Subsidies Under the Baucus Plan & Subsidy Calculator Link
From the hearings this past Tuesday . . .During the hearing held on Tuesday Sen. Rockefeller received confirmation from the CBO that it is estimated that under the Baucus plan the subsidies earmarked to the lower income brackets purchasing insurance from the Exchange of private companies and who are not covered by an employee plan will cost in the neighborhood of $463 billion over the next 10 years, not taking into account Medicaid for those at or below the 133% of poverty level, nor SCHIPS. (See: CSPAN @ 15m45s)
And here is the latest update on the financing costs under the Baucus Plan:
CBO estimates the cost of the coverage components of the plan to be $774 billion over ten years. These costs are financed through a combination of savings from Medicare and Medicaid and new taxes and fees. The primary sources of Medicare and Medicaid savings include incorporating productivity improvements into Medicare market basket updates, reducing payments to Medicare Advantage plans, creating the Medicare Commission charged with finding savings in the program, changing the Medicaid drug rebate provisions, and cutting Medicaid and Medicare DSH payments. (See descriptions of cost savings provisions in Cost containment.) The largest source of new revenue will come from an excise tax on high cost insurance--insurance plans that exceed $8,000 for single coverage and $21,000 for family coverage--which CBO estimates will raise $215 billion over ten years. The threshold values for high cost plans are indexed to the CPI-U, which typically increases at a lower rate than health insurance premiums, so it is expected that this tax will raise more money over time. CBO estimates the proposal will reduce the deficit by $49 billion over ten years.
The modified Chairman's Mark of the America's Healthy Future Act of 2009, released on September 22, 2009, will use $28 billion of the existing $49 billion surplus to offset the costs of the changes.
www.finance.senate.gov/sitepages/baucus.htm
Now here's how the Baucus Plan breaks down for a family of four.
Note: Subsidies are only available for people purchasing coverage on their own in the Exchange (not through an employer). All individuals and families with incomes at or below 133% of the federal poverty level will be eligible for Medicaid. Others with higher incomes may also be eligible, depending on rules that vary by state.
In a Medium Cost Area:
At 133% of Poverty or $29,327
A family of 4 with the head of household 35 years old.
Medicaid would cover this family.
Then . . . Up to 200% of Poverty level
In a Medium Cost Area
At 200% of Poverty or $44,100
A family of 4 with the head of household @ 35 years old.
Actual annual plan premium: $8,636
(age factor = 0.92 )
Cap on premium as % of income: 7.0%
Person/family premium payment: $3,087
% of total premium paid by person/family: 36%
Person/family payment as % of income: 7.0%
Government subsidy: $5,549
Could the person/family pay less for a less comprehenisve plan? No
Next ... 300% of poverty.
In a Medium Cost Area
At 300% of Poverty or $66,150
A family of 4 with the head of household @ 35 years old.
Actual annual plan premium: $8,636
(age factor = 0.92 )
Cap on premium as % of income: 12.0%
Person/family premium payment: $7,938
% of total premium paid by person/family: 92%
Person/family payment as % of income: 12.0%
Government subsidy: $698
Could the person/family pay less for a less comprehenisve plan? Yes
Premium for the lower cost plan: $7,834
Premium as % of family income: 11.8%
Next ... 400% of Poverty
In a Medium Cost Area
At 400% of Poverty or $88,200
A family of 4 with the head of household @ 35 years old.
Actual annual plan premium: $8,636
(age factor = 0.92 )
Cap on premium as % of income: 12.0%
Person/family premium payment: $8,938
% of total premium paid by person/family: 100%
Person/family payment as % of income: 12.0%
Government subsidy: $0
Could the person/family pay less for a less comprehensive plan? Yes
Premium for the lower cost plan: $7,834
Premium as % of family income: 8.9%
NOW HERE'S THE KICKER: Those subsidies paid to offset the overall cost to you the consumer are going to be in part PAID FOR AND TAKEN FROM TAXING HIGHER INSURANCE PLANS and then paid back to the insurance industry through the subsides. So not only are you going to be putting your money into the pockets of the industry but the subsidies also go back into the pockets of the industries.
I'm NOT surprised . . . Are you?
And if you have the time, look what else Baucus' mark-up also holds:
Baucus health bill would let private group write rules | LA Times September 28, 2009
The National Assn. of Insurance Commissioners (NAIC)currently writes model laws and regulations that individual states are free to accept or discard. Under the bill by Sen. Max Baucus (D-Mont.), it would craft a model rule governing "health insurance rating, issuance and marketing requirements" that would become "the new federal minimum standard without any further congressional action." States would be permitted to deviate from the standards only by appealing to the Department of Health and Human Services.
In effect, the bill would allow the group to write many of the new rules on issuing and marketing insurance to millions of uninsured Americans who would be required to purchase policies.
Same as ever... Letting the weasels into the hen house to check over the eggs.
Now ... If you wish to run your personal data into the calculator you can find it here:
Health Reform Subsidy Calculator ... kff.org
Have fun . . .
~OGD~
