I saw this comment on one of mistermix’s Obamacare posts, and I think it’s a good point to discuss:
I’m not talking about people with good salaries who don’t buy insurance, I’m talking about people who are living paycheck to paycheck and yet don’t qualify for the Obamacare tax credits. These people do not have an extra few hundred bucks a month to pay for health insurance, they can barely pay the bills they have. Don’t you know anyone like that?
As an aside, most people with good salaries already have employer-provided health insurance and will continue to have it after Obamacare is implemented. I’m talking about people with part-time jobs and so on.
If we want to compare two people after the Patient Protection and Affordable Care Act we could compare two people with the same modest income, where one has employer-provided insurance and the other doesn’t, because people who have employer-provided health insurance generally pay something towards it. How much does the person who has employer-provided health insurance pay towards their employee plan and how much will the person who doesn’t have employer-provided health insurance pay towards the PPACA? I think that’s a worthwhile comparison, because the idea was to put the uninsured person on roughly the same footing with the insured person, not to have the Obamacare person come out ahead of a person who is insured through their employer. Love it or hate it, the idea was to preserve the existing system, and add the uninsured.
People who make $25,000 a year at one large company here pay about $110 a month towards their employer-provided health insurance plan. In comparison, an uninsured 30 year old adult who makes $25,000 a year will pay $144 a month under Obamacare. I recognize that employee contributions towards employer-provided health insurance vary widely, but I do think $110 a month is about the middle locally. I’ve seen higher and lower. Looking at this 2012 report (pdf) on what people are contributing towards employer-provided insurance, this is the average they have, annually:
Looking at the dollar amounts that workers contribute, the average annual premium
contributions in 2012 are $951 for single coverage and $4,316 for family coverage
For a lower wage worker, I chose $9 dollars an hour because that’s the going rate for temps here. That person will pay $72 a month under PPACA, if full time. If that person has a part time job at $9 an hour they qualify for Medicaid, and pay nothing (in cash, but of course we all pay taxes).
One could also consider two other parts of the PPACA when looking at lower or middle income workers, and those are the large employer mandates, where the employer will be fined if they don’t provide insurance, and the provisions for small business. It’s an attempt at a universal system, so piecing it out won’t always tell the whole story. Our uninsured worker could end up with employer-provided insurance, or end up as a “small business”. We have a lot of self-employed people here, they have a truck and tools, they don’t make a whole lot, and they’re all uninsured unless they have insurance through a spouse. The person who always comes to my mind is an acquaintance of mine who installs carpet. Truck and tools and magnetic sign. He broke his hand two years ago and could not afford the $11,000 for surgery. He now has a permanently crippled hand because he went without surgery. He’s 50, and all he knows is installing carpet. He works with the damaged hand.
As far as the politics of charging this uninsured person $144 dollars a month for the PPACA, I think one has to look at both groups of people, those who currently have employer-provided health insurance and contribute towards that and those who don’t. While charging the uninsured person $144 dollars a month may be unpopular, charging the uninsured person nothing while the (currently) insured person pays $110 dollars a month for essentially the same insurance through their employer would also be problematic politically. People won’t think that’s fair.
I think we could have a more honest discussion about health insurance parity between groups if we refused to accept it when media and conservatives characterize employer-provided health insurance as a generous gift to employees from employers. Employers don’t generally give employees gifts worth thousands of dollars, obviously. That’s ridiculous. It’s all compensation for work, in one form or another. I don’t know what else it could be. Charity? Really? In this example it doesn’t matter, because we’re talking about an employee’s actual weekly cash contribution towards health insurance not the employer side of that equation, but I think it’s important to keep in mind that we’re all paying for our employer-provided health insurance, one way or another, and people wil be paying for Obamacare, too.