Pelosi’s Poison Pill: H.R. 3962

by Mike

Today House Democrats unveiled there own 1,990 page version of health care reform with a price of $894 billion. Six billion dollars under the cap set out by President Obama at $900 billion.

According to the Democrat analysis, the bill will save $30 billion in the first 10 years. This is largely due to “scaled back subsidies.”

WSJ- A family making between 350% and 400% of the federal poverty level would be expected to spend as much as 12% of its income on health coverage before subsidies are available. For poorer families, that percentage starts at 1.5% and rises with income.

The poverty level for a family of four in the United States is considered to be $22,050 for 2009. Anyone making with a family of four making $77,175–350% above the poverty line–would have to expend 12% of their annual salary, or $9,261 per year before any government subsidy would be allocated. In order to receive any assistance from the government a family would have to increase their annual premium payment by 3 times.

Insurance expenditures for a family with employer-provided insurance family plan currently costs $13,375, with the employee paying $3,515. This means employers are currently picking up about 74-75% of the cost for premiums for a family plan. Conversely the Pelosi plan would only require them picking up approximately 65% or face an excise tax.

The Foundry-Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).

In effect, the Pelosi Plan will legally require the amount of the premium being covered by employers to be lowered and pass the other 9% or so onto the employee.

Democratic Ingeniousness

Not moments after I started researching this current topic Rep. John Dingell (D-Mich) released an op-ed characterizing skewed numbers as a veritable absolute. Nonetheless, they are nothing more than an oversimplification which, as most political talking points do, overlook specifics.

But the facts scream louder than even the angriest protester – and the data tells us the current system could literally destroy our way of life. Consider these statistics:

  • The top ten health insurance companies made $8.2755 billion last year and they stand to make more when medical costs go up.
  • The average annual premium for employer-sponsored health insurance is $13,375 for family coverage.
  • Approximately 45,000 people die each year because they lack health insurance.

As pointed out above in this post, the employee pays $3,515 out of the $13,375 premium. The employer picks up the rest of the required payment. Interesting that Rep. Dingell, in typical Washington reprobate fashion, makes no mention of this.

Medicare Expansion, Debt Expansion

Time, and time, and time again we have wondered, “Why would an sane person try and expand on a system that is already broken almost beyond repair?” The key word here is sane, something which our officials are obviously not.

WSJ-The bill expands eligibility for the Medicaid program to those making as much as 150% of the poverty level, or $33,075 for a family of four under current guidelines.

By increasing the rolls of Medicare in such a cumbersome fashion you not only increase the amount of outlays by the federal government, you create more pressure on state governments as well. Due to their already fragile fiscal state this will only complicate matters further.

Take California for instance. (This article was written when the proposal was raising the medicare eligibility to 133% above the poverty line.)

Mercury NewsWith about 6.8 million enrollees, Medi-Cal is the nation’s largest Medicaid program. Its costs are split roughly 50-50 between the state and the federal government. The state is slated to spend $10.9 billion on the program this year, more than the entire corrections budget, making it one of the biggest line items in the state’s $85 billion general fund budget.

Health reform plans pending in the Senate and House both would greatly expand Medicaid by allowing anyone who makes less than $14,400 a year — or 133 percent of the federal poverty line — to sign up. Currently the threshold is $10,830. The governor’s staff estimates that Medi-Cal rolls could jump by 1.6 million as a result; nationwide, 11 million new people are expected to sign up for Medicaid if either of the Democratic proposals becomes law, according to the nonpartisan Congressional Budget Office.

How big a stress that would put on state coffers is being hotly debated in Congress. State officials estimated that one early proposal could foist as much as $8 billion a year in new costs on California, although they now call that a worst-case scenario.

Not much to “hope” for in H.R. 3962, there hasn’t been much “change” from the past proposals. All our clever Democrats in Congress have done is change a few names–consumer option instead of public option–and piled on more budgetary gimmicks. In the Progressive rush to obtain votes from “Moderate Democrats” and quell their debt concerns, which hasn’t been accomplished, they have chosen to do nothing about the rising cost of health care. Only to add their poison pill to it.

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About Mike Elliot

Works in Construction Engineering and Project Management. Mike has been employed by the federal government and worked extensively within the private sector as well. His interests include public policy, economics, politics, foreign policy, philosophy and other assorted mind-numbing practices. Mike can be contacted, complimented, or criticized at He is also available for speaking engagements and prefers to be paid in gum.
This entry was posted in American Politics, American Society, Economics, Essays and tagged , , , , . Bookmark the permalink.

5 Responses to Pelosi’s Poison Pill: H.R. 3962

  1. Daniel S says:

    I can’t wait to see how this pile unloads and gets dissected. Pelosi is bad enough, and for her to come out for this is equally, if not worse, than she is.

  2. Jason says:

    Mike you really hammer out the goods on this sort of stuff. Great post, man.

  3. Strum H says:

    And she did this in 2,000 pages or less. That is efficiency.

  4. Mike says:

    Dan-Hey, Bud. No one around here will disagree with your assessment of Madame Screecher.

    Jason-Ugh…health care…I can’t help myself.

    Strum-We have been missing Red Spy for our daily dose of hilarious comedy. The dude is clever. However, you seem to be filling the bill until his return. Maybe we can talk about a dual contract for you two, lol.

    Thanks for making me chuckle again.

  5. Pingback: Ten Facts About The Pelosi Bill | The Stafford Voice

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