• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Family Health Care: A Giant Game of Chance

    The House and Senate health care legislation resembles a game show more than deliberate exercise in public policy. As confusing and confused legislation language is translated into dollars and cents, how much Americans will find themselves paying for health care? It looks more and more like a giant game of chance.

    Not only is Congress leaving the current inequities created by the federal tax treatment of health insurance in place, it is busy creating new ones.

    Family Premiums. The Congressional Budget Office (CBO) estimates that under the House bill, the average premium in 2016 will be $15,000 and the average cost sharing will be $5,500 for a family policy or a total of $20,500. Under the Senate bill, the average premium will be $14,100 and the average cost sharing will be $5,000 for a family policy or a total of $19,100. Is the higher cost House plan better? How do we know? If the Senate can come in $1,400 lower than the House, could the price tag be lowered by another $1,400? If not, why not?

    Under the House bill, a family of four with income of $30,000 will receive the $20,500 value for just $1,100, or less than $100 per month. The family will receive premium and cost sharing subsidies from their neighbors worth $19,400. Under the Senate bill, a family of four with income of $30,000 will receive premium and cost sharing subsidies worth $16,800, still quite generous. These subsidies are so generous in fact, that the House and Senate leaders don’t want millions of Americans to have them to buy private health insurance.

    The Medicaid Solution. So, instead of providing these taxpayer subsidies, the House and Senate will put 15-20 million people into the Medicaid program where they are not eligible for the subsidies at all. It is “cheaper” for Congress to put people into Medicaid program, a welfare program, which pays doctors and hospitals at least 20-25 percent less than private health plans. Moreover, as the Chief Actuary of the Centers for Medicare and Medicaid Services warns, the cost will be lower under Medicaid because access to care will be more limited than under private coverage. Don’t expect the same level or quality of medical services.

    New Inequities. Millions of low-income Americans who are insured through their employers will not be eligible for these new subsidies either. What do we suppose will happen when they find out that their neighbors- who make more money than they do- are receiving these huge taxpayer subsidies courtesy of Congress while they are locked into an employer plan with no choices and higher cost sharing?

    For a family of four with income is above $78,000, the Senate bill, at least superficially, looks better. This family’s total premium and cost sharing will be $12,900 compared to $13,800 under the House bill. For a family of four with income of $90,100, the family’s costs under the Senate bill is $14,200 or $2,400 less than under the House bill.

    Mass Dependency. If the Senate manages to pass its 2074 page bill, the House and Senate leadership will somehow split the differences behind closed doors. If this massive legislation passes both Houses again and becomes law, health policy becomes a powerful new political tool for the congressional redistribution of health care. In a few years, more than half of all Americans will be receiving direct subsidies from government through Medicare, Medicaid, and the new subsidies. Politicians will be able to add disposal income to a family’s budget by increasing the subsidies. By making more Americans dependent on government, the congressional champions of this style of governance are betting that this legislation will keep them in power for many years to come.

    But they are also gambling on probability models to predict behavior. But, like all central planning schemes, people do not always behave the way the central planners expect. In fact, referring to the provisions of the House bill (H.R. 3962), the Chief Actuary of the Centers for Medicare and Medicaid Services (CMS) the patterns of behavior are “impossible to predict.” Costs will explode if CBO has underestimated the number of employers that will drop their private health coverage. If just one state figures out the windfalls that could be realized by dropping out of Medicaid, and saving itself billions by escaping the collateral federal mandates, others will surely follow. States Are already strapped with rising Medicaid costs, costs aggravated by the provisions of the House and Senate bills. A state-based Medicaid meltdown would shift more than a trillion dollars of cost to the federal taxpayers.

    The health care legislation headed for the Senate floor next week is not sound public policy. It is a giant game of chance. Millions of Americans stand to lose. A lot.

    Posted in Obamacare [slideshow_deploy]

    10 Responses to Family Health Care: A Giant Game of Chance

    1. AntonioSosa, Florida says:

      The health care legislation headed for the Senate floor next week is not sound public policy. It is a giant SCAM that would further destroy our health care, our economy, our freedoms and our country.

      The similarities between the Obamacare bills and the “URGENT,” “SAVE-THE-POOR” constitutions of Chavez, Ortega, Morales and the rest of the Marxist thugs are amazing.

      Venezuelans, Bolivians, Ecuadorians were manipulated, coerced and bribed into approving those constitutions, which have taken away people’s freedoms and rights, and multiplied poverty and despair.

      We pray our representatives have the courage and integrity to defend us from the criminal Obamacare scam, which seeks to impose socialism/Marxism on us.

    2. Dennis A. Social Cir says:


    3. Tim Az says:

      Antonio you are correct this is trickle up poverty.

      Anyone for a helping of hope and change?

    4. MrShorty, Arizona says:

      I need to hear more about the planned implementation schedule for these "great" plans. The latest I have heard is that the revenue side starts in 2010, but the costs don't start until 2013 or 2014. Does that mean that the 40 million uninsured people won't receive any benefits until 2013? If they have to wait 3 more years, why is it critical or urgent that we pass this bill today?

    5. Leon, Durango, CO says:

      I am a Sovereign Citizen, the closest thing to a King in America. I will manage my own risk, we used to call it Liberty. This crazy notion that Medical Care requires a disproportionate expansion of everybody's budget so despots can waste money and profiteer! I don't want crazy statistical diseases and wildly impractical treatments. The Demolition Plutocrats want Medicine to put Henry The Horse on a treadmill for cash! I am not fooled anymore than George Orwell. I don't think our doctors will like it as slaves any more than we do as patients.

    6. Linda Carlsbad, CA says:

      No, to Obama's health reform. We don't want his slavery!

    7. Neal R says:

      U.S. Population – Current estimate 307,966,393 est.

      Medicaid enrollees at 20% of population 61,593.279 est.

      (Increase 28,165,697 (84%)

      Medicare enrollees 12/31/08 44,831,390 est.

      Federal Govt. Employees 2,768,886 (12/08

      State Govt. Employees All 50 states 3,818,590 (12/08)

      Local Govt., City, County, Townships 4,733,830 (12/08)

      Total Govt. employees 11,321,306

      Fed.,State & Local Govt. Employee Dependents 11,321,306 Est

      Total medical insurance paid by all governments 129,067,281 est.

      (42% of population est.)

      The above value does not include subsidized insurance for low income people.

      Data source http://www.census.gov

    8. Illinois says:

      Why destroy a the best health plan in the world for Obama's plan? Yes, it does need to have some reformed but not 2000 pages. Please say no to the Health plan as now known in Congress and in Washington, D.C.

    9. Lynn B. DeSpain says:

      Pay the Government for what? For people who are not even in this Nation Legally to have Medical Coverage? For people who refuse to work and cover their own families, and buy new cars and tv's instead? To tax businesses so greatly that they can no longer afford to give their employees the benefit of Medical Coverage? To Tax employees on their medical coverage when they receive it as a benefit?

      The inmates truly are running the asylum.

    10. Pingback: It’s Dead, Jim, Part III « Around The Sphere

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.