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It goes without saying that I’ve started to clash with a couple of the writers at FireDogLake. But there are a couple of people I really like over there. One of them is Spencer Ackerman, whose terrific piece on Al Qaeda you should read. Another is Marcy Wheeler, a fellow Michigander, who has this piece placing into context the cost of health insurance under the Senate’s bill for a family of four making $66,000 (301% of poverty).

I like Marcy’s analysis, among other reasons, because it’s data and fact-driven. Nevertheless, it’s painting an incomplete picture — and somewhat missing the forest for the trees.

First of all, several of of Marcy’s cost estimates are on the high side. In particular:

– Spending 30% of income on one’s rent/mortage as Marcy’s assumes — that’s $19,275 per year or $1,600 per month — is an aggressive assumption. The Department of Commerce estimates that people in this income bracket spend more like $10,000 per year on shelter, before utilities (which Marcy breaks out separately). In most parts of the country, $1,600 per month is going to buy you a very nice home, even if you have two rugrats to worry about.

– The transporation figure — $13,200 — may also be aggressive. The Commerce Department puts the average fully-loaded cost of transportation for this income tier at $9,359. I don’t doubt that if the family did need two cars and both parents lived fairly far from work, the cost could meet or exceed Marcy’s number — but not all families will fall into this category.

– I don’t know whether the cost of daycare, which Marcy estimates at $6,216 per year, is high — but not all families will have a pre-school aged child. The typical child spends 3-4 years in pre-school, but then 12-13 years in the public school system.

– The taxes are probably high, because of the various tax credits that would be available to this family. Firstly, this family should be able to take advantage of the Child Tax Credit at $1,000 per child. Secondly, there’s a separate tax credit for child care that is worth 20% of day care expenses. Thirdly, depending on various factors, their health care costs should be tax deductible. And fourthly, if they own rather than rent their home, some of their mortgage costs will be tax deductable.

As Marcy points out, her assumptions may be favorable to this family in other ways — her family doesn’t have any debt, for example. Nor do I doubt that there are some families who would fit Marcy’s template almost perfectly (although they should still be able to take advantage of the significant tax breaks that Marcy hasn’t accounted for). But in general, this is significantly more than most two-child families will be spending on these services — probably by a margin of $10,000 or so.

Nevertheless, that’s not really the most important point. Rather, what is this family spending on health care now? If they’re buying insurance on the individual market, they’re probably paying something like $12,000 per year for their premiums — and paying it for worse insurance than they’d get under the Senate’s bill. So for these families, the $6,000 or $7,000 per year that the Senate’s bill would save them is money to spend toward a bigger home, toward paying off debt, toward enrolling their children in day care, toward letting one of the parents stay home with a young child, toward entertainment, vacations or meals out.

And if the family isn’t buying insurance, their health care costs certainly shouldn’t be figured as zero. Even in a “good” year, more often than not there will be the need for the occasional doctor’s or emegency room visit, medications, and so forth — few families of four make it the whole year without any medical problems. Without insurance, it’s easy to imagine these costs adding up into the low four figures.

And what about when the family has a more serious medical complication? They’re totally and completely screwed. They’ll either have to forgo care, radically cut their standard of living, or endure a bankruptcy.

Marcy is basically treating the $5,243 per year as though it’s a tax hike. That’s not what it is — at all. It’s a deeply discounted — albeit mandatory — service that they’re purchasing. And it’s saving them a lot of money: it either saves them a lot of money every year if they’re already buying insurance, or a lot of money on average if they’re not buying insurance.

And in either case, because of the caps in out-of-pocket expenditures — it also provides them with a lot more certainty in forecasting their income stream. It allows them to come up with a reasonable gameplan.

Frankly, unless they’re living in New York or the San Francisco Bay or some other place where the cost of housing is very high, the family that Marcy draws from — one which pays $1,600 per month for rent but does not buy health insurance for themselves or for their children — does not have a reasonable and responsible gameplan to begin with. If they can’t figure out how to squeeze out $430 per month in insurance premiums, what are they supposed to do in the status quo when somebody actually gets sick? You can object to the Senate’s health care bill on libertarian/paternalism grounds, but it will leave the overwhelming majority of low- and middle-income families better off.

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