Affordability in the Baucus Bill
Jon Cohn snagged a useful internal Finance Committee memo (pdf) outlining how Max Baucus's bill would affect families at different income levels. This table conveys the key information, and you can click through it for a larger version
Crucially, this is all counting health-care insurance that people don't really need to use. An average year, in other words, when no one gets cancer or is in a car accident. It's good to have insurance in those years -- preventive medicine is important, and seeing a doctor when you have strep throat matters -- but it's not really the point of health-care insurance.
The point of health-care insurance is to protect against the financial burden of catastrophe. So imagine a year of catastrophe. The plan includes out-of-pocket limits, but they're tied to the laws governing health savings accounts. For a family above 300 percent of poverty, that means a maximum out-of-pocket limit of $11,600. If that family made $78,000 a year, and paid $10,800 in premiums, that would mean 29 percent of their income would go towards medical costs.
That's better than the current system, when literally unlimited amounts of money can go toward medical costs. But "better" isn't the same as "affordable." Particularly if the costs are coming from an illness, like cancer, that will last more than one year (it would be nice if the out-of-pocket cap lowered after each year it was reached). The choices, in that scenario, are not that different from the choices today: bankruptcy, dropping insurance or forgoing needed care.
I don't want to underplay the fact that this plan really does make life better for people up to 300 percent of poverty, and even a bit better for people up to 400 percent of poverty. Being socked with a bill for $11,600 is better than facing one for $45,000, or $100,000. But it's worth comparing this with a national system like that in Canada or Britain or France, or even the national system that our own seniors enjoy: In those cases, an awful illness stands no chance of bankrupting a family or consuming 30 percent of its income.
The reforms under consideration make our system somewhat better. Maybe even a lot better. But they don't make it good enough.
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