This Center on Budget Policies and Priorities (CBPP) report states that the structure of the health insurance premium subsidies provided under the Senate Finance Committee’s version of health care reform would be insufficient for many Americans.  The report notes that, though the subsidies would limit premium expenses for low-income residents based on their income during the first year of implementation, future premium caps would be based on a percentage of the first-year premiums rather than on income.  The CBPP report notes that, because health care premiums have risen significantly faster than incomes, premiums for those receiving the subsidy could easily exceed the original caps.

From the report:

Consider an illustrative family of three in which the father earns $35,000 from a small retailer and the mother earns $11,000 as a part-time sales clerk. Neither receives health care through his or her employer. The couple has a daughter in elementary school. The couple has avoided accruing credit card debt but has no life insurance or retirement savings. After paying basic expenses,4 this family has about $650 a month to cover costs for clothes, car repairs and maintenance, various other household expenses, restaurant meals, and any hobbies or activities — as well as the family’s health care expenses. Under the Finance Committee bill, this family could pay $360 — 55 percent of the remaining monthly amount — to cover the cost of premiums. In comparison, under the Senate HELP bill, this family would pay $214, or 33 percent of its remaining monthly budget, for premiums. Under the House bill, the family would pay monthly premiums of about $305, or 47 percent of its remaining monthly income.

Full report:  Finance Committee Health Reform Bill Makes Improvements but Still Falls Short of What is Needed for Many People to Afford Health Car (PDF | 203.84 KB)

Center on Budget and Policy Priorities. (2009). Finance committee health reform bill makes improvements but still falls short of what is needed for many people to afford health care.  Angeles, January & Solomon, Judith.