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Wednesday, July 22, 2009

Health Care Reform: Subsidies for Families Below 400% Federal Poverty Level

Between midterm, dissertation, and rounding up hot dogs for the SD Blogosphere Open House (Saturday! do come!), I'm still cruising through H.R. 3200, the House health care reform bill (now watch: knowing my luck, they'll pass the Senate version instead!) looking for goodies.

Today's note: the affordability credits. Section 242 lays out who's eligible for financial assistance to pay for health insurance. The three main standards:
  1. you're buying your own insurance through an eligible provider, not getting it through an employer;
  2. you're not eligible for Medicaid (we've already got you covered if you are); and,
  3. you're making less then 400% of the federal poverty level.
The 2009 federal poverty guidelines look like this:

The 2009 Poverty Guidelines for the
48 Contiguous States and the District of Columbia
Persons in family Poverty guideline400%
1 $10,830$43,320
2 14,570$58,280
3 18,310$73,240
(it'll be a while before
the Heidelbergers make
that much)

4 22,050$88,200
5 25,790$103,160
6 29,530$118,120
7 33,270$133,080
8 37,010$148,010
For families with more than 8 persons, add $3,740 for each additional person.

Section 242 also stipulates that, starting in Year 2 of the program, individuals whose employers offer qualifying plans can get affordability credits if the employee premium exceeds 11% of family income. (Historical note: when I taught at Montrose, the employee premium for family coverage was just about 50% of our family income.)

So just how big will that assistance be? Turn to the table in Section 243, which establishes how much the government would expect folks to be able to pay for health insurance. It's a sliding scale, as you'd expect, limiting the amount you should have pay out of pocket for health insurance to a certain percentage of your family income, from 1.5% for folks closest to the poverty line to 11% for folks at the top of the eligibility range.

As I read it, the table says my family, making somewhere in the mid-$30K range (depending in part on how often you folks hit the Madville Times tip jar—see the left sidebar!), shouldn't have to pay more than 5% of our income for health insurance premiums. Our current premium for really bad high-deductible family coverage on the individual market is currently about 10% of our family income. H.R. 3200 would thus pay for half of our insurance premium, a subsidy of about $1800 a year.

And notice: if you qualify, you get that subsidy whether you buy into the public option, stick with your current private insurance, or switch to a better deal from another qualifying private provider.

I'm still reading the bill, looking for the loophole or trick that makes me change my mind. But the more I read, the more reason I see to tell Stephanie Herseth Sandlin to get off her Blue Dog horse and vote yes.


  1. Some policies have a small lifetime maximum. One million can go quickly. Looks like the house bill does not allow any limitation. Sec 122 a (3).

  2. Section 122(a)(3): there it is! Good eye, John. Universal coverage really should last a lifetime, and this provision is a step in that direction.

  3. I'm not seeing how this bill regulates self-funded plans. Some large employers pay their own claims and just contract an insurance company to administer their plan. They are not subject to HIPPA, but we would want their group plan to be subject to these provisions.


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