Fundamental ACA / Obamacare Flaw: Is it Simply Nationalized Wealth Redistribution?
I’ve been following the debate regarding the Affordable Care Act very carefully over the last few years, hearing out various points of view on the topic. I’ve even presented my own compromised solution on how to move forward with the debate in a functional manner, you can read it here at The Unaffiliated Party ACA / ObamaCare Solution. The following is the most simple analysis I can provide you regarding what could be the Affordable Care Act’s fundamental flaw and why some are calling for its complete removal, not simply revisions here and there. It has to do with the economic model providing the foundation on which the ACA is built.
The Affordable Care Act prides itself on making health care more affordable. Its supporters have evidence that points to examples of this and its detractors have examples that show otherwise. My sticking point, what potentially makes the whole thing fall apart, are the “subsidies”, basically tax payer funded tax credits or discounts. Who hands out the subsidies? Government. Where does government get its money? Tax payers. Lets check out who qualifies for the subsidies and who doesn’t.
(Reuters) 09/25/13 – “Consumers who earn up to 400 percent of the federal poverty level, or $62,040 for a couple, will qualify for subsidies that will lower the price further.”
(The Exchange) 09/20/13 “Subsidies are phased out at 400% of the poverty line, which this year is $45,960 for an individual and $94,200 for a family of 4. Above that, people have to pay the full cost of coverage.”
(Yahoo News) 09/27/13 “To help pay for the program, the wealthiest Americans, families that make more than $250,000 a year, will have to pay a little bit more.” – President Obama
Couples earning over $63k get no subsidies, so anyone earning above that is in one way or another paying for the discounts that everyone below gets because subsidies come from taxpayers. Those taxpayers end up paying more either through additional direct taxes or increased cost of care or coverage. Basic math tells you that couples earning over $63k would pay less if discounts and rebates for couples under $63k were not part of the plans “affordability” model. I can elaborate on why this is true, but hopefully most of you can see why this is the case. Using the data quoted above, President Obama likes to say families earning over $250k should “pay a little bit more”, now its families over $95k, couples over $63k and individuals over $46K who will “pay a little bit more”. It appears the President has lowered the “pay a little bit more” bar.
Is the White House truly concerned about lowering the cost of health care for everyone, or just a select group at the expense of the rest of America? The implications created by this redistribution are socially significant. We like to complain about America’s diminishing middle class. Exactly how does redistributing wealth from a couple in the middle class help them remain in the middle class? At the same time, how does an individual’s knowledge that subsidies will go away if he makes it into the middle class encourage him to further his economic condition? This issue is already being studied by others who are troubled that the ACA Subsidy Cliff May Incentivize Some To Earn Less.
Those are my current observations on the issue. I encourage you to do your own research. Browse the rest of my recent posts regarding health care and government intervention as well as the compromised solution I’ve proposed which you can find at the following post, The Unaffiliated Party ACA / ObamaCare Solution. I continue to study and evaluate my feelings on the Affordable Care Act on a daily basis so that I can verify my assumptions and determinations. Definitely feel free to share any information that might further inform my evaluation of the issue. Let’s not let ideology blind us from functional sustainable real word solutions to our problems, think for yourself.
-Mr Blacksheep @ http://www.unaffiliatedParty.org
Could this Wealth Redistribution approach be intentional and not accidental? Lets see what Donald Berwick, Obama’s pick for medicare chief, thinks about using wealth redistribution to “spread health care insurance around”