Sunday, December 22, 2013

When You've Lost the New York Times...

As is well known by now, Obamacare is a massive redistribution scheme, taking from the middle class and giving to the poor.

Apparently, many members of the middle class, to say nothing of their Congressional representatives, did not know that they were going to be paying for what they voted for.

Now, across America, many people who had their insurance plans canceled cannot afford the new plans that are being offered on the exchanges.

It depends on where the subsidies end. Those who earn too much to receive a government subsidy face a choice between going broke paying for insurance or going without it. Apparently, the administration wants insurance companies to offer new “catastrophic plans” but the jury is still out about how that is going to happen and what that will do to Obamacare.

Some optimistic commentators have suggested that Obamacare is disintegrating before our very eyes, and that would be a good thing indeed. Yet, each time the administration tries to rejigger the program by intervening yet again in a market (the insurance market) that it does not understand, it makes a bigger mess.

Yesterday, the New York Times ran an excellent—that means, objective and informative—story about the people who did not qualify for subsidies. As noted her before, the Times—to my surprise—has done some great reporting on the Obamcare crash. Credit where credit is due.

We know that the mainstream media has been running interference for Barack Obama from the beginning. Now that his administration’s failure is too big to cover up, the president has found himself adrift. Having lost the New York Times, he is lost.

Here’s an excerpt from yesterday’s story:

The Chapmans acknowledge that they are better off than many people, but they represent a little-understood reality of the Affordable Care Act. While the act clearly benefits those at the low end of the income scale — and rich people can continue to afford even the most generous plans — people like the Chapmans are caught in the uncomfortable middle: not poor enough for help, but not rich enough to be indifferent to cost.

“We are just right over that line,” said Ms. Chapman, who is 54 and does administrative work for a small wealth management firm. Because their plan is being canceled, she is looking for new coverage for her family, which includes Mr. Chapman, 55, a retired fireman who works on a friend’s farm, and her two sons. “That’s an insane amount of money,” she said of their new premium. “How are you supposed to pay that?”

An analysis by The New York Times shows the cost of premiums for people who just miss qualifying for subsidies varies widely across the country and rises rapidly for people in their 50s and 60s. In some places, prices can quickly approach 20 percent of a person’s income.

Experts consider health insurance unaffordable once it exceeds 10 percent of annual income. By that measure, a 50-year-old making $50,000 a year, or just above the qualifying limit for assistance, would find the cheapest available plan to be unaffordable in more than 170 counties around the country, ranging from Anchorage to Jackson, Miss.

A 60-year-old living in Polk County, in northwestern Wisconsin, and earning $50,000 a year, for example, would have to spend more than 19 percent of his income, or $9,801 annually, to buy one of the cheapest plans available there. A person earning $45,000 would qualify for subsidies and would pay about 5 percent of his income, or $2,228, for an inexpensive plan.

In Oklahoma City, a 60-year-old earning $50,000 could buy one of the cheapest plans for about 6.6 percent of his income, or about $3,279 a year with no subsidy. If he earned $45,000, with the benefit of a subsidy, he would spend about $2,425.

The FiscalTimes adds another salient fact. The more people are spending for health insurance the less they will be spending on discretionary items:

If even a fraction of the middle class and upper middle income earners divert some of their discretionary dollars to pay for health care, it will have a significant impact on consumer spending.  What will that mean for the economy? Consumer spending accounts for about 70 percent of the nation’s GDP, although experts say that number is likely to decline.

The top 20 percent of income earners account for about 40 percent of all spending in the U.S.  When you increase the costs of health care and the new taxes associated with Obamacare, you can hear the wallets closing. 


zbignu said...

I used to wonder, when reading about Mao's "Great Leap", how those in positions of authority could be so utterly blind to the havoc their policies were wreaking. Surely no one intended to starve to death millions of people. Though as yet no one has died from our health care debacle, I begin to understand. The powers that be simply wish for a certain outcome and are so certain of their own abilities and the 'rightness' of their cause that they double-down in the face of obvious failures. They simply can't fathom that they are wrong either in their theories or policies, evidence to the contrary be damned

n.n said...

While the poor are complicit, their role is to protect other interests.

Obamacare is designed to protect Obama and others who live in highly financed and subsidized districts. It is evidence that local and regional economies are either stagnant or recessive; and that inflationary forces, including trillion dollar deficits, have taken their toll.

Unknown said...
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Susan said...

The premiums do not even tell the whole story. The groups in your article might have to pay deductibles of up to $5,000 or higher, before insurance payments start kicking in This makes their insurance even more unaffordable. Does anyone know whether even the subsidized, who have much lower premiums, still have large deductibles?

Stuart Schneiderman said...

I have read about this in various places, and might even have posted about it, but you are quite right... the deductibles are very high for most plans... the only people who are really going to find this affordable are those who are signing up for Medicaid... that this is not very high quality care.