Mandatory Health Insurance May Hit Middle Class

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All the health care bills circulating through Congress, including one unveiled Wednesday — require people to carry health insurance. The bills also include some government subsidies to help them pay for it. The latest bill, however, provides less generous subsidies, which could make it harder for middle-class families to afford the mandatory insurance.


All of the health care bills circulating through Congress, including the final one unveiled today, require people to carry health insurance. The bills also include some government subsidies to help them pay for it. The latest bill, long awaited from the chairman of the Senate Finance Committee, provides less generous subsidies to keep costs down.

As NPR's Scott Horsley reports, the smaller subsidies could make it harder for middle-class families to afford the mandatory insurance.

SCOTT HORSLEY: When Massachusetts overhauled its own health care system three years ago, it included requirement for all residents to carry health insurance, just as Congress is considering now. Massachusetts offered subsidies to help families earning up to three times the poverty rate. For Mark Freedman(ph) and his family, the newly affordable insurance was a welcome relief.

Mr. MARK FREEDMAN (Teacher, Economics): It was excellent. You know, we paid $330 a month, and my wife and I received very good health insurance for that price.

HORSLEY: But after about a year, Freedman, who teaches economics at several colleges around the state, got a raise. And once his income topped about $55,000, he was no longer eligible for the subsidized insurance.

Mr. FREEDMAN: I made a few thousand dollars over the limit. And it's on or off, black or white, you exceed by one penny and chow-chow, you buy your own insurance.

HORSLEY: Freedman went shopping for private insurance, but found a comparable policy for his family of three would have cost about $15,000 a month, more than he pays in rent. Even a catastrophic policy would have cost about a thousand dollars a month. So, Freedman wound up doing without.

Mr. FREEDMAN: We're in this situation where the state says, you make too much, you're too rich. We're not giving you anything, no subsidy. But at the same time, there's nothing affordable out there for you, so chew on that.

HORSLEY: Tens of thousands of other middle class residents are in the same boat. Carol Pryor, who is research director for a Boston nonprofit called The Access Project, says many of the remaining uninsured in Massachusetts make too much money to qualify for subsidized insurance, but too little to easily buy it on their own.

Ms. CAROL PRYOR (Research Director, The Access Project): There is a gap in the middle and that is troublesome.

HORSLEY: And that gap would likely be even wider under the national health care plan unveiled today by Senator Baucus. Under that plan, a family of four making $66,000 a year could pay as much as $715 a month, even with a government subsidy. Senator Baucus whittled away at the proposed subsidies in the plan in order to lower the overall price tag.

Senator MAX BAUCUS (Democrat, Montana): We've done everything imaginable to get the most generous, most affordable coverage that we could, within President Obama's target of $900 billion.

HORSLEY: Critics complain the Baucus bill would lead to big, out-of-pocket expenses for middle income families. They'd be required to buy insurance or pay a penalty of up to $3,800 a year. In a bid for Republican votes, the Baucus plan does not include a public insurance option, which proponents say would help lower cost. Baucus says he is still committed to providing choice in competition in the insurance market through nonprofit co-ops, if necessary. In Massachusetts, the combination of mandatory insurance and public subsidies has worked, all but about four percent of working age adults in the state now have insurance. But researcher Pryor says for many middle income families affordable coverage is still out of reach.

Ms. PRYOR: If a reform plan is implemented, we need to keep monitoring it to see how the affordability levels are really playing out on the ground. It's not enough to just look at the percentage of people who are uninsured. But once they have coverage, we need to look in an ongoing way at how well that cover is suiting them.

HORSLEY: Pryor says that's a lesson for members of Congress to keep in mind as they consider overhaul in health care nationwide.

Scott Horsley, NPR News, Washington.

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