post by Bill Gardner
Austin Frakt noted today that health coverage cost 30% of the income for the median family of four.
It is informative to make the same comparison for a family at the poverty line. Poverty, for a family of four, is $22,314 total income. This is about 16% of the US, almost 50 million people. From Austin's post, a family of four would pay $19,393 for care from a preferred provider organization (PPO), that is, 87% of their income. You will likely qualify for Medicaid in this situation, so you would not actually be in this market. Poverty in the sense defined by the Affordable Care Act (ACA) is 133% of the poverty line. Then PPO coverage would cost 65% of your income.
What does this exercise show? First, it shows why Medicaid, or some replacement safety net insurance program, is a necessity for the poor. An old friend of mine is an activist for the conservative policy organization ALEC, and during the debate around the ACA she asked, "Why should I have to pay for someone else's health care?" The answer is that the cost of American health care is such that either the rest of us pay for the health care of the poor, or they do not get it.
Moreover, consider that if your family earned just a bit more that the ACA limit, and did not otherwise qualify for Medicaid or receive benefits through your work, it would cost you almost 65% of your family's income to join the PPO. This comparison shows that the poverty line defined by the ACA still leaves families who, if they do not have workplace insurance benefits, cannot afford health insurance. In Canada, we do not have this problem.