Kevin Drum - February 2013

Conservatives Shocked to Discover Healthcare in America is Really Expensive

| Fri Feb. 1, 2013 8:43 AM PST

"Can you respond to this?" asks a reader via Twitter. "Conservative friends are posting it all over." It turns out that "this" is a headline from CNS:

IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family

Apparently conservatives are outraged by this, but I have one question for them: just how much do you think healthcare coverage costs? Do you have any clue at all?

It turns out that the IRS published some final regs related to Obamacare recently, and in an effort to be helpful they provided some worked-out examples that include some assumptions about how much health coverage is likely to cost for various kinds of families. In one example, they assume that a worker can buy coverage for himself for $5,000 and coverage for his entire family of four for $20,000. They then work out the tax implications of all this.

So is this unusual? Not really. The average cost of healthcare coverage for a family is currently about $16,000, and by 2015 (the base year for the IRS examples) that will probably be around $18,000 or so. And that's for employer-sponsored plans. Individual plans are generally steeper, so $20,000 isn't a bad guess. It might be a little high, but not by much. And the family in question will, of course, be eligible for generous subsidies that bring this cost down substantially, thanks to the Affordable Care Act. They won't actually pay $20,000 per year.

So is this outrageous? An example of Obamacare run amok? Hardly. It's just an example of how damn much healthcare coverage costs in America and why we needed Obamacare in the first place. Apparently a lot of conservatives are shocked when they find this out.