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July 31st, 2009
11:54 AM ET

Would health care costs under the public plan be too steep?

By Stephanie Smith
CNN Medical Producer

Three words - health care reform - have transformed the national conversation. And with the vigorous debate elicited by those three words - in Congress, on newscasts, on blogs, in opinion pieces, average Americans are coming out of the woodwork to tell their health-care horror stories.

One of those stories came to our health blog from P.J. May of Ohio, who is the primary caregiver to her 87-year-old mother, who suffers from Alzheimer's disease. A few years ago, before taking on that role, May was working full time, and had what could be considered a decent health-care plan through her employer. However, as her mother's health deteriorated, May made the tough decision to cut her hours to part time to help care for her, and with that she lost her health benefits.

Next, May. did what many in her position would do - she shopped around for private health insurance. She found a plan, but for her budget, the payment was going to be steep. You see, working fewer hours, May brings in only $700 a month, and $213 of that goes toward private health insurance.

May’s situation probably sounds familiar to many Americans who purchase private plans. She's paying an exorbitant amount on premiums, and on top of that, out-of-pocket expenses. In her case, premiums alone constitute about one-third of her income.

She, and many other bloggers, viewers and tweeters writing to us want to know: Will a new public health care plan be affordable for me?

"I don't know if Obama's decisions are going to help me or make it worse," May wrote in an e-mail to CNN.

To find out more about the cost of health care under a public plan, we pored over the 1,000-plus-page health care bill currently in the House with policy expert Kenneth Thorpe of the Rollins School of Public Health at Emory University in Atlanta, Georgia.

Thorpe crunched the numbers, and what he found may not match most people’s idea of “cheap.”

The uninsured, along with small business owners, would get first crack at purchasing a public plan, with the government providing subsidies to reduce costs.

Under the House plan, as it is drafted today, May's entire health care bill would be subsidized by the government. She would not pay a dime out of pocket for health insurance. So, for her, the news is good.

As income creeps above the poverty line, the cost of health care would also creep up, on a sliding scale. So an individual making $21,660 a year, according to Thorpe, would pay $1,083 under the House plan, while an individual making $43,320 would spend $4,704 a year, which is $392 a month.

The same goes for a family of four. At the lower end of the spectrum, a family of four with an income just above the poverty line - $44,100 - pays $2,205 under the current House bill, while a middle class family, making $77,175 a year would pay around $77,15, which is about $650 a month.

Ouch.

A caveat, however, is that those figures include co-pays and out-of-pocket costs.

Still, even considering subsidies, the cost of the public plan is concerning to some legislators. They say that the cost burden on the middle class is too high.

But Thorpe says to keep in mind that on average a family of four today pays around $12,700 a year for health care - more than $1,000 a month.

"[The public plan] sounds expensive, but it's thousands less than what the average family of four pays right now," said Thorpe.

What do you think? Does the public option sound too steep for your budget, or is this alternative better than what you're paying now?

Editor's Note: Medical news is a popular but sensitive subject rooted in science. We receive many comments on this blog each day; not all are posted. Our hope is that much will be learned from the sharing of useful information and personal experiences based on the medical and health topics of the blog. We encourage you to focus your comments on those medical and health topics and we appreciate your input. Thank you for your participation.


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Get a behind-the-scenes look at the latest stories from CNN Chief Medical Correspondent, Dr. Sanjay Gupta, Senior Medical Correspondent Elizabeth Cohen and the CNN Medical Unit producers. They'll share news and views on health and medical trends - info that will help you take better care of yourself and the people you love.

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