Browsing the blog archivesfor the day Friday, February 1st, 2013.


Edward Koch, 1924-2013

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American History

Arrived at Pearly Gates asking, “How’d I do?

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CNS Strikes Again

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Health Care

Conservative News Service has released a “news story” with the hysterical headline “IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family.” Let’s take a look.

In a final regulation issued Wednesday, the Internal Revenue Service (IRS) assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year.

I’ll come back to the word “assumed” in a minute. But if you read the article a little further, you find that the “cheapest” is not really the cheapest, but an average of the level of coverage required by the individual mandate in order to avoid a penalty.

And then if you read the IRS document, it becomes clear that the $20,000 is a round number being used to show how the penalty will be calculated. that’s where “assumed” comes in. The IRS isn’t saying that’s what it will cost.

But on top of that, the fact is that $20,000 for a family of four or five, which is what the article says is being “assumed,” is probably in the ball park of what a comprehensive private health insurance plan costs now. It’s a lot higher in New York, actually. I went to the Empire Blue Cross page to get a quote for private family health insurance for a family of five, with parents in their 40s and three school-age children, living in Westchester County. The monthly premium for an HMO plan is $4,754.66. Yes, the monthly premium. I took a screen shot of the result page (also note all the stuff the cheaper indemnity plan does not cover). The monthly premium for a point-of-service plan is $5,940.60. $20,000 per year is a bargain in comparison.

You can get way cheaper insurance plans in other states, of course, mostly because in those states insurance companies can still refuse to accept you if you have a pre-existing condition (which they can’t in New York, and they won’t be able to do after this year) and can also sell you coverage with big gaping holes that leave you with ruinous out-of-pocket costs (not allowed in New York, and not allowed anywhere else after this year).

So yeah, sweetums, that’s what real private health insurance costs in these parts. And if you don’t have insurance, and someone in your family needs major medical care, you could end up living in your station wagon. But then maybe you’ll qualify for Medicaid, in some states, so the taxpayers will pay the bills.

Single payer starting to look a little better now?

Update: American Thinker takes the CNS article at face value and posts an article called “Working poor families to be big losers under Obamacare.” Actually, working poor families will be somewhat better off than they are now. If they aren’t getting health insurance through their jobs, which many aren’t, there will be subsidies and other assistance made available to them, and the exchanges are supposed to offer plans at group plan rates they can buy into. And more of them will qualify for Medicaid, although several Republican governors are refusing to expand Medicaid, which will leave a few million people out.

American Thinker and other righties refuse to look at the stark reality of what life is like in America if you have no health care coverage at all. If you want to see losing, that’s losing.

Update: Reading comments at American Thinker and other rightie sites, it’s clear the righties are not making the distinction between private plans, group plans, and employee benefit plans. They think everybody is going to have to pay $20,000 a year for insurance, and are worked up into a frenzy about it. (Sigh)

Update: Kevin Drum

Apparently conservatives are outraged by this, but I have one question for them: just how much do you think healthcare coverage costs? Do you have any clue at all? …

… The average cost of healthcare coverage for a family is currently about $16,000, and by 2015 (the base year for the IRS examples) that will probably be around $18,000 or so. And that’s for employer-sponsored plans. Individual plans are generally steeper, so $20,000 isn’t a bad guess. It might be a little high, but not by much. And the family in question will, of course, be eligible for generous subsidies that bring this cost down substantially, thanks to the Affordable Care Act. They won’t actually pay $20,000 per year.

So is this outrageous? An example of Obamacare run amok? Hardly. It’s just an example of how damn much healthcare coverage costs in America and why we needed Obamacare in the first place. Apparently a lot of conservatives are shocked when they find this out

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