With all the outrage over mandated coverage and the fines that will be imposed for non-compliance, there has been little discussion as to what that coverage might actually cost and what kind of fines would be imposed. Someone may have a better fix on this than me, but a quick search led me to an article in the Wall Street Journal on Sept. 16th, 2009 that used Massachusetts as a template for what we can expect. I was unpleasantly surprised to find that the mandate premiums there are actually higher than those for equivalent coverage that you would pay a private insurer like Kaiser Permanente in California, for example.
The article illustrates the costs and subsidies through examples of everyday folks we can easily relate to, that is if you don’t have a hefty trust fund or a cushy corporate gig (do those still exist?).
Ron Norton is an adjunct professor at a community college and makes $40,000 a year. But as all academics know, adjuncts don’t get health benefits. His wife earns somewhere between $20-30,000 a year and gets coverage through her job, but not for her husband or daughter. Now I’m sure that if you’re currently out of work, $60-70,000 a year of household income sounds pretty nice. Even with their combined income, however, the Nortons struggle to make ends meet and are not eligible for subsidies. The most affordable policy that Mr. Norton and his 16-year-old daughter qualify for is $464 dollars a month or $5568 a year, with a $2,000 yearly deductible, something they can’t afford.
"It's insurance you can't possibly use," he says, referring to the thousands of dollars he'd pay in premiums and deductibles before the coverage would kick in.
Because he can’t afford it, he has to eat the $1,000 a year fine imposed by the state.
As of the date of this article, the Senate Finance committee had been considering limiting subsides to those earning up to $32,500 or $66,000 for a family of four. The penalties would have ranged from $750-$1,500 a year for people under the cut-off and up to $3,800 for families above. Now that the public option has been dropped, the cutoff has been lowered and penalties increased dramatically. I apologize for not being able to find a quote on the exact figures, as this apparently hasn’t been finalized. If you have insider knowledge, please fire away. In Massachusetts, there is no catastrophic coverage, according to the WSJ, and we should not expect it under the federal program because that would undercut the intent of using mandates to contain costs.
What is clear is that this will be another major kick in the crotch to the middle class, or what’s left of it. Jane Hamsher has pointed out that this shapes up as the single issue that both progressives and teabaggers can agree on and express their outrage about come 2010 and 2012. This is not to say that there aren’t positive elements in the Senate package, but that on the bread-and-butter issue, i.e. "what’s this shit gonna cost me?", it’s going to bring the house down on the heads of Democrats.