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Still Too Young for Medicare (not verified) says:
What does the much-vaunted "specificity" of Senator Clinton's suggested cap really mean? This cap is a measure that's both too specific and not specific enough.
It's too specific in the sense of being a "one-size-fits-all" measurement that would be highly unfair if applied across the board to everyone who does not qualify for subsidies. Should Citizen A, who is making just barely enough not to qualify for subsidies -- and who perhaps has gone without health insurance for years because she couldn't afford it -- have to pay the same percentage of income as Citizen B, whose income is significantly higher and who has already been paying 10% of his income for premiums without feeling too much pain? Such a policy would not benefit people who are struggling to reach, or remain in, the middle class.
On the other hand, the cap is not specific enough in that a cap based on percentage of income doesn't mean much if "income" isn't defined. Does Senator Clinton mean before-tax or after-tax income? If she's talking about before-tax income, her measurement would not be fair to people in high-tax states like New York.
What's more, a cap based on income alone doesn't take assets into account. Like many people I know, over the past few years I've been forced through unemployment and underemployment to cover health care premiums and other expenses by liquidating assets. Some of us have relied on IRA withdrawals, others on home equity loans, still others on both IRA withdrawals and home equity loans. And people I know without assets have lived on credit cards. So far, I've managed to keep paying my health care premiums, but some people I know have had to drop their health care coverage because their assets were dwindling -- or their debts were mounting -- at a frightening pace. Certainly it would only be fair in a government-sponsored program to consider assets in setting premiums -- otherwise, the program could end up benefiting wealthy people with substantial assets but little or even no income. But at what point should people be required to tap into their assets? Someone who will be collecting a generous pension as well as Social Security within a few years might be able to afford to tap into a $250,000 IRA, but someone who isn't slated to receive a pension and whose Social Security benefit is based on fewer years in the workforce (as is the case with many women) could endanger her financial security if she tapped into an IRA of the same size. Yet asset tests are very difficult to devise and administer -- witness the ongoing controversy over asset tests in the Medicaid program.
I've never been convinced of the wisdom of mandating everyone who doesn't qualify for subsidies to pay for premiums, and Senator Clinton's latest embellishnment of her health care plan hasn't changed my mind.
What does the much-vaunted "specificity" of Senator Clinton's suggested cap really mean? This cap is a measure that's both too specific and not specific enough.
It's too specific in the sense of being a "one-size-fits-all" measurement that would be highly unfair if applied across the board to everyone who does not qualify for subsidies. Should Citizen A, who is making just barely enough not to qualify for subsidies -- and who perhaps has gone without health insurance for years because she couldn't afford it -- have to pay the same percentage of income as Citizen B, whose income is significantly higher and who has already been paying 10% of his income for premiums without feeling too much pain? Such a policy would not benefit people who are struggling to reach, or remain in, the middle class.
On the other hand, the cap is not specific enough in that a cap based on percentage of income doesn't mean much if "income" isn't defined. Does Senator Clinton mean before-tax or after-tax income? If she's talking about before-tax income, her measurement would not be fair to people in high-tax states like New York.
What's more, a cap based on income alone doesn't take assets into account. Like many people I know, over the past few years I've been forced through unemployment and underemployment to cover health care premiums and other expenses by liquidating assets. Some of us have relied on IRA withdrawals, others on home equity loans, still others on both IRA withdrawals and home equity loans. And people I know without assets have lived on credit cards. So far, I've managed to keep paying my health care premiums, but some people I know have had to drop their health care coverage because their assets were dwindling -- or their debts were mounting -- at a frightening pace. Certainly it would only be fair in a government-sponsored program to consider assets in setting premiums -- otherwise, the program could end up benefiting wealthy people with substantial assets but little or even no income. But at what point should people be required to tap into their assets? Someone who will be collecting a generous pension as well as Social Security within a few years might be able to afford to tap into a $250,000 IRA, but someone who isn't slated to receive a pension and whose Social Security benefit is based on fewer years in the workforce (as is the case with many women) could endanger her financial security if she tapped into an IRA of the same size. Yet asset tests are very difficult to devise and administer -- witness the ongoing controversy over asset tests in the Medicaid program.
I've never been convinced of the wisdom of mandating everyone who doesn't qualify for subsidies to pay for premiums, and Senator Clinton's latest embellishnment of her health care plan hasn't changed my mind.