Reid version of ObamaCare would slam middle class

No wonder Harry Reid wants to end debate on the bill.   Keith Hennessey reviews the data from the Joint Committee on Taxation and discovers that while a small set of middle-class earners will have to spend less on insurance premiums, over 68 million will have to pay more — a lot more.  Only a quarter of that number will see a net benefit:

Here’s the quantitative summary for the Reid bill.  All figures are for the year 2019, and in each case these are net results of premium changes, tax subsidies, and tax increases.

17.8 million individuals, families, and single parents with incomes under $200K will be net financial winners (11% of all tax returns under $200K):

• [Of] that 17.8 million total, 13.2 million of them will benefit from the government subsidy for health insurance, net of any premium increases.
• The other 4.6 million of them will also benefit, netting out their premium reduction with the higher taxes they will pay.  These people in general will not get a health insurance subsidy.

68.4 million individuals, families, and single parents with incomes under $200K will be net financial losers (41% of all tax returns under $200K):

• In general these people are not eligible for premium subsidies, so the effects of he Reid bill on them are direct premium effects and/or tax increases.
• Within this group, here are some representative averages, taking into account premium changes, tax subsidies for premium purchase, and tax increases:

• Within this population of 68.4 million net losers, an average individual working for a small business who gets health insurance through the small group market will be worse off, even if his income is below $10K per year:
  • Income of 0 – $10K:  He pays $31 more (per year).
  • Income of $10K – $20K:  He pays $99 more.
  • Income of $20K – $30K:  He pays $202 more.
  • Income of $30K – $40K:  He pays $325 more.
  • Income of $40K – $50K:  He pays $377 more.
  • Income of $50K – $75K:  He pays $576 more.
  • Income of $75K – $100K:  He pays $681 more.
  • Income of $100K – $200K: He pays $726 more.
• If this individual works for a large employer buying insurance in the large group market, the bill helps him if his income is <$20K, and hurts him if his income is >$20K:
  • Income of 0 – $10K:  He pays $135 less.
  • Income of $10K – $20K:  He pays $67 less.
  • Income of $20K – $30K:  He pays $36 more.
  • Income of $30K – $40K:  He pays $159 more.
  • Income of $40K – $50K:  He pays $211 more.
  • Income of $50K – $75K:  He pays $410 more.
  • Income of $75K – $100K:  He pays $515 more.
  • Income of $100K – $200K: He pays $561 more.

For an average family among the 68.4 million losers getting insurance through the small group market (including most small business employees), they are on average better off if their family income is <$20K, and worse off if their income is >$20K.  If they get insurance through a large employer, the breakpoint is $30K.

For an average single parent among the 68.4 million losers, he or she will be better off if income is <$20K, and worse off if income is >$20K, whether he or she gets insurance in the small group or large group markets.

In other words, the middle class will be paying the freight for this system, starting at incomes at the very bottom of that class. Democrats want to sell that as a “middle-class tax cut,” but the only middle-class taxpayers who will see any benefit at all are ironically those who get thrown out of their existing health-care plans by businesses hoping to dump costs.

Meanwhile, attempts to paint this as some sort of new solution ran afoul of the bloggers at Verum Serum, who note that the late Senator Ted Kennedy offered precisely this kind of proposal as a “40th birthday present” from Medicare to the American people. Kennedy even included access to the Federal Employee Health Benefit Plan:

To make the transition from the current splintered system, I propose to phase in Medicare for All age group by age group. Starting with those closest to retirement, between 55 and 65. Aside from senior citizens themselves, they have the greatest health needs. And the highest health costs.

The whole thing boggles Morgan’s mind:

I’m still trying to wrap my mind around how we went from a situation only a week ago where not only was the defeat of the public option virtually inevitable, but where it’s defeat also threatened to bring the down the entire health reform effort along with it. And here we are now looking at the biggest step towards a single payer system since the inception of Medicare.

I don’t know how we got here but the conservative opposition and other aligned interests better wake up fast and mobilize against this. Senator Kennedy’s life-long dream is a nightmare for anyone who cares about individual liberty and the fiscal prosperity of our nation. This effort must be stopped if at all possible.

And that doesn’t even take into consideration the impact a Medicare expansion, with its anemic compensation rates, will have on providers in the US. The Mayo Clinic and other providers warned that hospitals and clinics will go bankrupt as Democrats push millions of more Americans into coverage that pays inadequate compensation for the costs involved. It will act like a bomb on supply in the health-care system, driving up the demand-supply ratio and either prices or rationing along with it. It’s the worst of all worlds.