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Who will get subsidized under the new health care reform?

I think a lot of people are assuming they will get subsidized, but do they really know where the line will be drawn and the extent of the subsidy?

The cutoff level would be an income of four times the federal poverty level. For one person, that?s about $44,000 a year. For a family of four, the comparable figure is about $88,000.

Subsidies would be figured on a sliding scale, with those who make less getting a bigger boost and those nearer the top getting a smaller one.

The formula is pretty complicated. Basically, though, people who make three or four times the poverty level would get enough federal money so that they would not have to pay more than about 10 percent of their income for a decent health insurance package.

So, if you make $88,000 and have a family of 4, you may have to fork out $8,800 a year ($733 a month).

People who make less would have to pay a smaller slice of their income for coverage. For instance, individuals who make about $14,000, and four-person families with incomes of about $29,000, would not have to pay more than 3 to 4 percent of their incomes for insurance.

If you make only $29,000 and have a family of 4, you are already on a terribly tight budget, and yet you will be required, perhaps, to spend $1,160 a year. I'd really like to see a chart that shows how much people are going to need to pay.

The federal subsidy would go straight to the insurer. It would look like a discount on the policy to the customer.

I think there's going to be a sliding scale of freaking out over the new requirements. Just understanding them and absorbing what is required will be stressful. And then you have to come up with the money, or face the penalty:

If you ignore this mandate and don?t get health insurance, you?ll have to pay a tax penalty to the federal government, beginning in 2014. This fine starts fairly small, but by the time it is fully phased in, in 2016, it is substantial.

An insurance-less person would have to pony up whichever is greater: $695 for each uninsured family member, up to a maximum of $2,085; or 2.5 percent of household income.

There are exceptions. Certain people with religious objections would not have to get health insurance. Nor would American Indians, illegal immigrants, or people in prison.

Well, you could always join the right religion.

Sorry, but I can't help thinking that millions of people are going to freak out.

Full post as published by Althouse on March 27, 2010 (boomark / email).