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Middle Class Pays More Under Baucus

Posted By David Green On October 9, 2009 @ 10:04 am In Obamacare | Comments Disabled

The Congressional Budget Office issued a report [1] today giving the Baucus health care bill the stamp of deficit-reduction approval, but this was earned only through steep increases in indirect taxes, such as the coverage mandate. The coverage mandate included in Senator Baucus’ health care plan [2] has significant and disturbing implications for middle-class Americans. Individuals earning up to $45,520 and families earning up to $92,640 would need to cut corners to make ends meet, all in response to the indirect tax implicit in a health care mandate.

For individuals making $34,140 or three times the Federal Poverty Level [3], the Baucus health care proposal could mandate up to $4,097 [4] in annual premiums, a sum which could have been spent on over nine months of food, almost four months of housing or well over a year of utilities [5]. For a family of four making $69,480 or 300% of poverty, a mandated annual premium of $8,338 would be worth the equivalent of over ten months of food, four months of housing or almost two years of utilities [6]. Is this change to the health care system actual “reform”, or something else?

These numbers become even more staggering for insurance purchasers at the upper threshold of the price cap. Individuals earning $45,520, four times the Federal Poverty Level, would be required to pay $5,462 [4]for their health insurance, when they could have used this same money on over a year of food, four months of rent or a year and a half of utilities [5]. A family earning $92,640, 400% of poverty, would be on the hook for $11,117 [4], the equivalent of over a year of food, five months of housing or two years of utilities [6]. This is quite a burden to place on middle-class Americans.

These mandates are the effective equivalent of taxes on the middle class, because those required to purchase and spend large sums of their income on health insurance would be subsidizing the system. Mandates are the means to levy these taxes, but in the end load the same burden upon the shoulders of the average Americans as a tax hike would. Sadly, mandates are not the only way in which Baucus’ proposal will increase the burden on Americans.

To fund the massive expansion of subsidies, this plan would impose an “Annual Fee on Manufacturers and Importers of Medical Devices”, increasing the price of everything from “wheelchairs and walkers to pacemakers, hearing aids, and MRI scanners”. [7]In his campaign rhetoric, then candidate Obama ensured the American people that he would not raise taxes on anyone earning less than $250,000 [8]per year. In this economic climate, it is essential that he adheres to that promise, not by circumventing the specific word “tax” but by avoiding anything that would increase the financial burden on average Americans. Real change is needed, but mandates and taxes are not the way to achieve this change.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/10/09/middle-class-pays-more-under-baucus/

URLs in this post:

[1] report: http://www.cbo.gov/ftpdocs/106xx/doc10642/10-7-Baucus_letter.pdf

[2] Senator Baucus’ health care plan: http://finance.senate.gov/sitepages/leg/LEG%202009/100209_Americas_Healthy_Future_Act_AMENDED.pdf

[3] Federal Poverty Level: http://aspe.hhs.gov/poverty/09poverty.shtml

[4] $4,097: http://www.heritage.org/Research/HealthCare/upload/wm2628_table1.pdf

[5] over nine months of food, almost four months of housing or well over a year of utilities: http://www.bls.gov/cex/2008/Standard/income.pdf

[6] over ten months of food, four months of housing or almost two years of utilities: http://www.bls.gov/cex/2008/Standard/cucomp.pdf

[7] “wheelchairs and walkers to pacemakers, hearing aids, and MRI scanners”. : http://www.heritage.org/Research/HealthCare/bg2325.cfm

[8] $250,000 : http://www.politico.com/news/stories/0909/27384.html

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