The Nuts and Bolts of Health Care Subsidies and Federal Poverty Levels

[laughingliberal]

So, we know the Health Care Reform bills contain provisions for subsidies for those who they determine need help purchasing their mandated private insurance. At this point the most generous subsidy is for those making 400% of the federal poverty level. Current proposals for expansion of Medicaid eligibility are 133% or 150% of FPL. Here is a chart and a breakdown of what that means in terms of real people and their real money:

Those who earn up to 400% of the poverty level will get subsidies to offset premiums costs so they do not exceed 10-12% of their income (not nailed down, as yet). Everyone else at the mercy of the private insurance thieves. The premium for my husband and myself was $1200 per month until that became beyond us and we dropped it.

Here's the chart for poverty guidelines:

The 2009 Poverty Guidelines for the
48 Contiguous States and the District of Columbia
Persons in family Poverty guideline
1 $10,830
2 14,570
3 18,310
4 22,050
5 25,790
6 29,530
7 33,270
8 37,010
For families with more than 8 persons, add $3,740 for each additional person.

http://aspe.hhs.gov/poverty/09poverty.shtml

So, for a couple that means they will receive no help if they have income of over $58,280. That breaks down to $4,856 per month. A $1200 dollar per month premium is 25% of their monthly income. Most people consider that a mortgage payment. And it is, generally, thought your mortgage should be the biggest monthly expense. Know many people at this income level who could afford to be paying for a 2nd home? People with that sort of income would not, likely, qualify for a mortgage of that amount. We made a lot more than that when we applied for our home loan and the payment on our mortgage was right about that amount and it was almost the maximum amount we were eligible to borrow. And we had great credit scores. So, if a reputable lender would not lend someone enough to incur a mortgage of this amount, why does the government think we can afford the premiums for private health insurance? Problem here is the federal poverty levels are, artificially, low.

The figures are there for other family sizes so you may calculate those at will.

[Matariki]

1. K&R

This really spells it out in real terms.

Those subsidies aren't going to be very useful for most people.

It's useful to mention also that %400 is the high end of what they are talking about. My Senator was saying %200 of the poverty level. Meaning that a couple making over $28,000 will be forced to pay nearly half their income for health insurance.

Congress needs to quit fucking around and give us something meaningful - like Medicare for everyone.

[laughingliberal]

2. Wow! 200% would really be draconian

I know, at one point, Baucus' bill had it at 300%. House bill is holding at 400%. No way to know where it will actually get nailed down but I do know 400% of fpl is the most generous of any proposal that made it into a final bill, so far.

I do think a lot of legislators intentionally obscure these numbers. And not just about this. Notice how they always talk about a "family of 4." I believe that's because the income for a family of 4 sounds a little better than singles and couples. Just a suspicion I have.

[laughingliberal]

3. No discussion? So, are we all good with this? Can I quit hammering my Senators and Reps daily about

the devastating effect this will have on the working class?

[Matariki]

18. You need a provocative subject line apparently

something increasingly disappointing around here.

[Waiting For Everyman]

4. K&R Where are the reality cheerleaders, the pragmatists, etc.?

Thanks for the numbers. Congress doesn't bother with whether law is doable anymore.

This should kill off any possible recovery for people. Nice.

Genius at work.

[laughingliberal]

5. I think a lot of people who want to support the President and the party just hope this

isn't true and it will, somehow, not be this. I understand. I hope so, too. Been closing my eyes and wishing real hard, clicking my heels together and clapping for Tinkerbell since the details began emerging in July. To no avail. I boot up, check the bills and it's still a middle class disaster and working class annihilator.

[Lydia Leftcoast]

6. I think there will be a lot of civil disobedience if this goes through

especially if the private insurances decide to price gouge. (Naw, they wouldn't do that, would they? :sarcasm: )

[laughingliberal]

7. What?!? The best health care system in the world gouge the citizens?

Why do you hate America? :sarcasm: ;)

[Matariki]

8. Anyone know if they've hammered out the penalties for not buying?

Is that in the new, compromised bill?

Are they going to use the IRS to collect for the insurance companies? Will people lose their homes and have checking accounts and wages garnished? Or go to prison?

[laughingliberal]

10. We do not know the amount, as yet

The House bill has it at an additional 2.5% of taxable income. The blended bill being debated in the Senate has it at $750 for individuals. My guess is the insurance companies will send out proof of coverage to their customers to be filed with your income tax forms. I'm guessing the 1040's and so on will have a line for you to add your penalty if you do not have your certificate. I doubt it will result in incarcerations but I'm sure we will see the same collection techniques we do for any other unpaid taxes.

[Lance_Boyle]

13. 'the same collection techniques we do for any other unpaid taxes'

Awesome! That means we can rack up years and years worth of unpaid penalties and then settle with the IRS for MERE PENNIES ON THE DOLLAR, like all those tax-dodging millionaires in the TV commercials...

[Matariki]

14. Only millionaires get to do that

The rest of us have our checking accounts garnished right before the rent is due.

At least that was my experience when I was a freelancing artist making under $20k a year.

[leftstreet]

9. Wonder which 1-800-law firm will file the first Class Action suit

I can already visualize the late night commercials

[laughingliberal]

11. I'm just wondering, though, who we sue and for what

I know it feels outrageous that our government can order us to do business with a for-profit industry but I'm not of the opinion it won't pass Constitutional muster.

[Matariki]

12. The plan is to have subsidies kick in after 10% of insurance costs?

So that means a person making minimum wage has to pay 10% of their income before getting the subsidy?

That's going to put a lot of people living paycheck to paycheck in trouble with the IRS.

[laughingliberal]

15. Those at minimum wage will qualify for Medicaid

so, no. Medicaid will suffice as their proof of coverage.

[Matariki]

16. That's good then.

wonder what the grey area will be - between those qualifying for Medicaid and those unable to get any subsidy. Also wonder if insurance fees will get capped at something reasonable.

[laughingliberal]

20. It is one of the groups who will, actually, benefit from this bill

Those people who have been way too poor to pay for any health care but have fallen just outside the income levels to qualify for Medicaid. Have not seen the details of the Senate's compromise yet but did see one report which suggested it might extend Medicaid even further up the ladder of income levels. But the last I saw there would be subsidies to keep those at or below 400% of FPL from paying more than 10-12% of their income out of pocket for premiums.

The price controls on the insurance companies are, likely, to be:

1) Restrictions on higher premiums ie: only allowed to charge so much more for things like age (anywhere from 2 times up to 5 times are the proposals I've seen).

2) A requirement to maintain a certain medical loss ratio ie: insurance companies must spend a certain percentage of their revenue from premiums to pay claims.

[AzDar]

17. BOHICA, people.

:puke:

[Shagbark Hickory]

19. I don't understand

If a single person, no kids, makes 30k a year and currently paying $500 a month for basic catastrophic coverage, that would be 20% of their income, or 6k/yr
How much subsidy are they going to get? Is it a set amount or just enough to get that monthly premium down to 10% or $250/mo?