Uncloaking the Two Percent

Should the Affordable Care Act be repealed so that over a million people making more than $123,000 per year can avoid paying $3,000 in taxes beginning in 2016?  And should they be allowed to pass on the cost of their health care to everyone else?

This week, a local newspaper quoted a lifelong Florida Democrat as saying she might vote for Mitt Romney because she believed ACA offered “a costly giveaway to freeloaders.”

The irony is that the law actually does just the opposite – and Mitt Romney knows this better than most.  It requires nearly all health care “freeloaders” either to get insurance or pay a tax penalty.

Eighty percent of those affected will get insurance.  But the Congressional Budget Office reported last week that it expects 6 million people to owe the tax penalty beginning in 2014.  The $8 billion the penalty will eventually raise will help defray the cost of uncompensated care.

Six million people make up less than 2% of our total population.  Should the Affordable Care Act be repealed because of them?

Like that Florida Democrat, at least half of us seem to think so.

According to a CNN poll taken just after the June Supreme Court decision upholding the tax penalty, 51% opposed the so-called individual mandate.  According to a Kaiser Family Foundation July tracking poll, 61% opposed collecting the tax penalty.  And according to a Rasmussen poll released this week, 52% still want to repeal the whole Act, largely because of this provision.

Just who are these 2%, for whom our collective hearts bleed?

They are hiding among the 30 million people who will still be uninsured after the Affordable Care Act takes full effect. 

The vast majority of those 30 million are exempt from the mandate, because they are Native Americans, undocumented immigrants, individuals who are so poor that their insurance premiums would exceed 8% of their income, and people who will be granted hardship exemptions.

The remaining 6 million comprise the 2%.  And most are fairly well-off.  In today’s dollars:

• 69% have Adjusted Gross Incomes (AGIs) of at least $46,100 for a family of four, roughly equal to the median household income in America;
• 49% have AGIs of at least $69,150;
• 31% have AGIs of at least $92,200; and
• 20% have AGIs of at least $115,250.

How much will it cost the 6 million to buy health insurance?  Not as much as you might think.

Beginning in 2014, a family with $69,150 in income will get a tax credit of $10,385 if they have to buy their own health insurance, limiting their total net insurance cost to just under $540 per month.

And families with incomes of $46,150 will get tax credits of $14,014.  They’ll pay just $237 per month net for their health insurance.

The 2% is made up almost entirely of these two groups.  The first is people with six figure incomes who can afford to buy insurance.  The second is lower income people who will be offered tax credits so big that their net cost of insurance will be far less than what many people are paying out-of-pocket today.

What these two 2% groups have in common is a sense of entitlement – a belief that if they become seriously ill then the rest of us should pay their health care bills as well as our own.

Or, as Mitt Romney characterized it for Glenn Beck in 2007, they want “free care paid for by you and me.  If that’s not a form of socialism, I don’t know what is.”

Is that fair?

As the Affordable Care Act is written, the free ride ends.  1.2 million wealthier people who today make more than $115,200 per year and choose not to buy health insurance will pay, on average, a tax penalty of around $3,160 per year when the penalty is fully phased-in in 2016 – to help cover health care costs that average more than five times that. 

And the 1.2 million middle-income people making between $46,100 and $69,150 will pay a tax penalty averaging around $583 per year– about the same as what other middle income people will pay for insurance every month or two.

Maybe people who oppose the penalty think it is too small.  I doubt it.

I think they’ve more likely been mesmerized by the wizardry of politicians and pundits, who are using the cloak of repeal to protect an entitled 2% at the expense of everyone else.

Questions or comments?  Post them below, or email gionfriddopaul@gmail.com.

What Polls Say About Our Attitude Toward Health Reform and Mental Illness

What did the politician say after bumping his head while walking along a sidewalk as he waved to his constituents?   “I never look at the poles.”

Whether political leaders admit to looking at the polls or not, when you look beyond the headlines some current polls are saying a lot about how people feel about health and mental health policy issues. 

In the spirit of post-State of the Union bipartisanship, let’s hope that President Obama and Congressional leaders use three recent polls to listen to us about health reform, and to educate us about mental illness.

First, this is what the President and members of Congress will hear if they listen to what people are telling pollsters about the health reform law.

• We like a number of the elements of health reform, and don’t want them repealed.
• We’re not afraid that health reform will affect our existing health coverage.
• We don’t think the current law went too far.

The headlines from three January polls suggest that we remain divided about the reform law, with slightly more opposing it than favoring it. 

A Rasmussen survey found that 53% of voters favor repealing the law and 43% do not.  In the most recent ABC News/Washington Post Poll, 50% said they opposed the health reform law versus 45% who favored it.  An AP-GfK poll found the public evenly split on the new law, with 41% saying they opposed it and 40% saying they favored it. 

But when we listen beyond the headlines, we hear a different voice. 

In the AP-GfK Poll, only 26% supported repealing the law in its entirety.  An earlier Rasmussen poll also found a minority for full repeal of the law – 39%. In the ABC News/Washington Post Poll, 18% said that they favored total repeal. 

Support for full repeal isn't very high, and the reason is that we like many parts of the new law.  In the AP-GfK poll, the public supported by 50%-34% the prohibition on insurers denying coverage based on pre-existing conditions (such as cancer, mental illness, diabetes, and heart disease), and by 59%-34% the prohibition on insurers cancelling coverage because someone becomes sick.

We're also not afraid that the law is going to have an adverse effect on insurance we have and like.  In the Rasmussen poll, only 34% said that they thought the law was likely to force them to change their existing coverage.  

There are also a lot of people who think that the law should go farther.  In the ABC Poll, one in four said that the reason they opposed the law was because it didn’t go far enough.  Over half of those who supported it agreed with them, also favoring a reform law that would go farther than the current one does. 

source: ABC News/Wash Post Poll 1/11

These are a lot of numbers to absorb all at once, but the bottom line is pretty straightforward, and paints a far different picture from the headline.  35% said the law went too far, 19% said it was just right, and a slight plurality – 38% - said it didn’t go far enough. 

Politicians who ignore this message do so at their own peril. 

Second, here is why the President and members of Congress need to provide leadership in educating us about mental illness in the aftermath of the Tucson tragedy.

• We believe erroneously that mental illness causes violence. 

Some people with mental illness commit violent acts, but mental illness is not usually the reason.  One quarter of our population has a diagnosable mental illness each year, and this group is no more likely to be violent than the other three quarters.  Substance abuse (but not substance abuse treatment), juvenile detention, physical abuse, and past history of violence are predictors of future violent behavior, but mental illness is not. 

We need leaders who are willing to speak that truth to us.    

As was noted by researchers at the University of Tulsa in 2008, media reporting on events like the Tucson shooting makes a difference in how people react to the event, contributes to misperceptions about people with mental illness, and deflects attention away from the actual context of violent acts.  

Leaders need to speak up before our responses to violence do more harm than good.

In the ABC News/Washington Post Poll, 83% said that they would support increasing federal funding to add people treated for mental illness to the federal gun registry in an effort to prevent them from buying guns, and 71% said that they would support this for people treated for substance abuse.

source: ABC News/Wash Post Poll 1/11

We are so scared of mental illness that 83% of us would waste precious tax dollars creating a registry that would violate the confidentiality of one quarter of our population while doing nothing to address the real causes of violence in our society.

That’s hard to understand, but I guess we all bump into polls sometimes and come up rubbing our heads.

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