Wednesday, December 30, 2009

Are We at the Point of Accepting the Unacceptable?*

Health insurance coverage is only one aspect of the health care crisis that Americans are facing. The healthcare legislation passed by Congress mandates insurance for every citizen. But questions still remain regarding what will be covered and if it is affordable.

Marcy Wheeler at FireDogLake looks at how this legislation will affect a family of four making around $66,000 a year (three times the poverty line).
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.)

This family couldn’t even go through a normal childbirth without going into debt.

Nate Silver at Five-Thirty-Eight takes issue with Marcy's analysis. He believes the healthcare plan passed by Congress will be beneficial to most low or middle income families.
First of all, several of of Marcy's cost estimates are on the high side.

As Marcy points out, her assumptions may be favorable to this family in other ways -- her family doesn't have any debt, for example. Nor do I doubt that there are some families who would fit Marcy's template almost perfectly (although they should still be able to take advantage of the significant tax breaks that Marcy hasn't accounted for). But in general, this is significantly more than most two-child families will be spending on these services -- probably by a margin of $10,000 or so.

Nevertheless, that's not really the most important point. Rather, what is this family spending on health care now? ...if the family isn't buying insurance, their health care costs certainly shouldn't be figured as zero.

Frankly, unless they're living in New York or the San Francisco Bay or some other place where the cost of housing is very high, the family that Marcy draws from -- one which pays $1,600 per month for rent but does not buy health insurance for themselves or for their children -- does not have a reasonable and responsible gameplan to begin with. If they can't figure out how to squeeze out $430 per month in insurance premiums, what are they supposed to do in the status quo when somebody actually gets sick? You can object to the Senate's health care bill on libertarian/paternalism grounds, but it will leave the overwhelming majority of low- and middle-income families better off.
Yet Jonathan Cohn at The New Republic looks at what families can actually afford. He believes that the Senate bill is worth passing yet the reform is not good enough. He supports his position by acknowledging the dichotomy of his assessment.
Without reform, this family would either be uninsured altogether or paying high premiums for coverage that is, most likely, far less comprehensive that what the Senate bill would guarantee them. [...]

Families dealing with serious medical problems, particularly chronic diseases that require ongoing care, have enough problems without having to sweat out every penny. And even the best insurance policies leave people on the hook for expenses that fall outside of covered benefits and, as a result, don’t even count towards out-of-pocket limits.

Making those two arguments simultaneously is not easy. It's the political equivalent of walking and chewing gum at the same time. But if progressives can figure out a way to do it, the people that already stand to benefit from reform will benefit even more.

The sad part about all this analytic journalism is that if you need to pick through and parse out the benefits versus the disadvantages of the bill, then maybe the complexity is itself a detriment of this legislation.

For progressives, the answer lies in the clarity and simplicity of a single-payer, not-for-profit system. Of course, a public option or Medicare for all would be acceptable. No matter how many ways you look at it, this healthcare bill is not!


J. Lester Feder at the Nation has a review of the pro & cons of the Patient Protection and Affordable Care Act passed by the Senate. The Senate's draft of the bill must be merged with the much more progressive version passed by the House. Feder believes that despite very serious shortcomings of the Senate bill, it is necessary to pass healthcare reform now otherwise "another generation may pass before another chance will come to try again."

Despite these very serious shortcomings, however, the bill the Senate passed would reduce the number of uninsured Americans by 31 million by 2019. The Medicaid program will be open to new ranks of the country's poorest residents, and the near-poor and middle class will get subsidies to buy insurance. The Senate also advanced some important delivery system reforms that could chart a path towards reining in costs.

As disappointed as progressives are with the compromises Democratic leaders made to get this bill through the Senate--and as tempting it is to believe they may have gotten a better deal if they'd pursued a more aggressive strategy--they are on the verge of doing many other lawmakers have tried and failed to do. And if this effort fails, another generation may pass before another chance will come to try again.

Lester's view is common among people who feel defeated on the healthcare issue but who think this is the best that could be achieved. The attitude is "something is better than nothing."

Was that Ben Nelson's attitude when he fought against abortion funding? Was that Joe Lieberman's attitude or Max Baucus' position when they fought against the public option?

Hell NO!!!

They stood their ground and fought for the position they were espousing.

There wasn't one Senator that stood his/her ground on support of the public option. They all caved in. Do you really think any of the Representatives in the House will fight for 'The People'? Or will they allow the bullies of Congress to dictate from the moneyed corporate pulpit?

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