How could a law intended to make health care affordable and reduce inequality end up failing — or even hurting — millions of working-class Americans who were supposed to benefit? At least a dozen different ways.
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ObamaCare is helping millions of people, as one would expect of such a vast and costly undertaking. Yet the law has so many serious flaws that it's hard to keep track of them.
This accounting, or cheat sheet, of ObamaCare flaws that hit the working class especially hard, reveals why the law will yield more bitter fruit as it ages.
1. Bronze Trap
To make health care — not just insurance — affordable, Democrats added an extra layer of subsidies for modest earners on top of premium subsidies. But those extra cost-sharing subsidies only go to those who buy midlevel silver coverage. Households with stretched finances that can only afford bronze lose out.
How badly? The Congressional Budget Office, which mistakenly thought that most people eligible for the cost-sharing subsidies would opt for silver, cut $39 billion in projected outlays over 10 years — when the budget scorekeeper realized that lots of people were settling for cheaper plans that do little to make care affordable.
For a 35-year-old couple in Miami who have one kid covered by the Children's Health Insurance Program and income of $35,000, silver plans carry a deductible of $500 vs. an untenable $13,000 bronze deductible.
2. Individual Mandate Harsh
As the Obama administration explained it, the individual mandate was supposed to be a penalty for people who spurn coverage even though they can afford it. But what about a diner cashier who dropped coverage that she bought because a $6,000 bronze deductible is enough to wreck her finances if she lands in the hospital?
Millions of working class households will find themselves with a choice of paying a mandate penalty that they can't afford or buying an insurance plan that is of little use.
Enrollment data from Avalere Health and HealthCare.gov suggest that as few as 1 in 3 people eligible for coverage who have income between 150% and 200% of the poverty level have silver coverage.
3. Regressive Penalty
If enrollment jumps in 2016, it may not be good news because for millions of people, paying for unwanted bronze coverage may cost less than paying an individual mandate tax penalty. That's, in part, because the design of the penalty is quite regressive. The penalty for going uninsured in 2016 — a minimum of $695 or 2.5% of taxable income — will amount to 3.5% of income for a $20,000-earner, but just 1.9% of income for a $40,000-earner.
4. Cost-Sharing Cliff
In some cases, working an extra hour a week or earning an extra 50 cents an hour could make health care unaffordable. The difference between earning just under 200% of the poverty level and just over that threshold is so dramatic that it counterproductively discourages people from making more.
For a Chicago couple, earning $32,000 instead of $31,000 would modestly raise premiums for the cheapest silver plan, but out-of-pocket costs could soar by as much as $5,900 ($10,400 vs. $4,500) before the insurer pays all the bills.There are 8 more ways ObamaCare Has Failed The Working Class, find out what they are HERE.
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