News & Media

Senate Finance Proposal Must Do More to Protect Lower-Income Families

PICO National Network

September 21, 2009

It is by now widely recognized that the Senate Finance Committee proposal must do more to protect working families from high premiums and out-of-pocket costs in order to make an individual mandate practical. As a result, Finance Committee Members have offered many amendments to make coverage more affordable for working families. 

Senators understand that voters are deeply concerned about the rising cost of health coverage and that getting the details of affordability right is essential to the success of health reform.  It is important to emphasize that the subsidy structure must be improved for all income levels, including lower-income families earning between 100-300 percent of poverty. Improving affordability means reducing premiums and lowering out-of-pocket costs for hard-working families.

Affordability is important for successfully delivering health reform to American families

  • The President has said that in America no family should go broke because they get sick, yet that is what could happen to many families if stronger limits are not placed on out-of-pocket costs.
  • If people are required to purchase health insurance, Congress must make certain that premiums and out-of-pocket costs are truly affordable.
  • If insurance costs too much, many people will be penalized without actually being covered, undermining the goal of extending quality affordable coverage to all families.
  • Though everyone should contribute to their health coverage, we should do as much as possible to protect lower-income families who are already underwater financially and least able to bear the brunt of an individual mandate.
  • No one should have to rely on a payday lender, not buy food for their family or miss a rent check in order to meet their required monthly premiums.

Under the Senate Finance Chairman's Mark, low-income people could face an unmanageable burden in the event of a serious or chronic illness

  • A family of 4 with an income at 200% FPL ($44,100) could have to pay as much as 21% of their income in premiums and out-of-pocket costs, if they face a serious illness. (See attached table)
  • An informal survey in our congregations and communities this past summer found that uninsured families earning about 200% FPL only have about 5% of their income available for health spending.
  • A report by the non-partisan Commonwealth Fund found that low-income households (income below 200% FPL) who had to spend more than 5% of their income on out-of-pocket expenses could be considered under-insured and experienced many of the same problems as the uninsured accessing medical care and paying for other life necessities.

Affordability is important for building public support to pass and sustain health reform

  • Voters are focused on the rising cost of health coverage.  They will support reform it they believe it makes coverage for their own families and loved-ones more affordable and secure.
  • Voters will accept an individual responsibility to purchase insurance if they believe that the cost and quality of the coverage is reasonable.
  • Congress must make sure that the very people who are supposed to benefit from reform do not conclude that they are being required to buy insurance that costs too much and covers too little.
  • Public support hinges on getting affordability right across the board.  More than 7 out of 10 people who lack health coverage live in families that earn less than $50,000.
  • Politically, it is important that the very people who are supposed to benefit from reform do not conclude that they are being required to buy insurance that costs too much and covers too little. 

Affordability is important for making the health care system work properly

  • Helping people get the care they need when they need it is a cornerstone of controlling overall health costs.
  • Health reform would fail if it required people to buy coverage that still left them unable to afford to go to the doctor when they get sick or take the medicines they need to get better.
  • Health reform hinges on affordability because insurance market reforms, an individual requirement to purchase coverage, and adequate subsidies all depend on one-another. If premiums and out-of-pocket costs are set too high, comprehensive reform will unravel.

 Lower-income families are the least able to bear the brunt of the individual mandate. That is why it is important to reduce premiums and cost-sharing for all families, beginning with those at 100 percent of poverty and working upward, in the modified Senate Finance Mark.

  For more information contact Michael Miller at MichaelM@communitycatalyst.org or Gordon Whitman at gwhitman@piconetwork.org.

Comparison of House and
Senate Finance on Affordability

An example


A family of 4 earning about 200% poverty ($44,100)

House Bill

Senate Finance Framework

Percent of income for premiums

5% of income

($2,205 per year)

8% of income

($3,528 per year)

Out of pocket costs

10% of income


13% of income