JohnTommasi.com: The Economics of Unintended Consequences & Common Sense
  • Home
  • Danger Zone
  • Murder at the Front Door
  • About/Contact
  • Blog
  • Stock Pick of the week
  • FED Speak

The Affordable Care Act costs more for the Poor and less for Millionaires

3/29/2015

0 Comments

 
Picture
   I submit that President Obama and all the democrat politicians that voted for Obamacare never even read the proposed law. Nancy Pelosi admitted it. So, now, when chaos reigns, they act surprised that things aren't working.
Bill O'Reilly

The affordable Care Act (Obamacare), continues to have unintended consequences and a burgeoning price tag; first the cost.  In a recently released report from the Administration, the average subsidy for an Obamacare insured individual is $268.  Doing some simple math yields the following: $268 subsidy/recipient multiplied by 7.5 million recipients times 10 yields a 10 year cost of $2.01 trillion a far cry from the $859 billion projected by the Administration.  In addition, the cost of administering the program and the website has a yearly cost in the billions.  Final numbers are not in, but as a result of Obamacare, healthcare costs appear to have risen more than 8% in 2014 and are expected to increase by 7% in 2015; 4 times the rate of inflation.  In addition since 2008:  
             The average deductible has double from 1000 to 2000
             The co-pay on doctor’s visits have doubled (including specialists)
              Prescription drugs have increased by 50% (inflation by 15%)
              Premiums have increased an average of 8%/year

    What I find to be particularly egregious is the amount of lies (“If you like your insurance, you can keep it) and half-truths.  What the Administration never told anyone is that if you are receiving a subsidy, you have to declare the subsidy and pay  income taxes on it when you do your end of year tax return.  Also, don’t forget the penalties for not having insurance and they are as follows: n 2015, the ACA penalty will be 2% of your household's annual income, or $325 per adult and $162.50 per child, whichever total amount is greater, to a maximum of $975. In our examples above, the single-person household would pay double the fee in 2015, $450, or a2% of their annual income.  What does this mean?  When Obamacare was passed, 48 million people were without insurance (many by choice, see June/July blog 2013), 7.5 million have taken advantage of the ACA which leaves 40 million people who have to pay the penalty.
  And one last fact;  A number of wealthy people are retiring before age 65 (the age of medicare eligibility), and they are showing no income (they are living by withdrawing money from various savings accounts).  When you apply for insurance under the affordable care act, the application asks what your yearly income is and there are no questions concerning your wealth (assets minus debt).  If you are withdrawing money from savings, this is not income.  I personally know of two millionaires on Obamacare who are receiving more than $500 in subsidies/month and they are in line with the law.  


0 Comments



Leave a Reply.

    Author

    John Tommasi is a retired Senior Lecturer of Economics & Finance from Bentley University and  the University of New Hampshire.

    Archives

    January 2023
    May 2020
    April 2020
    February 2020
    January 2020
    October 2019
    July 2019
    June 2019
    May 2019
    March 2019
    December 2018
    November 2018
    September 2018
    July 2018
    May 2018
    January 2018
    December 2017
    November 2017
    September 2017
    July 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    July 2016
    June 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    August 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013

    Categories

    All

    RSS Feed

Powered by Create your own unique website with customizable templates.
Photo used under Creative Commons from simone.brunozzi