Health Reform Better for Poor than Middle Class. How Did We Get Here?

Matt Yglesias notes the Wall Street Journal is reporting that in his big speech to Congress tonight, President Obama will reaffirm his commitment to a public option — a dinky public option. This awesome chart from Nick Beaudrot shows exactly how dinky it is; the pink boxes represent the public option. But it also demonstrates something else about health reform that you won't hear any Democrat say: It does more to help the destitute poor than the working or middle class.

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Even Max Baucus' compromise plan, which contains no new public insurance option, expands Medicaid to all Americans below 133 percent of poverty. Currently, Medicaid is open only to pregnant women, children, single mothers, and the disabled. After reform, healthy, single adults will be eligible. That's a major progressive victory, and it's possible because insurance companies aren't interested in this segment of the population, which can't afford to enter the private market. Government can choose to expand here without undue corporate pressure.

But what's going on in this plan for the working and middle classes? At 300 percent of poverty — $66,150 for a family of four — Baucus requires a family to spend 13 percent of its income on health care before government subsidies kick in. That's a burdensome $8,600. For sure, this is better than said family going completely bankrupt under the current system, should they get into a catastrophic car accident with insurance that caps hospital expenditures. But middle-class Americans — voters! — may not see exactly what is in this plan for them. Politically, this is a very hot potato. There's still time to strengthen protections for the middle class in negotiations between the White House and Congress. But such efforts won't work if the administration is willing to neglect the issue of subsidies in favor of defending the public option.

cross-posted at TAPPED

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