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Right Turn
Posted at 11:24 AM ET, 04/16/2012

Obamacare’s anti-market, anti-employer, anti-family impact

I do hope you make it all the way to page A11 of The Post today and then to the 22nd paragraph. It’s worth the trek.

The report concerns a disagreeable aspect (one of many) of Obamacare:

Consumer advocates, physician groups and several Democratic lawmakers are fighting a quiet battle over a key benefit in the health-care law: tax credits to help millions of people purchase insurance.
At issue is a section of the law that outlines when low- and moderate-income employees can opt out of their employer’s coverage and instead get federal subsidies to buy insurance through new state-based marketplaces, called exchanges. . . .
A lot is at stake for employers and taxpayers. For every worker who forgoes “unaffordable” job-based coverage and gets subsidized insurance, the employer would pay either a $3,000 per subsidized-worker penalty or $2,000 per employee, whichever is less. Employers with fewer than 50 workers are exempt.

So get this. If the government can out-subsidize employers, the employee can take the subsidy and thereby inflict a few thousand dollars fine for each employee. So this Ponzi scheme is going to get very expensive if the Supreme Court doesn’t strike the whole thing down: “[T]ax credits are the main way the law is expected to help low- and middle-income Americans buy insurance, if they don’t get affordable employer-based coverage. By 2019, for example, the Congressional Budget Office estimated the government will spend $70 billion in tax credits to help 18 million people purchase coverage through the exchanges, which are supposed to be set up by 2014.”

But there is a catch. It turns out that the credit is not very family friendly. “Consumer advocates oppose the rule because it bases affordability on how much employees would pay to cover themselves, not on the cost of covering their entire family. As a result, they say, many workers will be unable to afford family coverage, yet their spouses and children will be ineligible to get help to buy insurance. An estimated 3.9 million dependents would be affected, according to one estimate.” An example of how it would work: A “worker making $40,000 a year would be ineligible to seek subsidies because the $921 [the cost of an individual health-care plan] is less than 9.5 percent of income, even though the cost of the family plan would exceed that cap. In that case, the worker’s dependents would also be unable to get help.”

And here is where paragraph 22 comes in:

The policy is likely to hit hardest on women, who were nearly 2.5 times as likely as men to be insured as a dependent, according to the National Partnership.
“It will force more people into not having an affordable option,” said Dana Cope, executive director with the State Employees Association of North Carolina.

It’s almost like there is a war on women or something. But let’s not stoop so low as to make this all or only about women. Obamacare may very well be unconstitutional, but (if possible) it makes the health-care insurance market even less functional. The key problem is that there is not a working market in which customers have the incentive and ability to shop for price (like car insurance). By piling subsidy on subsidy and loading employers up with fines, Obamacare makes the problem worse, not better. And along the way, it acts as a disincentive for small businesses to grow (those with less than 50 employees are exempt) and raises the cost of labor for all employers. Call it a war on jobs.

By  |  11:24 AM ET, 04/16/2012

Categories:  2012 campaign, Obamacare

 
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