KRUGMAN: Do the Math: Guys, this is a major program to aid lower- and lower-middle-income families.

[kpete]

December 26, 2009, 7:44 am
Numerical notes on health care reform

A couple of notes to address complaints about the Senate bill from the left and the center. (There’s no use addressing complaints from the right; in general, the safest thing when dealing with crazy people is to avoid eye contact.)

For people on the left who think this is all a big nothing, consider the subsidies. From the Kaiser Health Reform Subsidy Calculator, here’s the percentage of insurance premiums on the individual market that would be covered by subsidies at different levels of income measured as a percentage of the poverty line (all calculations are for a family of 4 headed by a 40-year-old):


Guys, this is a major program to aid lower- and lower-middle-income families. How is that not a big progressive victory?

.................

The point is that we don’t have anything resembling a free market in health insurance — nor should we. Reform is filling in the gaps in the subsidized, regulated system we already have — which should calm centrists — in a way that offers big benefits to those most in need — which should please progressives.

more:
http://krugman.blogs.nytimes.com/2009/12/26/numerical-notes-on-health-care-reform/

[berni_mccoy]

1. K&R.

[dkf]

2. Paid by taxing 1/5 of households earning $50,000 to $75,000 annually.

Within three years of its implementation, according to the Congressional Budget Office, the tax would apply to nearly 20 percent of all workers with employer-provided health coverage in the country, affecting some 31 million people. Within six years, according to Congress’s Joint Committee on Taxation, the tax would reach a fifth of all households earning between $50,000 and $75,000 annually.

The Senate plan, in turn, includes two proposals not in the House bill – an increase in the Medicare payroll tax for high income workers (producing $54 billion), and a new tax on high-premium employer-sponsored health plans (raising $149 billion).

http://www.dailykos.com/storyonly/2009/12/28/819878/-Health-Care-By-The-Numbers

Its a take from the middle class to give to the lower middle class. Not much of a gain from a progressive point of view.

[Hello_Kitty]

24. God forbid we take anything from the precious rich people. eom

[amborin]

25. what happened to the claim that a tax on the wealthy (>200K yearly) would pay for it?

[Statistical]

26. Yup $50K is INSANELY rich especially city like NYC or Los Angelos. Damn fat cats.

[Romulox]

3. A government mandated private insurance monopoly is the most rightwing policy imaginable.

:hi:

[David Zephyr]

21. It's their fantasy come true. Only in America.

Thanks for saying what this wicked bill is.

[area51]

22. +1

Little wonder that the first person I heard to advance the idea of government-mandated purchase of private, for-profit insurance was Newt Gingrich. What this administration is proposing is GingrichCare.

[grahamhgreen]

33. +1

[Vinnie From Indy]

4. I like Krugman, but

until he addresses the fundamental flaw in the legislation, his views are not persuasive. The flaw is that insurance companies will not be restrained from gaming the system. They will not play fair and they will circumvent any and all of the provisons that would endanger their profits. Without a true public option, ALL of the benefits that are continually trotted out as REAL refrom are nothing but smoke and mirrors.

[earth mom]

5. All this does is screw over the middle class! I can't afford it! How many on DU can?

Here, read this and see if it doesn't make your blood pressure skyrocket:

Blue Cross Can't Wait-The Bloodsucking Begins:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x506034

[jtrockville]

6. We could cut the subsidy by 1/3 and still provide the same assistance.

if we cut out the middle-man. I don't mind helping those less fortunate than me. In fact, I think it's my duty (which is why I'm all in favor of single-payer). But insurance company executives are CERTAINLY NOT less fortunate than me. I deeply resent helping them out.

[dixiegrrrrl]

29. We could cut out ALL insurance payments, and be able to afford decent health care

for everyone.
Think about it. Our money goes to a for profit middleman whose job it is to spend as little of the money as possible on health care.
What if there were no insurance companies?
What if everyone paid 1/10th of the premiums and taxes they now pay, into a Health co-op which paid the doctors and hospitals for decent care?
At one time, there used to be co-ops like that.
What if the government did not need to take out money and give it to the medical community and the insurance community and the advertising community?
what if we looked beyond the arbitrary and by now habitual point of view that has been fed to us?

[jtrockville]

34. Right on, dixiegrrrrl.

That's how it's done in developed, civilized, nations.

[AllentownJake]

7. Yes and in 6 years when we have to pay the bill for the activies of the

Bush administration in destroying everything, and the Obama administrations shot gun approach of cleaning it up, these will be the first thing cut.

[Tansy_Gold]

8. I'm sorry, Paul, but much as I respect you, I can't see this only from

one side of the equation.

If we do indeed have a "regulated" system of health insurance, it's entirely regulated to serve the insurance companies. They design the regulations and they decide which ones they will deign to pay anything more than lip service to.

My understanding is that those of us who have no insurance right now will be forced to fork over our hard earned cash -- what's added to it as a "subsidy" is also our hard-earned cash since it comes from our taxes anyway -- for benefits that we won't be able to use at all for three or four years. And when we ARE able finally to use them, we will first have to fork over even MORE of our hard-earned dollars -- deductibles, co-pays -- before the real beneficiaries (the insurance companies) have to make their contribution.

Yes, there are benefits, Paul, but are they even close to equal or fair? Who ends up with the lion's share -- and I use that metaphor reluctantly, given Ted Kennedy's sobriquet as lion of the Senate -- of the payments?

It's a gamble, Paul, and I don't think anyone knows this as well as those of us who have seen how it works. When my husband was diagnosed with terminal lung cancer in 2005, he had insurance through his employer. We had co-pays for doctor visits and individual treatment sessions of $25. These quickly added up, but they were manageable. Then he was hit with a spinal compression that necessitated emergency surgery. The bill for that alone was $114,000. AEtna paid it all. He had worked for the same company for 20 years and they had paid on his policy (with various insurance companies) all that time with almost no claims ever made. So in terms of coverage and benefits received, we got more than was ever paid in premiums.

So I don't have a problem with the necessity of paying premiums even though you may not immediately or indeed ever receive benefits equal to what's been paid in.

What I do have a problem with, however, is the idea of paying in and KNOWING THAT THOSE BENEFITS ARE NOT GOING TO BE AVAILABLE OR AFFORDBLE.

Adding up premiums and deductibles puts health care out of the reach of too many people, especially those the insurance is supposed to cover. More important, however, is that those premiums go right into the pockets of the insurance companies who have lobbied against meaningful reform, who have blocked (indirectly through paid lobbyists) a meaningful public option, who have kept medical care costs high, and who have, essentially, created the problem they now set themselves up as fixing.

This is Munchausen by proxy syndrome writ humongous, and you're asking us victims to be grateful we're rescued by someone who could very easily put us right back in harm's way only worse the next time.



Tansy Gold

[rudy23]

9. I wonder what Krugman thinks about the middle class?

Probably not too much.

[Javaman]

10. "do the math" is just another way of saying "be happy with what you got".

well, I'm not happy and I'm not a fan of the new math.

without a public option, we got nothing.

[Meshuga]

11. The bill may benefit those families with income up to 5 time the poverty line

That's great and I am all for that but what about those who fall just above that line? Especially if they have health benefits through employement? Taxing health benefits is going to create a burden on a group of people who might also need help in this regard. My fear is that a huge chunk of the middle class that gets benefits from the employer might be worse off with this bill if passed.

[laughingliberal]

12. Even looking at this bill in the context of health care only...

it does not help as much as the proponents would have you believe. As has been discussed ad nausem the premium costs are only one part of this. Premium costs and out of pocket expenses will make the coverage still out of reach for many.

The bigger picture to me is the further downward pressure on middle class incomes. Consider the year you manage to get a raise which puts you a couple of dollars over the limit for a subsidy. You will then be responsible for your entire premium and have less money than before your raise. How big a raise would you have to get to cover the cost of your premium going up that much? How many years will you work before you're in the same place you were before the raise?

[freddie mertz]

13. It sucks. I couldn't afford it, and my taxes are going up and my HC benefits cut.

Did I mention that it really, really sucks?

[JoeyT]

14. Excellent.

We'll (very very arguably) improve the lot of the poor by slitting the throats of the union workers/middle class.
Tax the rich?! Pay their fair share?! Who the hell wants that?! What are you, some kind of socialist?

[blueworld]

15. It actually pains me that he's writing this stuff about HCR

The only figures available at the moment show decisively that the PERCENTAGE of household income spent out of pocket DECREASES at higher income levels. Does even Krugman think the generic drug fiasco, prescription regulations and "opt-out" horrors won't offset his numbers??? Does he actually think that this sow's ear can and WILL be turned into a silk purse over years if we just rush it through?

I'm sorry, I don't want to offend anyone, but IMO this is like the "wise" asking MLK to accept Civil Rights changes "slowly" decades ago. Like, "Gee, we'll keep the separate bathrooms cleaner so you won't have to complain about the segregation, okay"? "Take it slow. Don't expect too much all at once. It'll get better". BULLSHEET!

By nature I choose to make lemonade, after a little kvetching about the looks of the lemons; but not this time. IMO without a viable public option (at least) this bill will drive a stake through the heart of the lower & working class. I don't care how many initial numbers look pretty & sparkly, in 3 years let's see what Big Pharma & Big Insurance will have "changed" to secure their profits in the face of even pathetic reform.

My credit card rates have skyrocketed, my insurance premiums are higher, my damned satellite company AND my phone company just raised their rates! Does Krugman think this "can't" happen with health care companies anticipating the impact of "reform"???? Sorry for the length, ladies & gents, but I'm nearly frantic about this. :rant:

[kestrel91316]

16. If the online Kaiser calculator is fairly accurate, under the Senate plan

I would benefit considerably. I would, for the first time in over 5 years, be able to afford insurance, at least through Kaiser, which has a big hospital 2 miles from my office.

[TomClash]

17. The poverty line for a family of 4 is about $22,000 in 2009

So the family of 4 making 300% above the poverty line ($66,000 per year) gets a 30% subsidy on their premium, which would mean they pay at least $8,000 per year. Even if there is a 10% cap that is still $6,600 in after tax dollars. How is that considered affordable?

[berni_mccoy]

18. delete.

wrong data.

[bvar22]

19. Krugman working hard to put lipstick on the pig.

The Extortion Demand by the Health Insurance Cartel:
Give us a TRILLION DOLLARS, or we will continue let poor people die.
Same as we have always done.
Give us that TRILLION, and we might help some of them.

YES. Some people WILL get subsidies.
These people WILL BE REQUIRED to immediately hand those "subsidies" to the For Profit Health Insurance Industry...the same people who have CAUSED the problem.
Ultimately, this is nothing more than a HUGE transfer of Public Wealth to a for Profit Corporation that manufactures NOTHING, and creates NO Wealth..

...ALL in the disguise of "helping poor people".

YES.
Some few people WILL be able to access Health Care.
But the MAJORITY will not be able to afford (high deductible & Co-pays) to use the junk insurance they will be FORCED to BUY.

This money could be better spent.

For perspective:
Look at ANY of the Health Care Programs in ANY of the other civilized countries in the WORLD, and compare tit to this monstrosity that The Democratic Party is going to ram down out throats.
"A Uniquely American Solution"....INDEED.

Thanks, Barack.
Thanks, Democrats.

You WILL reap the Whirlwind.
(I think they already know this, but just don't care.
Time for One More Smash & Grab.)

[EFerrari]

20. Lipstick on a serial killer, not a pig.

This is the very lowest I've ever seen Krugman go.

[Lydia Leftcoast]

27. Countries with REAL health care systems have

> No deductibles

> No rescissions

> No exclusions

> No copays, or only modest copays

> No medical bankruptcies

> No people without access to health care

> No concept of "out-of-network services"

> If there's a difference in premiums, it's based on INCOME rather than age or state of health

> Insurance companies regulated like utilities (if the country's system uses private companies at all)

> Drug prices negotiated on a national level and available free or at low cost to patients (about $13 in the UK, free to seniors)

What they do NOT have is requirements to buy private insurance at whatever price the insurance companies want to charge (with government subsidies if the patient can't pay--such a wondrous piece of corporate welfare!), with 20% allowed for "overhead" and no obligations on the companies to make the policies useful.

[4dog]

23. Krugman in 1993 thought NAFTA was no big problem for workers

Check out Krugman's 1993 predictions about NAFTA. He could not see the problems then.

http://www.pkarchive.org/trade/ForeignPolicyStupid.html

... snip from above:

The truth about NAFTA may be summarized in five propositions:

* NAFTA will have no effect on the number of jobs in the United States;

* NAFTA will not hurt and may help the environment;

* NAFTA will, however, produce only a small gain in overall U.S. real income;

* NAFTA will also probably lead to a slight fall in the real wages of unskilled U.S. workers;

* For the United States, NAFTA is essentially a foreign-policy rather than an economic issue.

[grahamhgreen]

32. A real brainiac on NAFTA!

[onpatrol98]

35. Krugman and NAFTA

I always remember Krugman and NAFTA....and Pat Buchanan, who I have loathed for years and can't bear to listen to was actually right about NAFTA. I come close to needing a stiff drink, just thinking about it.

Of course, even a broken clock is right twice a day.

[seeinfweggos]

28. krugman nails it! as usual.

k&r

[grahamhgreen]

30. But the money GOES TO BIG INSURANCE, not the poor. It does not aid them, it forces them to buy a

policy that may or may not pay out if you get sick, and, after a few years of big insurance lobbying, will never pay out a dime.

So all you are really doing is taxing the middle class and giving it to big insurance.

The 'benefits' the poor will receive will be temporary, at best.

Soon, the middle class will be calling to end the program as their tax burden is increased, while big crapsurance greases the palms of senators to make any real reform moot.

It's so obvious, everyone knows it, that's why the plan has 30% approval.

[Doctor_J]

31. Yes, by making middle income people pay more to Big Insurance

So what?

[ljm2002]

36. There's one teeny, weeny flaw though...

...and that is, that before those lovely subsidies kick in, at the end of the year, folks have to come up with the premiums. If they don't come up with the premiums -- most likely for the poorest, who would receive the highest subsidies -- then they'll have to pay a fine, which is not subsidized nor does it go towards insurance for them.

Oh, and of course, the plans will have a couple of good features but in general will have high deductibles and copays.

I really wish I could believe it would be as helpful as people like Krugman claim it will be. But I'm not sure at all.

Then, of course, if it does end up taxing the middle class, and create another race to the bottom in the actual plans that are offered, there will be a backlash of epic proportions, as people remember the slogan "If you like what you have, you can keep it."

Now am I wrong about those subsidies? Do they get paid ahead of time? If so, then I might be willing to hold fire.