just $825 left to spend on all other expenses, including health care out-of-pocket expenses.)"

http://emptywheel.firedoglake.com/2009/12/27/affordable-health-care/

[highplainsdem]

1. K&R.

But someone unrecced it at the same time, canceling out my rec before I started typing this reply.

Why are people so afraid to have anyone point out the economic realities of what this travesty of "health care reform" will mean for many people?

Btw, $1,500 for heat, electricity and water for a year is really low. $1,200 for phone, cable and internet would be low for many families, too. So that $2,091 remainder is probably much too high.

[dkf]

3. Federal taxes might be high

Mortgage deduction used?

But I agree with the post.

[CrispyQ]

4. You ask:

"Why are people so afraid to have anyone point out the economic realities of what this travesty of "health care reform" will mean for many people?"

I suspect that many have not done the math like the OP has. 301% of poverty level sounds like a lot - until you realize how disgustingly low the US poverty level has been set. The dems are going to pay dearly for this bill. Sadly, American families are going to pay more & not just in money.

To the OP, thanks for posting. K&R

[ipaint]

5. The author of this piece responds to a lot of questions at the link.

One of those is that he did underestimate utilities.

It's interesting the naysayers expect this family to severely cut back on everything in order to afford for profit private health ins. Of course there go all the jobs for the services this family and millions like them uses and the "savings" from cutting back is going into the profit column of a private middleman we don't need.

Some people would gnaw there own arm off to feed the private ins. industry.

[Echo In Light]

12. Amazing, isn't it?

[AllyCat]

2. Well, no more phone, internet or cable. time to eat on the cheap

(oh wait, that is cheap). Apply for assistance on the heat bill. Or, just use the Weber grill. work off shifts to save on day care. Move to a cheaper house. See? problem solved!

No hassle or stress there.

Do I need the sarcasm thingy?

This bill sucks!!!

[terrell9584]

6. 1994 will repeat

If this thing passes you can bank on that. And more importantly, Democrats will have forever surrended their title as the party of the working class and Republicans will be able to hone in their right wing oriented populism to bring them in.

[mzmolly]

7. Question. Who makes $67K annually and doesn't have an employer offer insurance?

If it's a person who's self employed, this person's modified adjusted gross, is what would be used to determine the payment amount. As such the numbers FDL uses to make the case are not accurate. One would have to assume the income is after taxes not before.

Is FDL familiar with the Kaiser Family Foundation calculator?

http://healthreform.kff.org/SubsidyCalculator.aspx

$6,504 is the annual cost for the average family above using a figure of 67K AFTER taxes. In addition a family could opt for a less expensive plan.

We pay about the same percentage of our income through an employer and I don't consider the plan affordable. But we haven't a choice.

[ipaint]

9. In articles I have read 28% of the uninsured

make over the 300% cutoff in both the individual and family categories. Census numbers are cited as the source of that info. As soon as I find the specific census report I will post it.

[mzmolly]

10. That may be due to being self employed and having a pre-existing

condition? :shrug:

Again, the 67K number would determined using modified adjusted gross. So that would impact the numbers a bit. Most self employed people who end up at a 67K AGI, make much more and have a good tax accountant. ;)

I do think it's prudent to examine how individuals will be impacted, so I thank you for posting this regardless.

The President and other Democrats have not done a very good job of explaining the plan in nuts and bolts terms, so we're left with mythical information and grasping at straws, unfortunately.

[ipaint]

13. And apparently even a good tax accountant can't manage to fit health care into the budget.

As a side note. Some inside info- The IRS call centers just got hit with huge budget cuts and just for the normal tax filing season the ratio of answered calls is predicted at 62%. Unanswered calls to the IRS at tax season are predicted to be 38%.

They are already receiving calls from panicked people about this new health ins. "tax". They remain totally unprepared for the tsunami of calls for info once this passes in Jan. Expect bedlam.

[mzmolly]

14. A good tax accountant can't demand that an insurance company

provide you with health insurance coverage. I know of a 25 year old man who was told he'd have to pay $800 a month for catastrophic coverage alone. This because the state he lived in had an exchange and mandated coverage. Otherwise he'd have gone without coverage - period. He couldn't afford the premiums for long as he made about ten bucks an hour. This was in the 1980's and the man in question, is diabetic. Under the new plan, he'd qualify for Medicare.

[ipaint]

19. You assumed something I don't think at all.

My point is that even a good tax attorney can't find the hypothetical people who make over 301% of poverty the money they need to spend on health ins.

[mzmolly]

22. No one is paying our health insurance bill either. That said, under the new plan, one can pay the

penalty (the max fine is $750) and buy health insurance when they actually need it. Not a bad deal for what amounts to catastrophic coverage under the new legislation.

[ipaint]

23. I doubt ins. companies will that continue if it happens at all.

This bill was written by ins. companies. They aren't that stupid nor did they throw away 700 million in bribes to buy a loophole for consumers.

[mzmolly]

25. The bill states insurance cos. can't deny those with pre-existing conditions.

The way this is possible is via mandates, unfortunately. And for those unable to pay the penalty or buy insurance, there are hardship waivers and even religious exemptions. In fact, I'm sure many will take advantage of waivers and exemptions? However, even people who refuse or can't afford to pay in, will not be denied HC coverage if/when they become ill. Children who have an illness will no longer be denied coverage, immediately after the bill passes.

I don't like the idea of mandates, but when I play the scenario through I think there is much to be gained in return.

Peace

[ipaint]

27. Insurance companies will always find ways to deny coverage.

They have to. It's how they profit.

[mzmolly]

28. The point is they'll profit from spreading

the risk vs. denial of coverage. And profit margins are limited under new regulations (afforded in the HC bill) as well.

[ipaint]

31. We disagree on a basic point. You seem to think if congress write a bill with regulations

for the health ins. industry it ends there. I think that as long as we have a congress that is bought by the industry any regulatory reform will be window dressing and once folks start digging into this monstrosity of a bill and look at the real consequences for real people they will find loopholes in every attempt at regulation. I'd like to think I am wrong but I haven't been wrong about every major bipartisan legislation since clinton was elected and I was right about the public option and it's ultimate demise.

If we had a president and a congress that took health care reform seriously we would have a very different bill. Unfortunately that is not the case.

Time will tell. It's just a shame that the lessons of nafta, welfare reform, deregulation etc. will be ignored once again for political gain and a checkmark in the win column.

[mzmolly]

32. I can fully understand why you would feel this way.

Peace. :hi:

[amborin]

39. it is a sham---look at CA---had to drop suits against Anthem, too expenisve & time-consuming to

prosecute them

[Nikki Stone1]

44. Exactly

.

[Nikki Stone1]

43. .

.

[mdmc]

38. A private practice attorney, a psychologist, a small business owner

I know many, many professionals that are one illness away from major trouble. Most keep 5-10K of cash on hand for that emergency. Most have major lines of credit for when that day arrives..

[Melissa G]

42. Probably a LOT of self employed couples

lots of self employed couples we know look like this.

[billyoc]

8. Better get that credit flowing, so we can buy food with our credit cards.

[mzmolly]

11. LOL

That's good. ;)

[inna]

15. KR+11, and please see this sister thread:

:hi:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7338574

[ipaint]

20. I missed in my search or I would have kicked it, sorry! nt

[inna]

35. hey, it's never too late! :)

more people read it, the better, right? :)


Btw, I love Marcy, but I believe she made a (minor) factual mistake in that latest post, and IMO it's not as strong as some of her older posts. I quoted and linked to a couple of her older posts in my thread, I highly recommend to read them if you haven't seen them yet (especially the Neo-Feudalism one, I first read it today.)

[Nite Owl]

16. If one or more have a preexisting

condition that premium can be a lot more. And don't forget all the deductibles besides the copays which are thousands of dollars. It's healthcare that they are making sure we can't really use.

[ipaint]

21. Or if they are over 50. nt

[amborin]

17. K&R

[LWolf]

18. K & R

This is exactly why I don't use my current insurance, which is partly paid for by my employer.

[TheKentuckian]

24. Poverty for a single person is $10,830, or in other words about 66% of min wage full time

or in other words an utterly bullshit metric to determine affordability.

People aren't going to be able to afford care whether they have coverage or not and employer plans will quickly work the same way or go the way of the dinosaur.

[ipaint]

26. The "let them eat medicaid meme" is also a bunch of baloney.

What has received less attention is the potential impact of the major Medicaid expansion proposed in the House and Senate reform bills. By requiring states to cover everyone (not just children and mothers) in households earning less than 133 percent of the federal poverty level, it is estimated, the legislation would add about 15 million new people to the Medicaid rolls. That doesn’t even begin to equal the need: two-thirds of the uninsured are poor or near-poor, and the House and Senate bills would leave 18 million and 24 million people, respectively, without coverage by 2019. But even if we raise the number of people on Medicaid from 35 million to 50 million, will there be enough physicians willing to see them?

By one estimate, state Medicaid programs pay, on average, only 60 percent as much as private insurance does. As a result, many physicians will not see Medicaid patients. A recent study found that 28 percent of physicians don’t accept Medicaid patients, and 19 percent accept some. Only 40 percent will take anybody on Medicaid.

Primary-care physicians have an even more dismal track record. Forty percent of general internists, 35 percent of family physicians and GPs, 18 percent of pediatricians, and 28 percent of ob/gyns do not accept any Medicaid patients. Thirty-one percent of internists and FP/GPs take all Medicaid patients, 42 percent of pediatricians do, and 34 percent of ob/gyns do.

http://m.industry.bnet.com/healthcare/10001447/medicaid-expansion-may-fail-because-of-doctors-refusal-to-see-patients/

So the middle class gets health ins. with no access to care because of lack of money after the premium and the poor get medicaid but can't access care because of lack of doctors.

A complete disaster in the making. And after the middle class gets their bill who thinks they are going to get all excited and happy about footing a much needed major expansion in medicaid to provide barely adequate care for the poor.

[mzmolly]

29. The person in your scenario, qualifies for free Medicaid under the pending legislation.

http://healthreform.kff.org/SubsidyCalculator.aspx

Those making up to 130% of poverty level, $14,079 for a single person, are fully covered.

[ipaint]

33. If they can find a doctor.

These folks aren't able to drive all over creation looking for someone to accept medicaid. God forbid they have to find a specialist. Now that they will be competing with 15-20 million other new medicaid recipients it will be that much harder.

[mzmolly]

34. The new bill also increases reimbursement

in rural areas, thankfully. Not to mention funding community clinics.

[TheKentuckian]

36. Which is STILL less than min wage, which is way below a living wage.

The point is the poverty level is absurd in the 1st place and therefore anything based off of it is going to be stupid on a good day. 150% struggles, 200% struggle a lot, 300% struggles mightily, and it sucks even more for a while until you're pretty well off and premiums AND total out of pocket become a smaller percentage than the person at 150% is stuck with.

I've pitched some bullshit in my time but no one can sell this steaming pile. Only the very poor that expect to stay very poor and the at least rich that expect to stay that way or move onto wealthy have any real expected benefit here. Anyone that can afford to pay attention but has to pay attention to what they pay is in for a horse whipping.

[mzmolly]

37. We'll have to agree to disagree.

I feel that this bill, while imperfect, will help many.

Peace

[Nikki Stone1]

30. Thank you. I agree with Bill Moyers here:

"Something's not right here. One year after the great collapse of our financial system, Wall Street is back on top while our politicians dither. As for health care reform, you're about to be forced to buy insurance from companies whose stock is soaring, and that's just dandy with the White House.

Truth is, our capitol's being looted, republicans are acting like the town rowdies, the sheriff is firing blanks, and powerful Democrats in Congress are in cahoots with the gang that's pulling the heist. This is not capitalism at work. It's capital. Raw money, mounds of it, buying politicians and policy as if they were futures on the hog market. "

http://www.pbs.org/moyers/journal/12182009/watch.html

[inna]

40. great quote, thanks for it.

here's another good one in return (if you haven't read this already): :)

"The class warfare is over -- we lost. I want to make that announcement today. Working people lost. The middle class lost."

"Don't tell me about class warfare. Come to my neighborhoods in Cleveland. I will show you class warfare. I’ll show you hollowed out areas. I’ll show you businesses that went down because they don’t have access to capital. And on Wall Street it is fat city. Don’t tell me about class warfare."

"All across this country people are starved for capital. Small businesses are failing, you have shopping centers that are becoming vacant because people can’t afford the rents anymore because the people who own the malls the developers are getting cash calls and credit is tightening."

"The separation between the finance economy and the real economy is real. This is not some fake idea. You can’t call that class warfare. That’s a fact."

"The wealth of this nation is being accelerated upward."

PS: oops, i forgot the link: http://www.alternet.org/workplace/144650

- but you probably already knew who said it anyway...

[Nikki Stone1]

41. +10,000

.

[juno jones]

45. K&R! n/t