Health Bill: What Would It Cost Me?

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That has been one of the hardest questions to answer, in part because everyone’s situation with regard to health care is so different.

Today, the Congressional Budget Office and the Joint Taxation Committee issued an analysis that is pretty dense to read, but suggests the Senate version of the bill would, overall, be a good thing for the wallets of American consumers. Just how much you might benefit depends on your situation. And some people may find themselves spending more than they do now for health coverage. Here are some of the ways it affects different people:

For most of us, who are among the 134 million lucky enough to have coverage through large employers, the difference is pretty negligible.
CBO and JCT predict that our premium costs would drop somewhere between 3% and not at all. Most large businesses already offer coverage as generous as that which would be required under the new law. And those who work for large employers are not hit by some of the egregious practices we have seen in the individual and small-group markets, such as those where people are denied coverage on the basis of pre-existing conditions.

For small businesses (50 workers and less) and those who work for them, the projected difference in premiums is also small, a decrease of between 0% and 2%. But that in itself is a big improvement. Currently, small businesses are among the hardest hit by rising health care costs, which is why more and more of them are dropping coverage. The analysis predicts that the bill would bring an end to this trend, in part because it would offer them tax credits and the ability to join new exchanges where they could become part of a large pool of purchasers. But some firms might actually be encouraged to drop their current coverage. Again, it depends on their circumstances:

Under the legislation, new insurance policies sold in the small group market would be subject to the same rating rules as policies sold in the nongroup market. In particular, insurers in the small group market could not vary premiums to reflect the health of firms’ workers. That change would reduce premiums for small firms whose employees are in relatively poor health—leading some of those firms that would not offer insurance under current law to do so under the proposal—and increase premiums for small firms whose employees are in relatively good health—leading some of those firms who would offer coverage under current law not to do so under the proposal.

For people who don’t get coverage at work, and have to go out and buy it on their own, there’s bad news and good news. The bad news is that premiums would go up–between 10% and 13%*. The good news is that someone else–the federal government, to be precise–will be footing much of the bill, in the form of subsidies. The amount of that subsidy would depend on your income. Bottom line: The average amount that people eligible for subsidy (those earning under 300% of poverty, or about $66,000 a year for a family of four) pay on the individual market would be somewhere between 56% and 59% lower than it would be with no change in the law.

But then, many people now go without coverage, some of them by choice. For healthy people who now pay nothing (and pray that nothing bad befalls them) a requirement that they go out and buy health insurance may not look like such a good deal, even if they don’t have to pay as much as they would now for it. Another group that may be unhappy are people who don’t get coverage at work, but who are too wealthy to qualify for subsidies. A family of four earning 400% of poverty (or about $88,000 a year) would find itself paying $19,100 a year for health care. (That wealthier group accounts for about 10% of the uninsured, according to an estimate by the Kaiser Family Foundation.) That’s a tough financial burden to shoulder, even when the benefit they get in return is health insurance.

UPDATE: I should have noted that the reason the premiums would go up, according to CBO and JCT, is that the benefits that would be mandated under the new law (things like maternity care, prescription drugs and mental health and substance abuse treatment) would be more generous than many people now get when they go out and buy coverage on their own. Addtionally, insurers would no longer be allowed to deny coverage based on pre-existing conditions, and they would therefore charge more to cover those additional costs.