middle classed out?

Health care reform is one of the critical issues which the Obama Administration pledges to carry out. The goal: make health insurance affordable and accessible to all Americans.

If this article is any indication, however, the legislation might fall short – very short.

Among the incentives to enable all Americans to receive health care is a fine for those who don’t sign up. The fine’s severity is still under debate, but it’s not too reassuring (especially if there are fines for failing to sign up on time). I could see why President Obama and co. would include that stipulation in the legislation, but methinks it would cause significant problems.

There is a bright spot, however: the new plan would grant generous subsidies to families living at or below the poverty line ($22,000 for a family of four). This provision is critical, since research suggests that roughly 75% of those without health insurance are living in households making less than twice the poverty level.

Unfortunately, provisions for those making more than twice the poverty level (over $44,000) are not so bright.

Some alarming tidbits:

  • Federal subsidies for insurance premiums rapidly decrease as family income increases; a family of four making at least $90,000 would receive no subsidy.
  • The Congressional Budget Office estimates that health care spending could account for as much as 20% of income for some families by 2016.
  • Due to the extraordinary cost of the overhaul plan, the subsidies aren’t projected to kick in until the year 2013four years from now.
  • A compromise for reducing the overall cost of the plan eliminates the need to buy insurance for some Americans. However, this compromise could leave millions of Americans without health coverage.

So what does this mean? Admittedly, this is a draft of the health care overhaul package, but these elements present significant problems. That families making $44,000+ would have to pay somewhat out-of-pocket for insurance premiums certainly challenges the notion that the new plan is “more affordable.” While it’s a good idea to manage the cost of the health care overhaul bill, such shouldn’t come in the form of higher health care bills. Also, if the federal subsidies/tax credits don’t kick in until 2013, as the article suggests, then many families – including poor and middle class families – may still face hardship vis-à-vis health care.

And these are problems that health care reform should solve.

I certainly hope that the finalized reform package is affordable and accessible to all, but if it isn’t, then all the hoopla about health care reform would be much ado about nothing.

And that would be a travesty.

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