CATO's Michael Tanner on the Senate healthcare plan

[unixronin]

Back when he was running for president, Barack Obama promised that health-care reform would save the average family $2,500 per year.  That promise has long since been abandoned, but one might still expect that health-care reform won't leave the average American worse off.

Increasingly, it looks like that won't be the case.  On Monday the Congressional Budget Office released a new report showing the Senate health bill would actually increase premiums by 10–13 percent for the millions of Americans who buy their insurance on their own.  Those increases are over and above the increases that would occur if we did nothing.  Today, an average insurance policy can cost about $2,985 for an individual or $6,328 for a family.  Without reform, that cost is expected to rise to $5,500 for an individual or $13,100 for a family by 2016.  But under the Senate bill, those premiums will increase to $5,800 for an individual worker and $15,200 for a family plan.  In other words, the Senate bill would cost a typical family an extra $2,100.

And that doesn't even include tax increases, or take into account that the Senate plan's mandatory minimum plan requirements would force people who have plans now that they're happy with but which don't meet government minimums (for instance, if the mandatory minimums include coverages they don't need or don't want) to upgrade to "approved" plans, or face fines that could hit $6750 for a family of four, which puts the offense into felony range, with various future impacts on their civil rights and employment.  (There would also be tax penalties for having insurance that covers too much.  They'll get you one way or the other.  It's almost inevitable that Congress itself, with its choice of no less than six different no-cost luxury medical plans, will — doubtless through the agency of some well-hidden small print — turn out to be exempt from this "Cadillac plan tax".)  The CBO also predicts that the bill will increase the cost of employers hiring workers, and that this will disproportionately inpact the low-wage and unskilled workers who are exactly those most likely to be unable to afford healthcare coverage now.

In military campaigns, this gets called "collateral damage", but as we know, that nice, clean, antiseptic euphemism turns out at street level to look like innocent civilians dead and maimed for being in the wrong place at the wrong time.  The military tries as best it can to minimize collateral damage.  Congress just pretends there won't be any, then when it turns up after all, looks for someone else to blame it on.

And as if that wasn't enough, "savings" projected for the bill rely on the willingness of future Congresses — not, naturally, this one — to make "huge cuts" in Medicare spending.  We all know that in the real world, that will be all but politically impossible.

Barack Obama keeps telling is that "we can't afford to do nothing".  But in reality, however bad doing nothing may be, it is becoming clearer and clearer that the current "healthcare reform" plans will be both worse than doing nothing, and worse than what we have now.  You can't fix a broken system by adding more of what's wrong with it in the first place.

Comments

[lebo-superman.livejournal.com]

True enough on the tax liability, but it's my experience (I used to do taxes for Jackson-Hewitt) that most people prefer to pay the tax and get a refund (as opposed to trying to estimate withholding so they maximize their weekly spending money). That's how they avoid owing at the end of the year.

Also, the people who get refunds do not generally use that money for food or shelter. They use it for cars, computers, & big screen TV's. I can't count the number of people who've sat across the desk from me when I did their return, and said they were heading to Wal-Mart as soon as they got their check. Not smart, but true; and our economy is partially built on it.

I'm mostly talking about the proposal. I know they have suggested there will be vouchers for low-income families, but I've yet to see any actual numbers on who would qualify for the voucher, or how much it would be. Without numbers, I choose not to count it.

[skellington.livejournal.com]

The link from Krugman (above) shows the subsidized premium being $2000 on the private insurance plans for a family of 4 making $38.6K. He's got the subsidies for other income levels as well on that chart.

IIRC, the Senate proposal doesn't subsidize the poor as much as the House version.

I assume that both versions require substantial contributions by the employers if not 100% coverage, but I can't find specifics. (The employers wouldn't be complaining about it if they didn't have to provide subsidies.)

[skellington.livejournal.com]

And my point still stands that we're really talking about an income of $32K-$35K after taxes.

(And I don't think most people making $40K / year wrangle themselves a $10K income tax return. Especially if they can follow the instructions on the withholding form at all...)