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The $2,500 question

There’s some peculiar numerology going in the presidential candidates’ health reform plans.Stoltz
John McCain proposes that every American receive a $2,500 tax credit ($5,000 for families) to help them afford health insurance bought in the private market.Barack Obama says his health care plan will save the average American family $2,500 per year.I mean, what are the chances?I suspect both campaigns are shrewd enough to know that "a couple hundred bucks a month" [middle-class citizen’s translation of $2,500 per year] is likely to get a voter’s attention. The fact that both campaigns came up with an identical figure is eerie, however. It’s enough to make you wonder whether anti-trust laws should apply to political campaigns.

To be plain, there is no good reason to believe these campaign promises more than others, despite the precision of the dollar amount cited.

Obama’s $2.5k promise was recently picked apart by the New York Times.

Reported the Times:

"Even if the next president and Congress can muster the political will, analysts question whether significant savings would materialize in as little as four years, or even in 10. But as Mr. Obama confronts an electorate that is deeply unsettled by escalating health costs, he is offering a precise "chicken in every pot" guarantee based on numbers that are largely unknowable. Furthermore, it is not completely clear what he is promising."

Meanwhile, McCain’s $2,500 per person tax credit doesn’t look like much when you consider the cost of health insurance purchased in the open market. Currently employers and workers together pay about $4,400 per person for insurance premiums, about $12,000 for families.

Individual policies–which McCain’s policies are designed to encourage, perhaps at the expense of employer-supported plans–often cost more. They certainly cost more for people who have one or more chronic conditions like asthma, diabetes, heart disease, high blood pressure, osteoporosis, depression or arthritis–which is to say, a vast majority of the adult population.

That couple hundred bucks a month you just pocketed from President McCain? You’ve got to spend that, and add a couple hundred more–and maybe a couple hundred more than that–just to pay for your premiums in the open market.

So what are we to make of this? What’s so magic about the number $2,500? Why would this figure stand out in the heads of political operatives trying to craft policies to appeal to supporters?

Hard to tell. But I got to wondering. Let me check a figure here at the Federal Elections Commission website a second. . .there it is! I thought this all seemed familiar.

The most money an individual can give to a presidential candidate to show their commitment is. . .$2,300. Five thousand if you’re a PAC.

I mean, what are the chances?

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7 replies »

  1. Is everybody blind? Can’t you see what the government wants? If McCain or Obama succeeds in eliminating self insured companies from covering their employees and forcing people to lose coverage there will be only one effect. The BabyBoomers will die off at a much, much higher rate. Congress solves all its problems. Social Security gets more solvent. Insurance companies have less payouts. And most of us, well, get dead.

  2. The health care industry is considered an industry or profession which includes peoples’ exercise of skill or judgment or the providing of a service related to the preservation or improvement of the health of individuals or the treatment or care of individuals who are injured, sick, disabled, or infirm. The delivery of modern health care depends on an expanding group of trained professionals coming together as an interdisciplinary team.
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    Roopa
    Trivia Game Challenge

  3. 1. Many of the people who cannot afford insurance are also denied insurance because of existing medical conditions.
    2. Many people with insurance are denied insurance coverage for specific medical needs. This is where the insurance companies make their profit. Insuring everyone does not eliminate this problem, it only adds to the profit for the insurance companies.

  4. Craig, I think you have something, especially when these $2500 payments go to everyone, rich and middle income. Does anyone believe the wealthy need the $2500 for healthcare? I believe also the push for outside contractors (especially with the Bush Regime) over government departments direct handling is also to turn tax dollars into campaign donations. How else has election spending been able to rise so quickly and so far. There has never really been an analysis to show if these contractors ARE giving us value for money spent. And of course the taxpayer also gets little to no oversight for his dollars spent – read license to loot.
    Here’s another coincidence? Why is it that the present financial mess(es) occured shorly after 2007 Christmas? This has been boiling at the surface since 2006 but never hit the public airwaves much. My neighbor who invests through an insider bank broker was told in early October that she had to have ALL her stock investments out of the market by November 07. Seems the blind sheep on the street were kept in the dark (thanks to our illustrious 4th Estate) to make sure they spent their max at Christmas and to make sure insiders got a chance to pull their investments first when there was still money on the table. Do you also think there was a sudden oil crisis in January 08 and not in December 07? Where did all that oil go!? The timing also is perfect for Wall Street bailouts and risk socialization since it’s an election year. What better way to get the governement to fork over billions to cover your lost profits when the pressure from voters is at it’s greatest. This also gives cover for politicians to justify the largess. Conspiracy theories anyone?
    Frankly I’m less than impressed with Obama, but given the alternative we can’t afford to give the White House to another Republican who will still lead us down the path of failed policy. Obama may be trying to be too smart in carving out the muddled middle as he risks loosing his own crown as the agent of change. He’ll need those young voters he covets but risks loosing them if they see him as just another polititical message twister.

  5. Since when can someone (outside of Massachusetts I guess) with a simple medical problem, much less a chronic condition, get insurance in the private market? Hasn’t worked too well for my family, and the high risk pools are a joke (premiums, deductibles, and lifetime max are all absurd).

  6. Yes, what is up with this figure? Regardless of whether they agreed to share that number or happened upon it coincidentally, it is in an interesting figure for the public.
    These numbers play on the well-known concept of price illusion. Most people are aware of what they spend on health care, but not as aware of what the total costs are. If individuals are contributing $500-700 to their insurance plans, $2500 seems like a windfall at 4-5x of what they are currently paying. As you point out, this is not the true cost. But from a marketing standpoint, it is a brilliant move on their part as there a lot of people who are not paying close attention.

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