In business, the saying is customers want products that are fast, cheap and high quality. In a successful company there might be two of those three but there are never three, so the Commonthealth Fund, which basically exists to advocate government health care, claiming 90 percent of American families living above the federal poverty level will be able to afford health insurance under the Affordable Care Act, has to be greeted with the kind of skepticism you would greet any group with blinders on.
The report by Jonathan Gruber and Ian Perry of the Massachusetts Institute of Technology (MIT) claims that new subsidies will make premiums affordable for most families, though they also warn that high out-of-pocket costs will likely mean some families will still be unable to afford health-related expenses. Well, if it requires subsidies it isn't really affordable.
Like the government telling you that suddenly every American will now get a chef, we will not actually get a chef, we will get a McDonald's fry cook and pay higher taxes for them than if we went to a McDonald's, much less a restaurant.
But like any good infomercial, that's not all you get. The Commonwealth Fund claims the whole thing could be even cheaper than they project.
The report, "Will The Affordable Care Act Make Health Insurance Affordable?" used consumer spending data to analyze family budgets across income levels (real date) and compared them to the costs of purchasing health insurance through the health insurance exchanges scheduled to begin in 2014, and typical out-of-pocket health care spending (mythical data, like "jobs saved or created" which claimed a construction worker who was not fired kept his job due to the government) and in that idealized context, because the government has never gone over budget on anything, they claim that the vast majority of American families, even lower-income families, have room in their budgets for premiums and typical out-of-pocket costs. For example, households between 100 percent and 150 percent of the poverty level (up to $33,525 for a family of four) spend 75 percent of resources on necessities—including child care, food, housing, taxes and transportation—leaving most families in that income range able to afford some health-related expenses.
This shows what the Commonwealth Fund actually knows about poor people. Poor families are spending more like 95% of their income on necessities because the Commonwealth Fund never includes taxes, and they are paying taxes. The notion that families just above poverty have 25% of their income for luxuries is silly, unless you count pants and socks as a luxury.
At least they concede some families would still struggle to afford all their health care because of high out-of-pocket costs. 10.8 percent to 17.5 percent of families with incomes between 100 percent and 200 percent of poverty, and about a quarter of families earning between 200 percent and 300 percent of poverty, who have high out-of-pocket costs could not afford all their necessities plus health-related costs. Families with incomes over 500 percent of poverty, or $111,750 for a family of four, have room in their budgets for health care, even with high out-of-pocket costs.
"Our analysis is promising, as the vast majority of people will be better off because of the premium subsidies and cost-sharing limits in the Affordable Care Act," said Jonathan Gruber, professor of economics at MIT and lead report author. "However, the concerns about high out-of-pocket costs are notable and should be addressed so that people who become very sick don't face out-of-pocket costs that they are unable to afford."