This is an important read that further illustrates my point mathematically as to why we must still support this sub-optimal bill. Nate Silver is a great numbers guy that is rarely wrong. We can bill towards what we ultimately want but by God let’s not blow a foundation.
Pick your subheadline:
a) It’s time to stop being polite and start getting real.
b) Here’s hoping a picture is worth 1,000 words.Any questions?
OK, I imagine that there will be a few. Here’s how I came up with these numbers.Senate Bill. These estimates are straightforward — they’re taken directly from the CBO’s report on premiums for people at different income levels. A family of four earning an income of $54,000 would pay $4,000 in premiums, and could expect to incur another $5,000 in out-of-pocket costs. The $4,000 premium represents a substantial discount, because the government is covering 72 percent of the premium — meaning that the gross cost of the premium is $14,286, some $10,286 of which the government pays.
One caution: this reflects the situation before the public option was removed from the bill. But, provided that the subsidy schedule isn’t changed as well, that shouldn’t change these numbers much.
Status Quo. In 2009, the average premium for a family in the individual market was $6,328, according to the insurance lobbying group AHIP. However, this figure paints an optimistic picture for two reasons. Firstly, the average family size in the AHIP dataset is 3.03 people; for a family of four, that number would scale upward to $7,925, by my calculations. Secondly, the CBO’s estimates are based on 2016 figures, not 2009, so to make an apples-to-apples comparison, we have to account for inflation. According to Kaiser, the average cost of health coverage has increased by about 8.7 percent annually over the past decade, and by 8.8 percent for family coverage. Let’s scale that down slightly, assuming 7.5 annual inflation in premiums from 2009 through 2016 inclusive. That would bring the cost of the family’s premium up by a nominal 66 percent, to $13,149. And remember: these are based on estimates of premiums provided by the insurance lobby. I have no particular reason to think that they’re biased, but if they are, it’s probably on the low side.Not only, however, would this family paying a lot more under the status quo, but they’d be doing so for inferior insurance. According to the CBO, the amount of coverage in the individual market would improve by between 27 and 30 percent under the Senate’s bill. Taking the midpoint of those numbers (28.5 percent), we can infer that there would be about $1,427 in additional cost sharing to this family in the status quo as compared with the Senate bill; this would bring their cost sharing to $6,427 total.
Add the $6,247 to the $13,149 and you get an annual cost of $19,576 — for a family earning $54,000! Obviously, very few such families are going to be able to afford that unless they have a lot of money in the bank. So, some of these families will go without insurance, or they’ll by really crappy insurance, or they’ll pay the premiums but skimp on out-of-pocket costs, which will negatively impact their fiscal and physical health. But if this family were to want to obtain equivalent coverage to that which would be available to them for $9,000 in the Senate bill, it would cost them between $19,000 and $20,000, according to my estimates.
Status Quo with SCHIP. Fortunately, some families in this predicament do receive some relief via the SCHIP program. SCHIP eligibility varies from state to state; a family earning income at 225 percent of the poverty line, as this family does, is eligible for SCHIP in about half of the country.
Premiums are fairly cheap under SCHIP — for a family at 225 percent of poverty, generally on the order of about $60 per month to cover two children. We’ll assume that this will inflate slightly to $75 per month, or $900 per year, by 2016.
The two adults in the household will still have to buy insurance in the individual market, which will cost $7,684 by 2016. That makes the family’s total premium $8,584.
For the adults, we assume that the cost sharing component runs proportional to premiums, and totals $3,756. For the children, this calculation is a little bit more ambiguous. Out-of-pocket costs under SCHIP are capped at 5 percent of family income, which would be $2,700 for this family. But that’s a cap and not an average — we’ll assume that the average is half of the cap, or $1,350. Total cost-sharing, therefore, is $5,106 between the adults and the children.
This means that premiums plus out of pocket costs will equal $13,690 for this family. I estimate the subsidy by subtracting this figure from the cost of unsubsidized insurance in the individual market; the difference is $5,885.
[CONTINUE]
FiveThirtyEight: Politics Done Right: Why Progressives Are Batshit Crazy to Oppose the Senate Bill