See end of diary to compute your annual health care liability under the Reform Bills.

Below the fold is important information for understanding the inability of millions of Americans to contribute 39% of their meager income for health care.

As some of you may remember, I have posted this diary several times:

The Math Headache – Americans Can’t Afford Health Care

You will find a great discussion supporting the claim that Americans can’t afford health insurance premiums, which in our crazy American For Profit model is how we get health care. Several doctors contributed great insights with their comments.

Many, many times I have posted polls here asking you how much you can afford to pay each month for premiums.

Time and time again for those polled, the majority response has been $300 or less per month, or about $700 less than the cost of the average policy for a family of four which is $12,000 per year/$1,000/month.

The following is an income/poverty rate/uninsured analysis, based on information from 2007 Census information, reported in August, 2008, or the latest information available.

Since then unemployment has skyrocketed, income has been stagnant or decreased, and household expenses have increased in the form of utilities, taxes, fuel, and food.

For these reasons, the 2007 Census data may be the best case scenario depicting income, poverty rates, and the rates of uninsureds.

So we have the Worst Case Scenario depicting the health condition of the population and the Best Case Scenario regarding income.

For these reasons, any conclusions using this data should provide a reasonably credible analysis.

As many are interested in different aspects of this debate, I provide this information without a particular analysis beyond my conclusion that Americans Can’t Afford Health
Insurance premiums as they presently exist, especially if they fall between the 55-65 age range.

Not unlike the rapid credit card interest rate/fee hikes by the Banks, the health insurance providers have raised their premiums over the last year hugely, probably in anticipation of some legislation.

The Reform Bill may not go into effect until 2013.

What will be the premium rates by then? More unaffordable, in my opinion, even with the Public Option which now looks like yesterdays dream.

I hope you have time to review this data below. It’s a real eye opener on so many levels, not the least of which is the disparity between races and regions.

I was surprised to find that Texas has the highest rate of uninsured (although the Census doesn’t state whether illegal immigrants are counted).

And that the over 33% of the City of Detroit had the highest poverty rate in the country.

Other than Detroit, the highest poverty and uninsured rates are in the Southern region of the USA. Interesting. However, after reading this data, I reflected on who the people were that were screaming and shouting rudely at Town Hall meetings. It wasn’t the minorities.

Although not perfect, this chart can give us some broad indications for the health of the nation’s population as a whole. A worst case scenario, if you will, as health generally decreases with age.

If we can agree on this, please note that the majority of the highest health risk pool, or 72%, have Excellent to Fair Health, (see Fair/poor health bar above, 28%)

If even this worst case scenario is applied to the Risk for Health Insurers, it is easier to understand their huge earnings. And, if so, why do they fight so hard to NOT pay claims?


The real median earnings of men who worked full time, year-round climbed between 2006 and 2007, from $43,460 to $45,113. For women, the corresponding increase was from $33,437 to $35,102. These increases in earnings follow three years of annual decline in real earnings for both men and women.

Median household incomes for 18 states and the District of Columbia were above the U.S. median in 2007, while 29 states were below it the real median incomes.

Poverty Rates

In 2007, the family poverty rate and the number of families in poverty were 9.8 percent and 7.6 million, respectively, both statistically unchanged from 2006. Furthermore, the poverty rate and the number in poverty showed no statistical change between 2006 and 2007 for the different types of families.

Married-couple families had a poverty rate of 4.9 percent (2.8 million), compared with 28.3 percent (4.1 million) for female-householder, no-husband-present families and 13.6 percent (696,000) for those with a male householder and no wife present.

By Race: For Hispanics, 21.5 percent were in poverty in 2007, up from 20.6 percent in 2006. Poverty rates remained statistically unchanged for non-Hispanic whites (8.2 percent), blacks (24.5 percent) and Asians (10.2 percent) in 2007.

Poverty By Region: Among smaller counties — populations between 65,000 and 249,999 Apache County, Ariz. (33.8 percent), St. Landry Parish, La. (32.8 percent), Webb County, Texas (31.1 percent) and Robeson County, N.C. (28.7 percent), while not statistically different from each other, had among the highest poverty rates in the 2007 ACS.

In the 2007 ACS, among large cities (250,000 or more population), Detroit had the highest poverty rate (33.8 percent)

For children younger than 18, the poverty rate increased from 17.4 percent in 2006 to 18.0 percent in 2007.

Regions, Percentage of Uninsureds

At 11.4 percent each, the Northeast and the Midwest had lower uninsured rates in 2007 than the West (16.9 percent) and the South (18.4 percent). The rates declined from 2006 in every region except for the Midwest, where the change was not statistically significant.

Rates for 2005-2007 using a three-year average show that Texas (24.4 percent) had the highest percentage of uninsured.

It was also recently reported that 1,000,000 children are now homeless as well.

Sadly, I have little faith that Congress will do the right thing. Somehow I am convinced that the insurers are about to get a $90 Billion/annum WINDFALL.

This Report gives a great overview of the four Bills in Congress, or a window into the hearts (ahem, choke) and minds (bwhaa) of our Corporaticians. I highly recommend you read it before tonight so you will know what Obama is talking about:
The Congressional Research Service Report:

Here’s the chart depicting The Federal Poverty Level. The Bills determine the portion the FED will pay to the insurers on our behalf based on either 300%(Baucus Bill) or 400%(the other Bills) of these FDL levels. As the majority of Americans fall within the 400% of Federal Poverty Level, I thought you might like to know this info:

The 2009 Poverty Guidelines for the
48 Contiguous States and the District of Columbia

Persons in family Poverty guideline
1 $10,830
2 14,570
3 18,310
4 22,050
5 25,790
6 29,530
7 33,270
8 37,010
For families with more than 8 persons, add $3,740 for each additional person.

And here is what YOU WILL HAVE TO PAY for your mandated premiums if you or your family earns less than 300% or 400% of the Federal Poverty Level, or 3x or 4x the FPL figure in the chart just above here:

Federal poverty
level (FPL) Premium payment limit (as a percent of income)

133% or less 1.5%
150% 3.0%
200% 5.0%
250% 7.0%
300% 9.0%
350% 10.0%
400% 11.0%

For example, a family of three at 133% of the federal poverty line ($24,352 in 2009 annual income) would be required to only pay annual premiums of $365 toward a Basic plan in the Exchange. A family of three at 400% of poverty ($73,240), where the premium subsidies end, would be required to pay no more than $8,056 in annual premiums for a Basic Exchange plan.

Let’s put that into prospective for a family of 4 with two wage earners each earning $15.00 an hour.

$15 x 40 = $600/wk x 2 wage earners = $1,200/week

$1,200/week x 52 weeks = $62,400 a year

Under Baucus Plan this family earns less a little than 300% FDL
3 x $22,050 FDL = $66,150

Their premium will be approximate 10% of income or $6,615 a year, PLUS $10,000 out of pocket. For a total worse case health care expense for a year of $16,615.

Keep in mind that we have to deduct taxes from that $62, 400 gross income. All taxes, SSI, Medicare deductions could equal 30% or $19,845 total tax liability (not including real estate and sales taxes)

$62,400 – $19,845 = $42,500 after tax income

What % of net income is their potential health care liability?

$16,615 divided by $42,500 =

39% of Net Income Potential Health Care Costs/Annum

Keep in mind, if you earn in excess of either 300% or 400% of FDL, you will pay what the insurers quote you and/or your employer. The average policy for a family of four is $12,000+/annum plus you will pay and additional $10,000 ($15,000 under Baucus Bill it is rumored) out of pocket, so your annual worst case scenario in a year would be $22,000, some of which may be paid by your employer (65% of your premiums if your employer falls within the mandated employers guidelines).

Disclaimer: I am not an accountant/tax expert/professional. If you see errors, please help me to correct them. Thank you.

THIS SUCKS! All that money going to the insurers instead of being either disposable capital or money going directly to the people makes me sick.

COPORATICIANS SUCK, TOO! Yes, I am upset. Anytime people suffer I am upset. This is needless suffering. Financial insecurity destroys families. A society without strong families will descend into chaos. Is that what the Corporaticians want? Chaos?

But what do you expect from American Corporaticians who have historically refused to do the right thing. Specifically, it took them nearly 30 years to release American children from the bonds of sweat labor.

Heaven knows, those industrialists needed kids to sweat and die to make their products and the Corporaticians then, as is true now, needed their money and support.