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ObamaCare Clusterfuck: Catch 22 for the working poor who cannot afford employer insurance but get no subsidy

Sarah Kliff, WaPo:

A follow-up: This seems inherently unfair. The monthly premium for our current health insurance plan costs $484 per month for a single 40 year old employee. A $10/hour employee (someone on our low end) who works a full year will earn about $20,800 per year. 9.5% of that is $1,976 or about $165 per month. To think that a $10 per hour employee could absorb that cost is crazy.

Health policy experts do worry about the issue that this reader raises: That low income workers will not accept the health insurance they’re offered. A report from the benefits consulting firm ADP found that, right now, most low-earning workers do not buy the health insurance benefits that they are offered.

The ADP report found that, among workers earning $15,000 to $20,000, 37 percent elected to purchase health benefits when they were made available.

“In 2014, there are going to be a number of people who are eligible for benefits for the first time,” ADP’s Christopher Ryan told me at the time. “These additional people are primarily lower-income and the critical question is: To what extent, if they have the opportunity to purchase benefits, will they participate?”

Are employees who receive employer provided health insurance eligible for subsidies if their income is below 400% of the poverty level?

No, workers who receive employer benefits—those that meet the coverage and affordability requirements discussed above—do not qualify for federal subsidies.

So, if I read this correctly -- and I'm still ramping up on this stuff -- 63% of the $10 hour workers (we call them "normal" in today's economy) will not purchase insurance if employers offer it to them, and will elect to pay the penalty instead,* at least as along as the penalties are less than the policy.

This is yet another example that shows how ObamaCare isn't "universal" at all. Obots and ObamaCare defenders should really stop lying about that. It's optimized for professionals, technocrats, and "creative class" types who can figure out complex forms, are comfortable working online, and won't be trying to run the health exchanges from a five-year-old Windows box or from the library. ObamaCare is especially optimized for Obama's demographic: That's why ObamaCare cherry-picked students whose parents had policies, but who (being young) are far less likely to need serious care. It is also biased against the working poor, as the logic above shows.

Once again, the fly in the unguent is eligibility. ObamaCare, to determine the amount of subsidy, has to throw people into buckets by income. Unfortunately for the working poor, the millions making $10 an hour, they are too "rich" to go on Medicaid, and too poor to afford the insurance they are legally mandated to buy, so they end up falling between the two buckets. That's some catch, eh?

Of course, if health care were a right, and we had single payer, all the complex and fundamentally unjust machinery to determine eligibility goes away, and the parasitic rentiers of the health insurance industry debloat, die, dry up, and blow away as well. To Obama, that would be bad. Hence another layer of suffering and stress imposed on the working poor.

NOTE * Wait 'til the ERs start turning people who pay the penalty away. I'm sure they'll find a way. Not that I'm bitter.

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katiebird's picture
Submitted by katiebird on

Also, I've been reading about the Tax Preparation Companies and how they've lobbied against EasyFile Tax Legislation.

And since our tax return is an important step in determining which bucket is our destiny, I'm wondering how much input those Tax Preparation Companies had in creating this mess. I KNOW I saw some HR Block ads that bragged about being able to help us sort this all out.

Submitted by lambert on

and it was clear they were preparing for next year. I rather like H&R Block as a vendor, actually. Yes, they're not cheap but I'm paying to sleep nights.

The real issue is that the system is so complexified you have to pay rent to understand any part of it. That's not a bug. That's a feature.

katiebird's picture
Submitted by katiebird on

We've already decided to go in to HR Block for our taxes next year for the sleep factor. And I'm even thinking about going through their training again (I went through it in the 80s after they had all those big changes to the tax code) .... I'm not committed to the training idea. It might be better to do that in 2014 after some of the dust settles.

Rainbow Girl's picture
Submitted by Rainbow Girl on

" ... in determining which bucket is our destiny."

The American Dream 2013 = Bucket Destiny Lotto

nihil obstet's picture
Submitted by nihil obstet on

I'll work for single payer out of pragmatism, but I favor a national health service. There seems to be an opening here for government-run cheap/free clinics to handle routine care for the uninsured, and to promote public health. Obviously, I think we should be pushing this.

Submitted by lambert on

It might work. After Walmart collapses, we could disinfect the big boxes and take them over.

propertius's picture
Submitted by propertius on

After Walmart collapses, we could disinfect the big boxes

You misspelled "exorcise".

quixote's picture
Submitted by quixote on


When I first heard about how much Congress figured people had to kick in at various income levels, I thought, "Wow. Spoken like someone who makes $160,000 per year." It was on the order of $500/month for someone making $50,000 a year. That's $6000 per year. Those levels are in the zone of "you're not buying shoes this year, Toots."

But this sounds even crazier than what I remembered. So, say, an adjunct faculty member who's eligible for uni health insurance by paying 25% of a near-non-existent salary would not be eligible for subsidies?


I must have misnderstood something. (Dept. of They Would Never Do That)

Rainbow Girl's picture
Submitted by Rainbow Girl on

"That's $6000 per year. Those levels are in the zone of "you're not buying shoes this year, Toots."