Last night, ridemybike wrote a diary on BCBS's forcing him out of his old basic insurance plan and into a higher-priced plan that he simply cannot afford.
Of course, one could look at it as Blue Cross' wanting to belly up to the banquet table one last time before it's shut down -- but it's actually more like an appetizer before the main course of gluttony that will commence once the mandates take effect in a few years.
More past the jump.
Over at her blog, Emptywheel shows how the basic child-care costs for just one generally healthy preschool child can drive a middle-class family into debt under the plan in the Senate bill.
Here’s a version of one family’s total household costs under the plan: a middle class family with two cars and some child care costs. Note, in this scenario, I’m assuming the middle class family will pay 7.9% of its income for health insurance premium, significantly less than the 9.8% the plan assumes that family could pay to get the subsidies available. This, then, shows what a family would be required to pay (or incur a penalty) under the 8% opt-out rule.
301% of Poverty Level: $66,370
Federal Taxes (estimate from this page, includes FICA): $8,628 (13% of income)
State Taxes (using MI rates on $30,000 of income): $1,305 (2% of income)
Food (using "low-cost USDA plan" for family of four): $7,712 (12% of income)
Home (assume a straight 30% of income): $19,275 (30% of income)
Child care (average cost for just one pre-school child in MI): $6,216
Health insurance premium: $5,243 (7.9% of income, max amount before opt-out w/o penalty allowed)
Transportation (assume 2 cars, 12,000 miles each, @IRS deductible cost of $.55/mile): $13,200*
Heat, electricity, water: $1,500
Phone, cable, internet: $1,200
Total: $64,276 (97% of income)
Remainder (for health care out-of-pocket, debt, clothing, etc.): $2,091
In other words, assuming this family had no debt (except for that related to the two cars), no clothing costs, and no other necessary costs–all completely unrealistic assumptions–it would be able to incur just $6,970 of medical care out-of-pocket costs before spending all that $2,091 and going into debt (the opt-out is based on an insurance plan that provides 70% of costs, so this assumes the family will pay 30% of health care costs). Yet that family would be expected to spend up to $5,882 more out of pocket before the "subsidies" started picking up its out-of-pocket expenses. (If the family paid the full 9.8% of its income on premiums–at which point it would become eligible for subsidies under the plan–it would have just $825 left to spend on all other expenses, including health care out-of-pocket expenses.)
This family couldn’t even go through a normal childbirth without going into debt.
Just think: Under this "affordable" health care plan just passed by the Senate, you could be in debt to the tune of a typical two-bedroom house mortgage in Detroit by the time your kid hits kindergarten -- and without any particularly exotic diseases to run up the tab.
And if you think that "hey, we can just fix it in conference", think again -- Senator Landrieu and the other insurance-industry allies have said that they'll try to kill the bill themselves if any efforts are made to fix it for us. (Of course, if Harry Reid had gone the reconciliation route in the first place, he could have passed the House bill without needing to placate Landrieu and her friends. But that's not what Rahm wants, as it would tick off the folks at PhRMA with whom Rahm and Obama have cut a deal, among others.)
Oh, and don't put too much faith in the Kaiser subsidy calculator, either. It's a wee bit optimistic.
UPDATE: Emptywheel answers Nate's critique of her numbers that so many of you have cited:
Nate uses a different method than me; rather than building costs up from individual estimates as I did (indeed, Nate never shows what my hypothetical family’s budget would look like), he looks at BLS data, and argues that either, "this is significantly more than most two-child families will be spending on these services — probably by a margin of $10,000 or so," and/or my hypothetical family, "does not have a reasonable and responsible gameplan to begin with."
Now, Nate hasn’t actually shown that. Instead, his primary source of numbers shows what the average family in this income bracket ($50,000 to 69,999) would spend. And that family is older (average adult age of 47) and smaller (2.7 people, with just .7 kids) than the family I was discussing. That’s significant in ways that make his costs too low on several counts. For example, over a fifth of the people in the BLS estimate own their home outright. A significant portion are single or couples. Adding older home-owners and singles needing smaller homes into his consideration almost certainly means Nate’s housing costs are too low for a family of four or even three. Similarly, Nate’s figures for food expenses are low by $1,324 (and his average family eats out, which USDA assumes my average family of 4 does not for its calculations).
Plus, Nate doesn’t point to the places where my estimates (based on real expenditures) are quite low, according to the numbers Nate uses. I said this family spent $1,500 a year on heat, electricity, and water; his numbers say the average 2.7 member family would spend $2,823. I said this family would spend $1,200 for all telecom services; Nate’s data says this 2.7 member family would spend $1,253 on telephone services alone, with cable, at least, presumably included in the $1,141 of audio and visual equipment and service. So, accepting Nate’s numbers for these services would mean both my costs and probably his, too, for utilities and telecom are still too low for a 4-person family.
There's much more at the link, but the bottom line is this: Even Nate's own numbers (assuming they're correct as opposed to being too low) show this plan is unaffordable for a middle class family.