House Bill Creates Unaffordable Health Insurance for Upper Middle Class
Health Insurance will be 19% of income for those earning $88,000
By Don McCann
Quote of the Day
Health insurance and health care are no longer affordable for average-income individuals. Any reform proposal that would make health care affordable for everyone must include a transfer from the wealthy to average- and low-income individuals.
The authors of the House tri-committee reform bill explicitly acknowledge this fundamental principle by including a policy for a surtax on high income individuals to help finance the subsidies that will be required to assist individuals of more modest incomes with the mandated purchase of health plans. Has this taken care of the affordability issue?
Let's go through the numbers again. Average health care costs for a family of four with an employer-sponsored PPO are now $16,771. That is the average cost for a relatively healthy sector of society. Many with greater needs pay more than that. That is the average health care spending under the best of conditions in our current multi-payer system, and it doesn't even include insurer administrative costs.
Under this legislation, no subsidies are provided for individuals or families over 400 percent of the federal poverty level. For a family of four, that threshold is an income of $88,200. Thus average costs would be 19 percent of family income, and more for those with greater needs. By no stretch could that be considered affordable.
It's great that the concept of income transfer has been accepted by the policymakers in Congress, but they need to go back to the drawing board to craft a plan that would actually work. (Hint: Provide all necessary services for everyone, and pay for those services through a single universal risk pool that is funded equitably using progressive tax policies.)
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