IBJNews

CBO: Health insurance costs to stay high

J.K. Wall
December 2, 2009
Keywords
Back to TopCommentsE-mailPrintBookmark and Share

If Congress passes health reform, more people will become like Juli Erhart-Graves, whose family spends nearly 18 percent of its income on health insurance and out-of-pocket medical costs.

The number of people buying insurance on their own—as Erhart-Graves and her husband do—will more than double by 2016, according to projections by the Congressional Budget Office, as health reform requires all Americans to have health insurance.

Families of four buying coverage on their own—instead of through an employer—will pay 16 percent to 19 percent of their income if they currently make more than $44,000 a year, according to the CBO. That’s about equal to what most people pay now, said Erhart-Graves, who is president of the Indianapolis financial planning firm Worley Erhart-Graves Financial Advisors.

“This is in line with what I see,” she said, speaking of her clients—as well as her own family. She added, “We feel like we’re blessed that we can still afford that. There are so many people out there that can’t spend 18 percent of their income on health insurance and health care.”

Indeed, Republicans have used the CBO report to attack the health reform proposals for failing to achieve President Obama’s goal of reducing costs and making health insurance more affordable.

But that's not entirely true. The Senate health bill would extend subsidies on a sliding income scale to make non-employer health insurance less expensive for low-income families but more expensive for high-income families.

Sugato Chakravarty, who teaches a personal finance course at Purdue University, called the expected outlays "reasonable" for low-income and high-income families.

"It’s the middle income group I worry about," he wrote in an e-mail, referring to families making between $33,000 and $77,000. "A lot of them may not be able to afford 15 percent [and more] on insurance premiums/health care. Uncertainty ahead!"

Families of four making $44,000 or less would pay somewhere between 8 percent and 13 percent of their income on health insurance and health care costs.

That’s a big improvement from the current situation. Families in that income bracket now pay 21 percent to 33 percent of their income on health insurance and medical bills, according to a 2007 study published in the journal Health Affairs.

The Health Affairs study found that families making $66,000 or more now pay 13 percent or less for health insurance and medical bills.

Under the Senate bill, the amount of health coverage would increase compared with that offered by the typical health insurance policies offered outside of employers today.

The vast majority of Americans—more than four out of five—would still buy insurance through their employers, according to the CBO.

Those workers would see their premiums rise by 1 percent to 2 percent under the Senate bill, if they worked for small companies, CBO predicts. Employees of large firms would probably see their premiums decline as much as 3 percent.

ADVERTISEMENT

  • Once again...
    ...the important point missed here is that the rest of the world pays about 50-75% in total $$ for health care and they have better outcomes, lower mortality, higher quality of life, etc. while we still allow the whores in the insurance industry make HUGE profits while deciding who gets medical care, who lives or dies...these folks are the REAL 'Death Panelz' in this country!

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

  2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

  3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

  4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

  5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.

ADVERTISEMENT