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Senior Advisor

Obama care reality




Like a hiker who has overlooked several "Danger: cliff ahead" signs, the  Obama administration stepped back suddenly last week, delaying the individual  mandate for those with canceled policies.

The reversal came in response to complaints from middle-class shoppers on the  ObamaCare exchanges who have found themselves on the wrong side of the law's  subsidy cliff.

For those earning more than 400% of the poverty level — about $62,000 for  two-adult households — ObamaCare provides no premium subsidies.

This is no minor issue. A primary rationale of ObamaCare's insurance reforms  limiting age-rating and precluding pricing based on health status has been to  ensure that people will be able to afford health coverage when they need it  most.

Yet, it's hard to argue that the law measures up for those whose earnings put ObamaCare subsidies just out of reach. An IBD analysis finds  that middle-class households in their late 50s and early 60s could spend 25% or  more of their income on health care — before their deductible is exhausted and  ObamaCare's benefits kick in.

Covered California's shop-and-compare tool shows that a 58-year-old couple in  Los Angeles County with $65,000 in income buying a bronze plan would have to  spend $19,400, including $9,400 in premiums and a $10,000 deductible.

Individuals can deduct medical expenses above 10% of income. Even so, the  couple could still face a health care bill equal to 25% of income, before any  benefits.

Employer Care Cheaper

The problem isn't simply that health insurance is expensive, but that  middle-class households buying insurance via the ObamaCare exchanges will be  treated poorly relative to those covered by employer plans.

Employer-sponsored insurance premiums are fully excluded from taxable income.  Further, employer coverage tends to come with lower deductibles and without  age-rating, meaning premiums don't rise with age.

ObamaCare's measure of income does exclude contributions to a retirement  plan.

Still, for some solidly middle-class households in their 50s and early 60s,  ObamaCare will mean either paying more than they can afford, going with minimal  or no coverage, or working less to qualify for subsidies.

This shouldn't have come as a surprise to the administration. IBD has been  writing — and the Congressional Budget Office has been confirming — for more  than three years that ObamaCare would give "older households without access to  employer care a big incentive not to earn too much" to qualify for  subsidies.

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1 Reply
Milligan Hay - Iowa d:^)
Veteran Advisor

Re: Obama care reality

A disaster by design is how to start a dictatorship. Screw up a nation beyond all belief, so bad that the non-government methods can not fix it. Have the government blame everyone but themselves for the disaster , then install the chosen dictator to control everything. It is all laid out as a plan of action in Obama's book and in "My Struggle" by Adolf Hitler. It is as plain as the nose on your face.