Under the 1,502-page Baucus bill, everyone will be required to have health insurance and, for most people, the insurance will be very expensive. In 2016, for example, the minimum coverage is projected to cost:
Individual: $5,000 plus $1,700 of potential deductibles and copayments
Family: $14,700 plus $5,100 of potential deductibles and copayments
If you do not get insurance from an employer, you will be required to buy this insurance in an “exchange,” where there will be government subsidies for those who earn between 100% and 400% of the government poverty level. These subsidies can be quite large. For a family earning $30,000 the (premium plus out-of-pocket) subsidy is $17,300 — an amount equal to more than half of the family’s income! At $42,000 income, the subsidy is $14,000. (See the tables below.)
Now here’s the rub. There are 127 million nonelderly Americans living between 100% and 400% of the federal poverty level. Yet the Congressional Budget Office (CBO) projects that only about 17 million will be in the exchange getting these subsidies.
So what happens to everyone else? They will have to bear this cost on their own (through out-of-pocket premiums and reduced wages) without any new help from government.
And what if people don’t buy the insurance they are required to buy? They will pay a (2016) fine of $600 — a tempting alternative considering that if they get sick and really need insurance, insurers will not be allowed to deny them coverage or charge them a higher premium.
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