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Comparing the House and Senate subsidies

Some plucky staffers in Rep. Jim Cooper's office (D-Tenn.) have been spending a few long nights huddled before Microsoft Excel, but the result is an uncommonly clear look at the way the House and Senate finance bills help the working class.

To understand the graphs, remember that they're measuring two things. The bottom half tracks premiums. The top half tracks maximum out-of-pocket costs. You'll notice that the House has a steady out-of-pocket maximum, while the Senate's changes alongside income. You'll also notice that the House is moderating costs primarily through subsidies, while the Senate is relying on regulations that limit the out-of-pocket maximum in insurance plans. The House's approach costs taxpayers more, but the Senate's approach probably costs individuals more, as insurers will pass those costs along.

One last note: These charts go further than most in looking at both premiums and out-of-pocket costs, but they don't account for the differing levels of generosity in the two benefit packages. As I understand it, the numbers for the House are based on the expected average of the three lowest-cost plans, while the numbers for the Senate are based on the "silver" plan.

housesubsidies.png

financesubsidies.png

Update: I'm informed that credit should go to James Leuschen, Cooper's legislative director. Nice work, James!

By Ezra Klein  |  October 27, 2009; 4:59 PM ET
Categories:  Charts and Graphs , Health Reform  
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Comments

It would be nice is both graphs started at 100% of FPL and used the same benefit plan(s) for comparison so we could really see apples to apples. Tell the plucky staffers to get on that :-)

Posted by: scott1959 | October 27, 2009 5:40 PM | Report abuse

With Blue Dogs like Jim Cooper who needs Republicans? What these charts do their best to obscure is that the House Bill's subsidies are 2.5x more generous at 133%FPL and 20% more generous at 300%FPL. Plus the Finance bill resets subsidies to a percentage of premium after the first year, so the whole thing goes out the window.

Th reality is none of these proposals is properly indexed to medical inflation, most people will qualify for an affordabilit exemption, and medical bankruptcy isn't going away anytime soon.

Posted by: bmull | October 27, 2009 5:47 PM | Report abuse

Since the Senate has a lower cap on max out of pocket for lower income families, won't the premiums cost more? The charts makes it look like the reduction in max out of pocket is achieved at no cost to either the individual or the government. Hard to see how that works.

Posted by: kjacobs9 | October 27, 2009 5:49 PM | Report abuse

Where does this generous benefactor "government" get the money to pay for things?

Posted by: kingstu01 | October 27, 2009 5:54 PM | Report abuse

kingstu01--the funding sources have been debated thoroughly...changes to Medicare Advantage funding, Medicare savings (MedPac, etc), cadillac plan tax, insurance industry excise taxes.

Posted by: scott1959 | October 27, 2009 8:46 PM | Report abuse

What is the "federal poverty level" currently? I think that information would greatly help understanding what people will be paying.

Posted by: spotatl | October 28, 2009 9:07 AM | Report abuse

To answer my own question. The FPL for an individual this year is $10,830, The FPL for a family of 4 would be $22,050.

http://aspe.hhs.gov/poverty/09poverty.shtml

Posted by: spotatl | October 28, 2009 9:09 AM | Report abuse

Since the Senate has a lower cap on max out of pocket for lower income families, won't the premiums cost more? The charts makes it look like the reduction in max out of pocket is achieved at no cost to either the individual or the government. Hard to see how that works.

Posted by: kjacobs9 | October 27, 2009 5:49 PM | Report abuse


i love the assumption that the maximum out of pocket in these plans is a TRUE maximum out of pocket. It's not. When that hard reality hits home and the only end to medical bankruptcy is ended due to an end to pre-ex then Democrats will be blasted by their base for promising something to them that they won't ever get.

Posted by: visionbrkr | October 28, 2009 9:35 AM | Report abuse

Is there a similar chart showing the implicit marginal tax of scaling back subsidies? It looks fairly high. The $15,000 in subsidies at 100% of the FPL in the senate bill looks like it falls to $7,000 or so at 200% of the FPL. If we're talking about income going from $22,000 to $44,000, then that's about a 35% marginal tax rate, on top of all other taxes and benefit phase outs.

I really wish the health bill would have looked something more like this:

http://www.brookings.edu/papers/2007/~/media/Files/rc/papers/2007/07useconomics_emanuel/200707emanuel_fuchs.pdf

Posted by: justin84 | October 28, 2009 9:37 AM | Report abuse

Both charts show the total premium cost at 400% of poverty at or above $20,000 a year.

Are these "Cadillac Plans"?

Posted by: cautious | October 29, 2009 3:10 AM | Report abuse

The comments to this entry are closed.

 
 
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