But even after Max Baucus (D-Mont.) spoke optimistically of gaining bipartisan backing, lawmakers continued to haggle over a question at the heart of the debate: How can the government force people to buy insurance without imposing a huge new financial burden on millions of middle-class Americans? . . . .
Under the Baucus plan, described in a “framework” he released last week, as many as 4 million of the 46 million people who are currently uninsured would be required to buy coverage on their own, without government help, by some estimates. Millions more would qualify for federal tax credits, but could still end up paying as much as 13 percent of their income for insurance premiums — far more than most Americans now pay for coverage.
People further down the income scale would receive much bigger tax credits, effectively limiting their premiums at 3 percent of their earnings. But experts on affordability say even those families could find it difficult to meet the new mandate without straining their wallets.
“We’re talking about the equivalent of a middle-class tax increase,” said Michael D. Tanner, a health-care expert at the libertarian Cato Institute. “Yes, they’re paying it to an insurance company instead of to the government. But, suddenly, these people are paying more money to somebody.” . . .
Under the Baucus plan, subsidies would be offered to people who earn up to 400 percent of the poverty level ($43,000 for an individual or $88,000 for a family of four) in the form of tax credits that would be paid directly to the insurance company of the person’s choice. The credit would be calibrated on a sliding scale to ensure that people at the bottom of the income range paid no more than 3 percent of their earnings for premiums while those at the top would be liable for as much as 13 percent.
That would amount to more than $700 a month for a family of four making $66,000 a year — significantly more than most people at the same income level now pay, according to research conducted by Linda Blumberg, a senior fellow in the Health Policy Center at the Urban Institute. Families earning less than 300 percent of the poverty level also would be eligible for assistance with deductibles and other out-of-pocket expenses, but families who earn more would be on their own.
Again, if your income is low, you will get a subsidy to help pay for it, but still it’s going to mean a big hit on the household budget. The theory is to help pay for older people’s medical expenses by bringing in all these young and healthy folks who don’t have that many medical bills and who don’t currently have insurance. But is that fair? And are those who are going to be forced to pay insurance premiums which may be close to what they are currently paying for rent willing to go along with this scheme? Do any of you fall into this category? How are you going to swing paying that premium?
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