THE TREATMENT OCTOBER 26, 2009
As political pressure has reduced the price tag of expanding coverage to below $1 trillion over ten years, many observers assumed Democrats would react by trimming financial assistance for the middle class--that is, people making between twice and four times the poverty line, or between $44,000 to $88,000 for a family of four.
The assumption was that if Democrats had to make tough choices about what to cut, they'd protect the the poor and most vulnerable. After all, they're Democrats.
But now it appears that assumption may be wrong--or, at least, not entirely right.
As recent work from the Center on the Budget and Policy Priorites has shown, the bill that the Senate Finance Committee approved actually offers substantially less protection for people making less than twice the poverty line. If the bill were to pass, the result could be significant financial hardship for people least equipped to deal with it:
The greatest concern relates to people with incomes below 200 percent of the poverty line (below $36,620 for a family of three in 2009). The amounts that families between 133 percent of the poverty line (where Medicaid eligibility generally would end) and 200 percent of poverty would have to pay for insurance purchased through the health insurance exchanges would be as much as two to four times higher as under the Senate HELP Committee or House bills and would constitute a substantial burden for many of these households.
The good news is that the bill from the Senate Health, Education, Labor, and Pensions Committee (HELP) is considerably more generous. And the Senate leadership must combine the two. (In fact, that process is supposed to wrap up today.)
But providing assistance to the poor and middle class that's on a part with the Senate HELP bill would likely require allocating more money than the Finance bill sets aside. And that's something Senate leadership is already struggling to do, since much of the Democratic caucus seems more interested in scaling back the revenue measures already on the table, starting with the tax on high-benefit insurance plans.
Indeed, the really scary part of this story is that, under pressure to make more out of less, the Senate Finance Committee has apparently put on the table a proposal that would scale back subsidies for the poor even farther.
I say "apparently" because one reliable source, close to the process, tells me the idea isn't really under consideration. But two other sources (also very reliable) swear the proposal is very much in the mix. In fact, they say, the Finance Committee has actually sent the measure to the Congressional Budget Office for an estimate of how it will affect reform's bottom line.
It seems to be serious enough that Center on Budget--which has gotten wind of this story, as well--has studied what the proposal would mean in practice.
A family of three earning $27,465 a year before taxes — that is, at 150 percent of the poverty line--would have to pay $1,318 a year for health coverage under a proposal that Senate negotiators are considering for a merged health reform bill that they would bring to the Senate floor. This is more than such a family would pay under either the Senate Finance Committee health bill or the bill that the Senate Health, Labor, Education, and Pensions (HELP) Committee approved, and represents a large amount for families that often have difficulty paying the rent and utilities and putting food on the table.
This $1,318 premium charge, which would represent 4.8 percent of the family’s income, is nearly five times the $275 that the family would pay under the Senate HELP bill and $82 more than the $1,236 it would pay under the Finance bill.
Those amounts may not seem like a lot of money, but keep in mind those are only the premiums. Co-payments and such are separate. More important, when you're supporting a family of four on $29,000, a few extra hundred dollars makes a huge difference.
To be clear, the apparent purpose of this latest shift is to boost assistance for the middle class, in order to make sure people sign up for the insurance. That's a worthy goal--and a necessary one, most likely, with the Senate simultaneously reducing the penalties for people who don't comply with the requirement to get insurance.
But the way to help the middle class is to allocate more money for reform--not to take money away from the poor. Democrats don't do that. Or, at least, they shouldn't.