Health Care Penalty

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LOU DOBBS, HOST: As promised Senator Max Baucus released his controversial health care proposal. It is the last of five to emerge from Congress and like each of them the senator’s $856 billion proposal would require every American to have health insurance or face thousands of dollars in fines for not doing so. President Obama, in fact, supports that requirement and the Baucus proposal, but that doesn’t square with what candidate Obama had to say on the campaign trail last year. Lisa Sylvester has our report.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The health care bill proposals on Capitol Hill all require that every American have health insurance and without it you could face tough fines. In the proposal by Senator Max Baucus those penalties could be as high as $3,800 a year. And families on modest incomes might need to devote a fifth of their income to health insurance to avoid a fine.

CARMEN BALBER, CONSUMER WATCHDOG: His plan has suggested that Americans could be required to spend 20 percent, nearly 20 percent of their income on health insurance. That’s simply unaffordable for a family who’s around 400 percent of the poverty line struggling to pay their bills let alone pay for health insurance.

SYLVESTER: The issue of affordability was one then Senator Obama brought on the campaign trail and in these flyers criticizing Senator Hillary Clinton’s call for mandated health insurance. Mr. Obama pointing to the experience of Massachusetts called the fines a stiff penalty.

OBAMA: Now they’re worse off than they were. They don’t have health insurance and they’re paying a fine.

SYLVESTER: Now President Obama has embraced the idea of mandatory insurance and the threat of fines. Why? To bring down the cost of universal health care requires having not just older and sicker people in the insurance pool but spreading the risk. This according to Families USA which supports a health care overhaul.

RON POLLACK, FAMILIES USA: The costs for people depend on who’s in the insurance pool. If the insurance pool is only made up of older, sicker people, then the premiums are going to skyrocket.

SYLVESTER: The Congressional bills offer subsidies to low income people to help them pay for health insurance. But getting coverage is still going to take a huge chunk out of the average family’s paycheck. Based on analysis of Congressional Budget Office projections, a family of four making $42,000 a year and receiving subsidies will still have to shell out about $6,000 a year of their income. A family earning $54,000 a year could see 18 percent of their income going towards mandatory health insurance.

NIA-MALIKA HENDERSON, POLITICO: (INAUDIBLE) any idea of the individual mandate is really going to rub a lot of people the wrong way. It’s really going to feed into this idea that the government is really kind of taking over health care essentially.


SYLVESTER: And Senator Baucus in a news conference, you know, he acknowledge that his bill is not exactly perfect but the reason why he did this is that he wanted to limit the overall price tag on his legislation. Lou?

DOBBS: Well, not perfect. I mean, this is a situation in which the president who supports this legislation absolutely bought into after he criticized on the campaign trail Senator John McCain’s proposal to tax health care benefits. Now he is making a centerpiece of the Hillary Clinton mandatory requirement for health care and fines up to $3,800 per family. I mean this is — this is breathtaking, is it not?

SYLVESTER: It is. And you know any time that you tell someone you have to buy, in this case insurance, you’re going to get some pushback. This is one of the reasons why people are you know saying essentially this is big government at work here (INAUDIBLE) telling citizens what they have to buy and penalizing them if they don’t follow through with that.

DOBBS: Yeah, it’s sort of interesting that there could be any doubt about the fact that the government legislating over a sixth of the economy would not be effectively taking over, but that debate of course is wide open and raging. Thanks very much, Lisa Sylvester.

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