A Welfare Program Masquerading as Health Reform

What do you call it when some people pay just 4 percent of their income for health insurance while others pay 20 percent and virtually everyone but the lowest quintile of wage earners will end up paying more than they do now?

You call it a welfare program masquerading as health care reform.

In a November 2, 2009 letter to Representative Rangel, the Congressional Budget Office calculates what estimated payments will be for the health insurance “reference plan” at various levels of income in 2016. The lavish plan that the bill defines as basic, combined with the massive web of subsidies and taxes, ensures that individuals who make more than $20,000 a year are going to be paying quite a bit more for health insurance than they do now.

Here’s what the CBO estimates that single people and families will be paying by income level:

try 2(b)

try 3(b)

Source: Congressional Budget Office. Letter to Representative Charles B. Rangel, November 2, 2009. http://www.cbo.gov/ftpdocs/106xx/doc10691/hr3962SubsidiesRangelLtr.pdf

Comments (10)

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  1. Ken says:

    Also, there is no rationale for this. That is there is no reson for a low-income family to pay a lower percent of income than a high-income family.

  2. Bart I. says:

    Not when the sliding scale ranges up to 400% of poverty level. And note that this doesn’t take the form of a fixed payment, less a low income subsidy. Instead the sliding scale is used to mask the fact that there is a subsidy at all.

  3. Stephen C. says:

    Remember Marty Felstein’s proposal which was described at this site a week or so ago. The idea was that everyone should pay no more than a percent of income for health insurance. I think it was 13%.

    This would involve radical redistribution, but the end result at least made some sense. The maximum sacrifice would be the same (as a percent of income) across all income groups.

  4. Devon Herrick says:

    Welfare programs should be for the truly need rather than subsidize everyone with income at median or lower. Currently, half of all workers do not pay federal income tax. Under current proposals, most of them would also qualify for government-subsidized health coverage (or subsidized coverage their employers are forced to provide).

  5. Bruce says:

    None dare call it “socialism.”

  6. Larry Casey says:

    Automobile drivers are required by law to possess a driver’s licence and car insurance. A certain segment of society continually refuses to abide by these laws. This is the exact same segment of society that will be required to purchase medical insurance, and if they don’t, the criminal justice system will impose monetary fines and/or put them in jail. Just HOW damn stupid does the democratic congress think we citizens are?

    Larry Casey
    Forest Glen, Chicago

  7. Greg Sullivan says:

    Hope it’s ok to add my 2 cents to this discussion. I did a big study of the House health care bill the last few weeks and wrote an essay on it. Here’s a summary of the piece. I hope it helps in some way.

    I’m very sad today, and frustrated, and a bit confused. With the recent passage of the House Health Care Reform Bill, I’m left wondering where the America I love is heading and what has happened to freedom. It seems as though we have entered an alternate land in some strange Twilight Zone episode—a land wholly different from the one that has helped shape the course of this world for over two centuries. In my recent reading of portions of the House Bill and a summary of the Senate’s Baucus Bill, I’ve seen enough to nearly make me ill.

    Yes, it is a concern that millions of Americans don’t have health care coverage, but who came up with the concept that the government should take care of our needs to this extent? It amazes and frustrates me to no end that millions are willing to deny so many fundamental truths, basic financial principles, and freedom itself, all for the convenience of simply letting the government take care of it. The words of Barry Goldwater ring so true in this debate: “The government that is big enough to give you all you want is big enough to take it all away.”

    With the new House bill requiring individuals to obtain health insurance or pay a fine (tax) to the government, I don’t understand why there aren’t chills running down the spine of every American who loves freedom. The gall and arrogance of this president and Congress who think they have the right to govern our lives that deeply. America, please see the road this reform bill is paving—a road that leads to a slow erosion of freedom and a gradual takeover of more and more of our private lives.
    Consider these words from William Boetcker (sometimes attributed to Abraham Lincoln), spoken back in 1942: “You cannot help people permanently by doing for them what they could and should do for themselves.”

    Please visit http://www.just2simpleguys.com for a more detailed analysis of the health care reform bill.

  8. Joe S. says:

    Good post, Greg.

    I agree with what others have said here. This is not a plan to make health insurance “affordable.” It is a plan to redistribute income.

  9. Alicia Jones says:

    Two fundamental components are missing from the healthcare dialogue:
    First, access to healthcare services is NOT synonymous with health insurance coverage. Primary care is accessible and affordable at most income brackets. In contrast, urgent, catastrophic, and long-term chronic disease management are costly, and therefore should be covered by insurance. Can anyone imagine filing an (auto) insurance claim for a flat tire, car wash, or oil change? Seems crazy, but that’s what you do when you file an insurance claim for a flu shot, UTI, or annual pap smear. A high deductable health insurance plan combined with tax-free HSA account is the perfect balance between risk, cost, and efficiency.

    Second, no healthcare plan will be affordable (no matter who’s footing the bill) unless personal responsibility plays a major role in determining the cost of a premium. Life style choices such as obesity, smoking, excessive alcohol consumption, and reckless driving contribute enormously to healthcare costs. There should be strong financial incentive not to engage in such activity. Remember how people started using their bikes and public transportation when gasoline prices spiked to over $4/gal? Remember how people switched from drinking Pepsi to tap water during the recession? You’ll see the same behavior changes if the proper incentives are built into healthcare legislation.

    Thanks for your consideration,
    Alicia Jones, Ph.D.
    Eureka Springs, Arkansas

  10. John J says:

    No work, No vote. If you haven’t worked in previous six months to vote, you should not be allowed to vote. Exceptions are retirees, veterans, other legitimate disabled.