Wednesday, July 15, 2009

The Healthcare Reform Bill

This is one source (CNN) reporting on the bill, and of course it's still due for a lot of mark-up. But what I see here, just glancing over, gives me hope that we might actually get some kind of meaningful reform.

"According to the CBO, the bill would cover 97 percent of Americans by 2015."

That's notable. Getting the majority of Americans coverage, even if it's shitty coverage, at least moves us from "third world country" in terms of our healthcare to "poorly-run first world country."

"The bill includes tax surcharges on Americans in the top 1.2 percent of income. It proposes a 5.4 percent surtax on couples earning more than $1 million, a 1.5 percent surtax on couples with income between $500,000 and $1 million, and a 1 percent surtax on joint incomes over $350,000 or individual income over $280,000."

I can't be elitist if I think anyone making over $280,000 can spare some taxes, right? Isn't that reverse elitist or something? At any rate, I make less than $100,000 a year - considerably less - so this doesn't affect me, and maybe I'm just anti-capitalist, but it seems to me that if you're making over $1 million dollars a year, you've got money you can spare to make sure your fellow Americans have basic health coverage.

Does that make me a socialist? It does, doesn't it? Damn it!

Oh, and I'm one of those small business owners unaffected by this. I am apparently a "micro business."

" -- A Health Insurance Exchange providing individuals and small business with choices for coverage, including a government-funded public option."

Holy shit, are we actually going to get a public option?

"-- No more coverage exclusion for pre-existing conditions."

Any word on legal penalties for insurance companies that dump folks who have medical issues, like cancer?

"-- Affordability credits for low- and moderate-income individuals and families, available to those with incomes up to 400 percent of the federal poverty level, or $43,000 for individuals and $88,000 for a family of four."

This all sounds in the right wheelhouse. Maybe even more generous than I'd expect. It'll probably be cut down.

"-- Limits on annual out-of-pocket spending."

Hallelujah. Less bankruptcies due to medical costs will have a huge positive effect on the economy.

"-- Expanded Medicaid coverage to individuals and families with incomes at or below 133 percent of the federal poverty level."

Again, sounds pretty fair.

"-- Required participation by individuals, with a penalty of 2.5 percent of adjusted gross income for non-compliance."

I have to admit, I was against any kind of mandate to get health coverage, but I understand the philosophy behind it (requiring preventative care increases the effectiveness of medical care and makes it cheaper for everyone).

"-- Requirement that businesses with payrolls exceeding $250,000 provide their employees with health coverage or contribute up to 8 percent of their payroll on their behalf."

My payroll is small enough that this doesn't affect me... but I already offer health coverage for my employees, because it seems like the right thing to do.

"-- A series of measures intended to reduce costs of Medicaid, Medicare and other existing systems."

All good.

This sounds so much better than I thought it would a few weeks ago. I'm still skeptical, and worried about conservative Democrats blocking things (the Republicans seem too mired in making themselves look like asses at the Sotomayor hearings and having sex outside of marriage to be much of a threat at this point), but this looks much, much better than I thought it would.


tyg said...

On the other hand, something pointed out by Megan McArdle that I'd not previously thought of is that these tax increases are being pitched as percentages of pre-tax income, not percentages of post-tax income which is how they'll hit folk.

So, for example, let's say someone with $2 million a year income lives in California, which has a 10.3% tax rate on the second million, and has a 35% federal tax rate on that second million. That means their take home out of that is about $550K...and the 5.4% surtax on that second million will be $54K, or almost 10% of what they're actually taking home.

Similar for the 1%; it's really more like 1.6% drop in one's take home pay.

And raising taxes does bother me. There's a piece I'm kicking around about just how difficult it is for folk to retire early, although they don't realize it. It's because to stay even, your nest egg has to earn, every year, your withdrawal rate plus inflation....after taxes. And if you're being taxed at even just a combined 33% rate, it means you have to get a return 50% greater than withdrawal plus inflation rates, which is getting past low risk investments.

Randy said...

Tom, you lost me at "$2 million a year."

I work hard, have since I was 16 years old when I got my first pizza job for spending money, I went to college, I've done my time and I'm not likely to *ever* make $2 million a year. It's not entirely certain I'll be able to retire.

So I don't have a ton of sympathy for folks who make more in a year than I will in my life. Especially when sympathy is meant to translate to "they get huge bonuses, I have to worry that if I get sick it'll wipe out my family financially."

I'm not unsympathetic to the notion that many of the folks who are rich got there by working hard, but I can't say I have a lot of sympathy for folks who won't be able to afford payments on their second home so that my family (and the many, many hard-working families that are lower income than mine) can have good, basic healthcare.