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Searching for the cost of health care reform

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You wouldn't buy an auto insurance policy without asking what it cost. But that's what the American public is about to do with health care.

Incredibly, the cost to average Americans of buying soon-to-be mandated health insurance hasn't come up at all. Because much of the public takes the insurance they get through their employer for granted, no one appears to have given it a second thought.

You can keep your health insurance if you like it, the politicians say -- but at what cost? If you get your insurance at work, as 69 percent of Americans under the age of 65 do, ask your human resources director what your policy costs.

The answer will shock you. For a family of three, mine runs nearly $14,000 a year. I pay roughly $4,000 of that out of my paycheck. My employer pays the rest. Most plans for an employee with a family my size cost companies an average of $10,000 to $12,000.

But what if my company dropped me? It's a real possibility. Depending on how the tax and incentive laws are written for companies, 88 million people (according to the Lewin Group) will be dropped by their employer. The Washington Post recently also confirmed that people could be dropped, though exactly how many is unknown because the current bills aren't specific on tax, cost and incentive provisions.

Employers will now choose between paying $5,000 to $12,000 per plan per employee, or $750 a year per employee per year in fines. (Congress will of course be quickly forced to jack up the fine to cover the cost of insuring us all, effectively stealing the money employers used to spend to pay for our plans without most of the public realizing what happened.)

Since employers and company owners will now be paying additional taxes to fund health care on top of the cost of insurance, the current plan structure, which was barely affordable for them before, will become even less so.

So what will individual private insurance plans cost? The final say will come from a health commissioner appointed by the president, the health and human services secretary, and a committee chaired by the secretary. Section 122 (c)(2)(B) of House Bill 3200 says that the annual limit for an individual is $5,000 and for a family of four is $10,000. That's for year one. After that, it's unknown.

So what if your employer dumps you, as the current health bill incentivizes him to do? By law you'll have to be insured. If you want private insurance, you now must buy it yourself. The government will give you a subsidy if you make up to $44,000 for an individual and $88,000 for a couple. (That's about what two teachers make combined, so we aren't talking rich people here, especially if they have to pay the cost of daycare, which runs about $1,000 a month per child).

Middle-class families that get dropped could now find they are on their own with a massive bill, two-thirds of which used to be paid their employer. My husband and I are over the $88,000 threshold, and if my employer dropped us, we'd struggle to afford another $10,000 a year (the difference between the $4,000 we paid through my employer and the total $14,000 bill).

We'd have to quit saving and donating to our 401K, or sell one of the cars and make a lot of other smaller cuts to our budget, like our summer vacation. Clearly we'd be forced to drop our current plan. Even with a $10,000 government exchange insurance plan, we'd struggle to come up with the $6,000 difference.

The other option is joining a public government plan, whatever form that comes in. But at our income level, again, it is unknown what we'd be forced to pay, a decision that would be left to bureaucrats. And forget shopping for a more affordable private plan. With the government dictating, there will only one price based on your income. Go outside the government exchange for a cheaper plan, and the IRS will fine you up to 3 percent of your income. (Incredibly, they call this choice.)

Most of the middle class is blissfully unaware of this frightening unresolved math, or is under the mistaken impression that their bill will be paid by some faceless rich person or through the endless generosity of Uncle Sam.

Depending on how your employer insures, you either get to keep your current plan for five years before you are dumped into the government "exchange" where the above rules apply to you, or you will get dumped into the exchange when your plan changes. (What those "changes" include will largely be defined by bureaucrats later on.) Or you'll get dumped in if your employer drops or fires you.

All this could change this week if Congress scraps the House plan or writes major changes into the Senate plan, which is incomplete. Or maybe President Obama will finally come up with a plan. Whatever the case, I hope other media outlets will ask what this will cost the average middle-class family before it's too late.

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