2013
A quote from a recent WSJ article about potential entrepreneurs who will be free to head out on their own because of Obamacare:
Laura Stoll is among those who dream of living the entrepreneurial life—if robust, affordable coverage becomes available.
ROBUST? AFFORDABLE?
Let’s try this again, the more “robust” the insurance … presumable meaning low out of pocket costs … the less affordable the insurance, meaning your premiums will be higher because there is a greater potential the insurance company will be required to pay more in claims.
Even if coverage is obtained through a new exchange and premiums are offset by tax credits, does that make insurance affordable? Not necessarily; just because both the government and the individual are paying the cost does not mean insurance is automatically affordable in total.
A lot of people, including insurance companies, are working hard to make health care and hence health insurance more affordable, but we have a long way to go because first we must solve the many problems facing the delivery of health care in America.
What is your view, how do you define “affordable” health insurance?
QUINNSCOMMENTARY 
Well, most people would not accept the government’s definition of “affordable” as PPACA will apply to employees – 9.5% of wages, for single coverage, plus up to 100% of the cost for any dependent enrolled. Similarly, it is deemed to be “not affordable” where there is a 10% or more increase in costs. Where does this come from? Apparently, someone arbitrarily decided health costs should not exceed 10% of wages.
Well, let me put my economist hat on for a minute (BBA, Business Economics). GDP or gross domestic product, can be determined at least two ways (I think three). I like the income approach. Here are the Income Components for GDP:
Employee Compensation
Net Interest (I)
Rental Income (R)
Corporate & Self-Employed Proprietor Profits (P)
Net Income from Foreigners (FI)
Depreciation (D)
Indirect Business Taxes (IBT)
GDP = W + R + I + P + FI + D + IBT
Recently, 55% of GDP has been wages. So, GDP = GDP is 182% of wages.
We also know that health care costs in America are approximately 17% of GDP. So, given the math, we know that health care costs in America are approximately 31% of wages. Do you see a 17% of income deduction from your paycheck? Do you see a 31% deduction on your paycheck? No, the only 30% deduction on your check is likely to be … taxes. So, who decided 10% was the threshold? And, of course, taxpayers (and deficits) fund the difference…
So, until we are willing to do as individuals what we already do as a society, we won’t solve the challenge … So long as someone else pays the cost (or, if I’m paying the cost, so long as we can’t identify the pricetag), we’ll be most likely to continue the status quo.
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