Monday, December 14, 2009

How Much is that Healthcare in the Senate?

I was thinking about the more than $1,000,000,000,000 price tag of the health care bill and started wondering "how much"?* I remember a few years ago I was laid off and had to get my own insurance. I was amazed that it was around $700/month to get COBRA insurance for my family (of 5). That's $8,400/year for 5 people or $1,680/year/person. Looking at what other insurance plans cost, that's exceedingly high, but hey, it's COBRA, it's "temporary" insurance. But it did get me to thinking, how much will the proposed healthcare bill cost to provide insurance per year per person?

We don't have exact numbers, but the figure is "over $1 trillion and rising". I'm going to round it up to $1.2 trillion, assuming it is going to go there (and beyond if past government projects are any indication), just to make the numbers work out evenly. Hey, $100 billion more or less won't change the conclusion (sadly). So, the $1.2 trillion is supposed to cover the plan for 6 years. That's $200 billion/year. If I believe the predictions, it will cover 93% of the population. Currently 46 million people are not covered by insurance, and we have a total population of roughly 300 million. So 7% or 21 million people will still be not covered with this plan in place.

Still with me? Subtracting the 21 million from the 46 million means that the plan will cover 25 million who are not covered now. That means we will be spending $200 billion a year to pay for insurance for 25 million people. If you do the math, we will be paying $8,000/year/person for insurance! According to AHIP the average single member insurance plan cost in the US is $2,600/year/person and Medicare costs $4,000/year/person.

Those are the cold hard facts, but if we are willing to dig a little, it gets worse. According to The U.S. Census, 38% of the uninsured live in households with annual income over $50,000/year. Since the health care plan will require these people to buy their own insurance, we can take them out of the 25 million additional Americans that will be covered by public plans. 38% of 46 million is 17.5 million. So we have 25 million minus 17.5 million or only 7.5 million people who would be getting their insurance paid for by our tax  dollars. That makes the figure per year per person to be $200 billion / 7.5 million or about $26,700/year/person for insurance!

Does this make sense?

* Before you start saying "but the bill is 'funding neutral' because we can save $1,000,000,000,000 from government waste" let me point out that we can and should cut the waste independent of any health insurance bill. Even if we were handed $1,000,000,000,000 gratis by someone, that doesn't mean the healthcare bill doesn't cost that much.


Numbers look pretty solid ... and to make it worse, the insurance "provided" will probably be like "medicare" and woefully inadequate compared to most insurance policies ... I'm nearly 67, and working for, yep, the health insurance. When I finally do fully retire again, it will cost us at least $1000 a month to "wrap-around" for health and medicine insurance ... they should have left it alone.

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