Premium Subsidies Calculator
|September 23, 2009||Posted by ITUP under Blog||
All the proposals on the table include an individual mandate, meaning you will be legally obligated to have health insurance. Let it be clear that this is the ONLY way to achieve 95-100% coverage levels outside of a single payer system (mostly due to the fact that relatively healthy people will not value the service and will not buy, thus removing themselves from the risk pool).
To mandate coverage, insurance costs must be deemed affordable (somewhere between 7-12% of income, though much lower for people in poverty) at every income bracket. At current average premium costs, this means reform must include longer-term mechanisms to lower costs as well as immediate subsidies to those who can’t afford it. KFF has put together a nice premium subsidy calculator to see how certain individuals/families can qualify for subsidies, as well as the degree of premium affordability for the different bills.
For example, a family of four at 300% of poverty ($66,150 a year) that is not offered coverage by an employer would have to pay on average around $13,000 for adequate insurance. Nearly 20% of their income, this is clearly not affordable. Under the Baucus Plan, the affordability level for this family would be capped at 10% of income, meaning they would qualify for a government subsidy for the amount over this threshold (the additional 10%, or about $6,500).
You can play around with different affordability levels, and compare the different proposals using the calculator.