Senate Health Care Bill Would Force Some Middle Class Families to Pay $15,200 Yearly Insurance Fee, According to CBO Analysis

Tuesday, December 15, 2009
By Terence P. Jeffrey, Editor-in-Chief

(CNSNews.com) - Forget the public option. Even without it, the health care bill presented in the Senate by Majority Leader Harry Reid (D.-Nev.) would make some middle-class American families pay what amounts to a $15,200 annual federally-mandated insurance fee, according to facts revealed in analyses published by the Congressional Budget Office.

The fee would result from the facts that the bill requires individuals—but not employers—to purchase health insurance plans and that families that earn up to 400 percent of the federal poverty level would be given government subsidies to purchase insurance in government-regulated insurance exchanges while families earning more than 400 percent of the federal poverty level would be denied government subsidies.

A family of four—two parents and two children—earning $88,200 would be at 400 percent of the poverty level this year, according to the U.S. Department of Health and Human Services. A family of four earning $88,201, therefore, would not be eligible for a federal subsidy to buy insurance under the Senate health-care bill. If the mother and father in such a family could not get employer-based health insurance—because their employers decided not to buy their workers insurance—the family would be required by law to purchase a policy with its own money that would cost an estimated $15,200 per year, according to the CBO.

The basic facts demonstrating that this would be the case if the Senate health care bill were to become law were presented in letters that the CBO sent to Sen. Harry Reid (D.-Nev.) on November 18 and to Sen. Evan Bayh (D.-Ind.) on November 30. The letters are available on the CBO Web site.

Here are the facts about what the Reid health care bill would mean for the finances of families that earn more than 400 percent of the poverty level and the CBO sources for those facts:

Fact 1: The bill requires all legal U.S. residents to buy health insurance beginning in 2014.

Fact 2: The bill provides subsidies to people making up to 400 percent of the poverty level to buy health insurance if their employer does not buy them insurance and as long as they agree to purchase a government-regulated insurance plan in the government-regulated insurance exchange.

Source: Page 4 of a Nov. 18 CBO letter to Sen. Reid states: “The legislation would take several steps designed to increase the number of legal U.S. residents who have health insurance. Starting in 2014, the legislation would establish a requirement for such residents to obtain insurance and would in many cases impose a financial penalty on people who did not do so. The bill also would establish new insurance exchanges and would subsidize the purchase of health insurance through those exchanges for individuals and families with income between 133 percent and 400 percent of the federal poverty level (FPL).â€