Were you under the impression that ObamaCare was supposed to improve access to health insurance for the poor, a goal that was worth destroying the health insurance industry and ruining medicine for the rest of us? Guess again.
A revealing article by Diana Furchtgott-Roth at RealClearMarkets explains how the bill that wrecked health insurance will “raise the cost of insurance for some low- or middle-income families, or even make it unaffordable entirely.”
In a new National Bureau of Economic Research working paper, Cornell University professor Richard Burkhauser, Indiana University professor Kosali Simon, and Cornell PhD candidate Sean Lyons showed that in 2014, when the law will take full effect, 13 million low-income Americans may be unable to get subsidized health insurance through new state health care exchanges because one family member has employer-provided coverage for that person only.
(Emphasis mine.) ObamaCare is a fantastically complicated bill, passed with a lot of accounting trickery and “fill in the blanks” unwritten clauses, but this part’s actually quite simple.
1. Companies with 50 or more employees must provide Obama-mandated insurance to their employees, or else they pay a fine of $2,000 or $3,000 per year. You probably already knew this part, because a lot of employers have already decided it’s worth paying the damn fine to escape from ObamaCare.
2. By law, this “affordable insurance” must be an individual plan. It can’t cover any dependents.
3. Also by law, employees must accept the individual Obama-mandated plan, if the employer offers one. That’s right: Constitution be damned, you are compelled to accept the plan your employer purchases for you.
4. What about those dependents? Well, they have to buy their own coverage. No worries if the family is impoverished, because Barack Obama is very generous with other people’s money, so their coverage will be heavily taxpayer-subsidized. It’s all so wonderful!
5. Oh, one other little detail: if any member of a family has employer-provided insurance (you know, the policy that only covers you, which you must accept if the employer offers it) nobody else in the family is eligible for an ObamaCare subsidy.
In other words, if one member of a poor family has a job, everyone else in the family gets raked over the coals for health insurance they cannot afford. The only way out of the trap is if the employer’s proffered health insurance is deemed “unaffordable” – the kind of Big Government judgment call that should empower thousands of highly paid, unionized bureaucrats, who will end up scribbling books full of endlessly changing regulations.
The authors of the National Bureau of Economic Research paper figure that a family perched at 133 percent of the poverty level would be expected to fork over 43 percent of their family income for non-subsidized health insurance. Furchtgott-Roth supposes “they would remain uninsured and receive their care from emergency rooms and community centers.”
That’s pretty much what happened before Barack Obama blew the national debt into the stratosphere and implemented the destruction of private health insurance with ObmaCare, so like all of his other initiatives – “stimulus” that reduces GDP, “infrastructure spending” that diverts effort from important local projects to politically useful high-profile boondoggles – the President’s big health-care takeover is worse than useless. The real health care reforms that might actually improve coverage for everyone are impossible in the shadow of this Big Government disaster.
Get a load of the probable “unforeseen consequences” from the combined legislative genius of Barack Obama, Harry Reid, and Nancy Pelosi:
Workers with families will prefer to work for firms that do not offer health insurance. In that way, they can qualify to purchase family coverage through the exchange, and get a subsidy. For a family at 133 percent of the poverty line, premiums will be capped at 2 percent of income.
If the employer does offer health insurance, the worker with dependents might prefer that the coverage is unaffordable, that the employee’s share of the premium exceed the affordability test. That’s not a typo-if the coverage is unaffordable, then the employee will be able to buy subsidized insurance for his family on the exchange.
A firm that offers unaffordable coverage will have to pay a penalty of $3,000 per worker. But workers might prefer to have the employer pay the $3,000 penalty even if some of it reduces an employee’s income, and be able to buy subsidized coverage on the exchange.
ObamaCare will also be the most powerful incentive against marriage since the Left destroyed black families through the Great Society. If poor couples don’t get married, they won’t be at risk of losing their ObamaCare health insurance subsidies because one of them gets a job that includes mandatory individual coverage.
Why on Earth were these bizarre rules written into ObamaCare? Simple: it’s an accounting trick designed to make the bill look cheaper than it really was. It gave the mythical “moderate Democrats” cover to pretend they were “fiscal conservatives” when they voted for the biggest fraud in modern history. Keep that in mind when one of these jokers tries to trick you into thinking he’s concerned about runaway spending and quality health care during his 2012 re-election campaign.
Furchtgott-Roth offers some legislative tweaks to address the insurance subsidy trap, but none of that will be necessary if the United States of America completes its top priority in 2012: Repeal ObamaCare. Nothing else is more important to Americans of every income level right now.