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  • Health Care: At What Price?

    Food or health care? For many of the poorest working families, that may no longer be an option should Senator Max Baucus’ health care bill become law. Through an individual mandate enforced by tax punishments, all adult Americans will be required either to purchase a health care plan or pay a fine. While only a nuisance for more affluent families, this has the potential to injure low-wage workers by decreasing real wages, increasing layoffs and reducing job opportunities. Should the poorest American workers be responsible to fund health care form?

    Baucus’ plan would require all Americans between 133% and 400% of the Federal Poverty Level to pay a sliding percentage of their income for health care, increasing as the worker earns more. For an individual earning $19,915 annually, they would be required to spend as much as $1,145 on health insurance premiums, the rest to be covered by their employer. Based on the Bureau of Labor Statistics Consumer Expenditure Survey, an individual in this salary range spends roughly $268 per month on food. That comes to over four months of food, spent instead on mandatory health insurance.

    Of course, this same individual could opt out of health insurance, but they would be responsible for a tax of $750 for a service that they do not receive. These numbers are mimicked even for a family of four at 300% of the Federal Poverty Level earning almost $70,000, which could be responsible for an $8,337 mandatory health plan. With BLS data, this sum could feed this family for almost a year, but should this family opt out they could be on the hook for a $3,800 fee to remain uninsured. Never before have Americans been obligated to pay so much for nothing.

    All of the numbers above were based on this individual keeping their job, but even this is not guaranteed. Firms would be required to pay the difference between their employee’s contribution and the actual cost of health care, and since employees from affluent backgrounds would foot more of their own bills, employers would be less inclined to higher those who need work the most. This low-income worker trying to support a family would not be able to compete against another job candidate already covered as a dependent on the policy of a higher-income parent or spouse. Moreover, money does not grow on trees, and firms must cut their newly acquired losses by either raising prices for their goods or lowering wages. Employees just above 133% of the Federal Poverty Level, the new cutoff for Medicaid, would likely see their wages cut to move them onto government programs, and in states with high minimum wages, this could drive firms to layoff or reduce hours to maintain profits. A provision that caps firms compensating for health insurance at $400 times the total number of workers would provide yet another incentive for firms to hire individuals and families able to pay their way, rather than those most in need.

    Health care reform is needed, but changes that would endanger the well-being of the poorest working class are not the correct way to fix the system. While a single-step fix may be attractive to politicians, problems with the health insurance industry are far too widespread, far too interwoven into the fabric of our economy; a one-time fix would be like slapping a band-aid on an amputated limb. What we should do is tailor our reform with systematic alterations to enhance the delivery system and lower costs. Health reform is absolutely necessary, but we should not require that those least capable finance the changes.

    Posted in Obamacare [slideshow_deploy]

    6 Responses to Health Care: At What Price?

    1. Brian Green, Redding says:

      I totally agree with the analysis that the health care bill in its current form would hurt the poor and create an undo burden on other people. This needs to be taken into account and changed.

    2. Pingback: Family Council » The Baucus Bill: A Bad Diagnosis

    3. Bobbie Jay says:

      Everybody should have to pay something for their own kind of health care. People have to make their own choices for their own lives.It's your life and your responsibility and freedom to choose the way you want or can. It WAS, anyway!

      I don't think people should be forced to buy insurance as insurance isn't health care, it's an expense.People surely can learn other ways to care for their young, sick or injured besides the emergency room, unless it's life or death. There are many resources that provide education in health and sickness.

      Many things can be done if ALL people were willed to be free!

    4. Shawn Pike, Red Bluf says:

      Great post. Thank you for putting out some numbers that can be checked. Now all anyone has to do to refute the Baucus bill is to find another country that has better numbers. Oh, unfortunately, there aren't any. So, the idea that a federal health care plan will *save* money and *stop* the recession is already turned on its head, with a proposed bill. As is usual with federal social programs, the reality has to cost even more (prove that this is incorrect with any example, just one). Thank you, David, for putting structure to the argument!

    5. Samuel Corbin says:

      I agree, it is unfair to the working class. The solution, however, is not to let those same working class people die because they can't afford health care. Realistically the solution is that more of the money should come from people with higher incomes, but naturally that doesn't sit too well with the people who are already against public health care.

      But the real question is what alternative are we being offered right now? Either we continue in the direction we are going and accept that it's fine for 44,789 (from Harvard, http://pnhp.org/excessdeaths/health-insurance-and… people to die each year because they don't have health care, or we accept that perhaps we take a less desirable bill. Frankly, I'm pretty sold on the idea that extra costs are okay when it means saving the lives of tens of thousands of people each year.

      In short, I would much rather have people struggling to make ends meet than dead.

    6. Tabitha, Nebraska says:

      This is very wrong…What can ordinary citizens do about opposing the bill?

      Very well written blog, I particularly enjoyed your analogy "like slapping a band-aid on an amputated limb."

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