Category: health care Page 32 of 35

Emptywheel has crunched the numbers on the Baucus plan, and has come up with how much money it will leave families if they actually have to use the insurance for any significant health care problems.  Here are her numbers for a family of four earning 300% of the poverty levels or $66,150.

Federal Taxes (estimate from this page): $8,710 (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): $9,060 (13.5% of income)

Home (assume a straight 30% of income): $20,100 (30% of income)

Bad Max Tax: $20,610 (31% of income)

Total: $59,785 (89% of income)

Remainder for all other expenses (including education, clothing, existing debt, transportation, etc.): $7,215 (or 11% of income.

Now, the House bill stops subsidies at EXACTLY the same level, 400% of poverty level. We can use Emptywheel’s numbers for all of this.  The difference is that the House plan limits premiums to 10% of gross income at 300% (pg 137, pdf), and out of pocket expenses to $10,000 per family.

So that makes the House Tax: $10,000 + 6,615 = 16,615 or 25% of income (as opposed to 31%).

The difference between the House plan and the Baucus plan is $4,025. Total expenses are $55,7607, or   The remainder for all other expenses is $11,240 or 17% of income.

It’s not a meaningless difference, $4,025 a year is $335 a month.  But it’s not huge , either.

Now, one might say the real difference is that the House plan has a public option, which will drive down costs.  At best that’s questionable.  I don’t think so, neither does Taibbi, and neither do various other people.  Yes, a good public option would, but the House plan has a crippled public option.  I strongly expect that most people at 300% are going to be paying 10% of their income, because that’s what insurance companies are going to charge them, since that’s what they can charge them.

If you object to the Baucus bill because it will force families to buy insurance that will still financially cripple them, then there’s little reason not to object to the House Bill for the exact same reason.

Update: Dave Johnson points out the following (which would be true of Marcy and my numbers):

It seems you want to deduct the $20K insurance premium from gross income before you calculate the federal tax, so fed tax shouldn’t be $8710, it should be

$66,150 – 20,610 = 45,540 * 13% tax = $5920 tax.

The difference is $2,790 to both the Baucus and House plan numbers. Which is slightly better for both of them. I leave it to readers to decide if it’s enough better to make either of them a good deal.

Well, now Matt Taibbi is saying it, maybe progressives will listen:

In the end, the Blue Dogs won. When the House commerce committee passed its bill, the public option no longer paid Medicare-plus-five-percent. Instead, it required the government to negotiate rates with providers, ensuring that costs would be dramatically higher. According to one Democratic aide, the concession would bump the price of the public option by $1,800 a year for the average family of four.

In one fell swoop, the public plan went from being significantly cheaper than private insurance to costing, well, “about the same as what we have now,” as one Senate aide puts it. This was the worst of both worlds, the kind of take-the-fork-in-the-road nonsolution that has been the peculiar specialty of Democrats ever since Bill Clinton invented a new way to smoke weed. The party could now sell voters on the idea that it was offering a “public option” without technically lying, while at the same time reassuring health care providers that the public option it was passing would not imperil the industry’s market share.

The public option, isn’t.  As I noted quite some time ago.  It will not reduce costs, it is questionable that it is even viable.  And yet progressives are going balls-to-the-wall for a non-viable public option which won’t even reduce costs rather than, at the least, fighting for a real public option?

Folks, you are being sold a bill of goods.  The people shilling for this version of the public option, whether politicians or others, are shilling for something that won’t work (not that even a nominal public option is likely to be in the final bill).

The best thing that can happen, at this point, is for nothing to be passed.  Because right now it looks most likely you are either going to be forced to buy insurance without an option to buy a government plan, or you’re going to be forced to buy insurance with the possibility of buying government insurance that’s no cheaper than private insurance, and which may not even be able to stay in business (it does have to succeed without any subsidies.)

Badtux says it best when it comes to what should have happened, what still should happen, but what won’t happen:

Or Obama can lead. He can say “Enough. You tried, you failed. We will expand Medicare to all.” Then the Republicans have to run against Medicare, and if they do that, they’ve lost. Medicare is the most popular government program aside from Social Security, and anybody running against Medicare is taking on old folks as well as taking on something that’s already a known quantity. You can’t say Medicare has “death panels” because it doesn’t. You can’t say Medicare rations care, because it doesn’t — it won’t pay for everything, but you can always buy Medi-Gap coverage from private insurers for the things it won’t pay for. And the bill would be literally 5 pages long, most of which would be boilerplate around the three paragraph payload, one paragraph expanding Medicare to everybody, the second one which raises the Medicare payroll tax to 4/4%, the third which adds a 5% Medicare surcharge to the income tax for everybody who makes over $500K/year. I’ve worked the numbers and that would pay for every dime that’s currently being paid through private insurance, and leave enough to cover the current uninsured. Three paragraphs. That’s all it would take.

But yeah, that’s not happening.  So… get ready to pay out for insurance you can’t afford, with co-pays so high you can’t afford to use it even after you’ve been forced to cough up for it.

Plus ca change

A friend asked for the case against a plan with no public option, a mandate, and regulations.

I assume he means a plan where companies may not rescind policies and they must accept everyone no matter what the pre-existing conditions they have.  No effective cost controls are put in place, subsidies exist, but cut out at a relatively low level 3* poverty level or less.  Without effective cost controls, costs will be expected to rise faster than inflation or wages.  Assume premiums of about 10K/year, with a deductible of about 5K.

Here’s the case, put as simply as possible.

Forcing people to pay money they don’t have for high deductible insurance they can’t afford to use is not moral.

Seriously, “grandma’s going to be killed by Obama’s healthcare plan” (whatever his plan is, even I don’t know) wouldn’t work on “we’re just going to give medicare to everyone”.

Just sayin’.

The whole “you can’t sell single payer” is turning out to be, well, rather questionable.  Because the way things are going it’s fairly clear you can’t sell some godawful hodgepodge either and all the screaming about “you’re going to take away my Medicare” indicates that a lot of the people who oppose Obamacare, love Medicare.

When you’re trying to explain something, you do so by metaphor in almost all cases.  Everyone knows what Medicare is.  The majority of people with Medicare are happy with it and even people without Medicare know people (usually their parents or grandparents) who have it, and whom it’s working for.

Ruling out “single payer” from the very start was an act of mind-bending incompetence on the level of disbanding Iraq’s army during the occupation of Iraq.  From a policy point of view “Medicare for all” provides massive savings, and we know it works because the equivalent policies have worked for every other nation in the world who ever implemented then.  From a sales point of view it’s much harder to demonize Medicare and much easier to explain it.  From a negotiation point of view pre-compromising is so stupid that anyone who has spent 5 minutes in a third world bazaar or taken even a single negotiating class knows better.

The current health reform “bills” are turning into a clusterfuck of epic proportions.  Scrap them, introduce Medicare for all, target  Senators who won’t vote for it with bone-crushing ads which ask why they want 22,000 American to die every year who could be saved for less money than the Iraq war cost; explain with nice simple pictures how much money they receive from the insurance industry and note that they are willing to let Americans die in exchange for blood money from the medical industry.

I know it’s difficult for Democrats to play hardball since they’d have to grow a spine, but perhaps, just perhaps, it’s worth it to save lives, end 70% of all bankruptcies and make sure people who are sick get the care they need?

(Oh, and to save Obama’s presidency. )