Scott Gottlieb has a piece up at Real Clear Politics explaining how middle income families will be financially squeezed by ObamaCare. The problem is the incentive for employers to drop coverage because the fine is so much cheaper than the cost of a health care policy. It’s likely that only the largest employers will continue to offer coverage as an incentive to recruit and retain top talent. So where will that live middle class individuals and families? In a crunch:
Middle class families take note. A family of four with an aggregate income of more than $88,000 annually or an individual earning around $44,000 could find themselves badly strained by healthcare costs under the Obama plan.
Many of these folks currently get their health coverage from work. They benefit from an implicit subsidy built into that workplace coverage that lets them spend pre-tax dollars through their employer to purchase health insurance. Depending on their tax rate, that subsidy helps offset some of the premium costs.
Under the Obama plan, many of these families could instead find themselves buying their health insurance on the new state-based exchanges that get started in January 2014. For a family of four, premiums on even one of the lower priced “silver” options could still cost more than $15,000 annually on the exchanges.
Only their incomes will make them ineligible for the “premium assistance credits.” that are meant to offset some of the cost of buying the pricey comprehensive coverage that the Obama plan mandates. These families will also no longer have the benefit of being able to defray some of these costs by spending pre-tax dollars.
What’s maddening in all of this is that politicians created the problem with employer-sponsored health insurance, and now their “fix” is even worse. Hopefully we’ll hear some good news next month out of the Supreme Court.