If anyone has seen any other general projections of how it would work for individuals or families, please let me fact check it.
I get a significant number of private emails daily with fears and anxiety about what these bills will do to them. Some people are for it some against it. There seems to be a vacuum of conjecture for what healthcare will look like under this bill. Here is my projection of how it will work for individuals and businesses under HR 3200..
Big picture: Everyone must have health insurance protection. No exceptions.
For the Employer:
Employers must purchase health insurance for employees or pay a FICA type tax. The private marketplace would still exist for a while. A private plan will be the appx. equivalent cost of about $6000 per employee for single coverage from an insurer. The plan, offered by private insurance, expense will be the will be the employers’ burden. The plan will have a set of minimum and maximum criteria of coverage.
Link to bill: (page 146)
Employer will pay 72.5% minimum of plan for singles
Employer will pay 65% of depednents..
Employer will pay percentage of full time hours for part-time EE’s.
- If the employer does not want to buy private insurance they would pay a tax of appx 8% of total payroll or enroll in the Federal system.
As time goes on, the bill provides for employers to have to pay the tax for employees who don’t even elect their plan because they are covered by a spouse or other coverage.
- The government will offer a basic HMO plan with copayments and out of pocket expenses minimum and maximum criteria. It will be much lower cost than private insurance, since it will reimburse providers at much lower levels. Estimated Cost $5000 per person on the plan of which the employer pays their percentage.
- With healthcare being 15% of the GNP, and the FICA type tax being around 8-10%, we believe that most employers will opt for the tax or government plan. As an employer, I surmise I would enroll my employees in the government plan.
If you don’t have employer based government or private healthcare, you will be mandated to enroll in coverage.
Individuals will be offered guarantee issue health plans from the government buying into the Govt. HMO or private health insurers if they exist. (One of the bills says that if your employer doesn’t offer the healthcare package, you will have to enroll in the Government plan) The pricing of the government HMO will be low since the government plan will reimburse providers at a lower level than private insurance. (Please note: For the past two years, several insurance companies have been calling for the elimination of pre-ex clause and underwriting. This must be paired with mandates to participate else people will buy insurance only after a diagnosis of disease)
Individuals must purchase insurance else they pay a tax penalty plus bracket increases in all tax rates. (it is unclear what happens to someone that decides to go down the penalty route) I think it’s fair to believe that you if you try to go stealth and not purchase anything, the penalties will be significant.
Ultimately, you will end up on a government HMO funded by taxes and fees. If we optimistically assume that healthcare costs are reduced by 10%, (Congressional budget office says “no”), you should expect your HMO to cost you 15% of your income. In addition to that you should assume that taxes will take an extra 2-3% of your income off the top to fund coverage for the poor. Those that make in excess of $300,000 annually might end up paying $40,000-$50,000 in additional government controlled healthcare fees. (3% income tax – 8% payroll tax, $12,000 in user fees for a family of four)
As the Government plan takes more “higher priced” payers from the private sector into the public sector, providers will need to drive up the Private sector fees more and more, creating an even wider gap from what the government plan pays and the private plans pay for the same service.
Most Private sector plans, as we know them would quickly disappear because of the inability to compete. If they pay $3 for the same service that the government mandates only a $1 payment, there won’t be enough members to effectively spread out the fixed cost overhead.
The Sale able parts of the bills and things most agree would be good:
- The preexisting condition clauses will go away.
- There will be annual open enrollment periods to pick your plan with no chance of being declined. (this assumes that private insurance could exist in this environment.
- Out of pocket limits on plans offered so that the insurance you have won’t bankrupt you anyway.
The Danger of HR 3200:
It’s not t