Health care plan closes some but not all gaps

WASHINGTON—You're a 51-year-old single mother raising two kids and juggling a mortgage and a car loan. Because you're self-employed, getting health insurance has always been a problem. Under the new Senate plan, you still might have to stretch your budget to pay premiums even if the coverage is more secure.

The health care plan unveiled Wednesday by Finance Committee Chairman Max Baucus, D-Mont., strives to contain costs for taxpayers, reducing the risk that covering the uninsured will blow the federal deficit wide open. But that means benefits are not as generous as in competing plans from Senate and House Democrats.

"We've done everything imaginable to get the most generous, most affordable coverage we can within President Obama's target of $900 billion," Baucus said, referring to the president's 10-year estimate of what the legislation should cost.

A free lunch it's not.

For consumers, the Baucus plan comes with costs and benefits, rights and responsibilities. Though people with employer-provided health care would not see dramatic changes, the plan is broad enough that it would touch every American family in some way. Here's a look at how consumers in different circumstances would be affected:

-- Self-employed head of household.

If anyone is meant to benefit from the plan, it's people who have to scramble to find and keep coverage because they work for themselves, not a large employer.

Baucus would eliminate onerous insurance practices, such as denial of coverage due to a pre-existing health problem. But subsidies in the plan may not be enough to make coverage affordable for all middle-class families, who would be required under the bill to carry insurance.

The Washington-based Center on Budget and Policy Priorities, which advocates for low-income people, compared the Baucus plan to two other major proposals -- the House Democratic plan and the Senate health committee bill.

A family of three earning about $55,000 -- three times the federal poverty level -- would have to pay 13 percent of its income. That's roughly $7,100 a year. It compares with costs of about $5,500 under the House bill, and $4,300 in the Senate health committee bill.

A three-person family earning about $27,500 would have to pay 5.5 percent of its income, a premium of about $1,570. That compares with $824 a year in the House legislation, and $275 under the Senate health committee proposal.

"They're getting subsidies, but the question is, do those subsidies go far enough both for the premiums they have to pay, as well as the cost-sharing charged under the plan," said Edwin Park, a health care analyst with the center.

The numbers used in the examples are based on 2009 incomes. The dollar figures would likely be higher -- to account for inflation -- when subsidies take affect under the plan in 2013.Continued...

Posted by Economic at 6:07 PM