Drudge has been pumping up the fact that the Obama administration would not rule out the possibility of raising middle-class taxes to pay for health care legislation. While this is worth highlighting, it shouldn’t distract attention from the fact that the health care bills currently being proposed all include a middle-class tax hike in the form of a mandate requiring that individuals purchase health insurance.
It’s true that current proposals offer subsidies to help people buy insurance, but even the more generous subsidies in the House Democratic health care bill cap off at 400 percent of the federal poverty level, or $43,320 for individuals. Yet if you look at Census data, 8.5 million of the uninsured have incomes of between $50,000 and $74,999, while an additional 9.1 million have household incomes of $75,000 or more. We can’t put a precise number on the full cost of the mandate to the middle class based on these statistics. For instance, Census data refers to “household” income which in some cases could mean individuals but in other cases could mean families, and we don’t know how the uninsured population breaks down within the over $75,000 group (i.e., how many of them have household incomes of between $75,000 to $85,000 vs. how many are above $200,000). But what is pretty obvious is that there will be millions of middle-class Americans who won’t qualify for subsidies, yet will be forced to either buy insurance or pay a fine. While people focus on the penalty aspect of it, if you’re making $45,000 a year and the government begins forcing you to spend thousands of dollars each year for a product, that’s a lot of money, and it’s undeniably a tax on the middle-class.
And there’s also something else insipid about the idea of mandates. While those advocating mandates accuse those Americans who are uninsured by choice as being burdens on the system, there’s a flip side to that. Millions of the uninsured are young and healthy and simply don’t spend enough on medical care each year to justify the annual cost of premiums. If Obama gets his way, they’ll be forced buy something that isn’t a good deal for them so that older and sicker people can obtain more affordable insurance. If liberals want to argue that it’s a moral imperative that government make it affordable for sick Americans to get health insurance, they’ll have to be forced to acknowledge that the cost of doing so will have to be paid by others — and some of that burden will be borne by the middle class.