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Janet Bauer of the Oregon Center for Public Policy.
Published: 01 July 2009

History is unfolding before our eyes as Congress overhauls our health care system so that, at long last, it covers all Americans. Maybe.
While there's a good chance that Congress will enact some type of health care reform this year, all will be for naught if the new system leaves the cost of care out of reach for many Americans. If affordability is not adequately addressed, the prognosis for the nation will be poor.
There's no great medical mystery as to why millions of Americans today lack health coverage. They can't afford it.
To address the problem of affordability, Congress is rightly exploring a system that would base the cost of health care on people's ability to pay. Creating a sliding-scale subsidy to help lower-income Americans afford the cost of health insurance is essential.
A sliding scale recognizes the great disparities of income in today's America. Except for the wealthiest of households, American families are finding it increasingly difficult to afford health care. For some, paying for health insurance means not saving for retirement or for their kids' college education. And for others, health care at today's prices is simply out of reach.
The key question in implementing a sliding scale is how to calibrate it. How much should families at different income levels be expected to pay for premiums and other costs of care?
If moderate- and low-income families are asked to pay more than they can afford, the reform effort will fail. We'll be back at square one, with millions of Americans uninsured and the economy still hampered by a costly health care system.
For low-income families, Congress should set the scale at a low enough level so they can still meet other basic needs from their modest paychecks.
And for moderate-income families, the cost of health care should also be much lower than it is today.
To get there, Congress must address the cost of monthly premiums. Right now, for a family of four earning $77,000 without employment-based health care, the typical health care premium in the private insurance market costs over $12,600 a year - about 16 percent of their income. From a practical standpoint, that's unaffordable.
A reasonable amount for such a family to spend on premiums is no more than about 8 percent of their income. That's the level Congress should set for middle-income families.
Securing reasonably priced insurance, however, is only half the cure. Health reform legislation must also limit deductibles and co-payments, which can deter people from getting the care they need. 
And health plans must provide a basic level of comprehensive coverage to ensure true access. Too often people with inadequate coverage find themselves facing exorbitant hospital bills or even bankruptcy when they contract an illness or condition that their insurance doesn't cover.
Just as when you buy a car you know it comes with an engine, four wheels and safety belts, Americans need to know that their health plans come with all the basics. That's something that real health care reform must ensure.
Making health care truly affordable for all may not be politically easy, but failure to do so would be disastrous. Should Congress fail to seize this historic opportunity to enact real reform, the cost of health care will continue to debilitate the health and finances of millions of families and our economy.

Janet Bauer is a policy analyst with the Oregon Center for Public Policy.

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