Introduction by Paul Craig Roberts
The article below is the most comprehensive analysis available of “Obamacare” – the Patient Protection and Affordable Care Act. The author, a knowledgeable person who wishes to remain anonymous, explains how Obamacare works for the insurance companies but not for you.
Obamacare was formulated on the concept of health care as a commercial commodity and was cloaked in ideological slogans such as “shared responsibility,” “no free riders” and “ownership society.” These slogans dress the insurance industry’s raid on public resources in the cloak of a “free market” health care system.
You will learn how to purchase a subsidized plan at the Exchange, what will happen when income and family circumstances change during the year or from one year to the next, and other perils brought to you by Obamacare. It is one of the most important articles that will be posted on my website this year. Americans will be shocked to learn the extent to which they have been deceived. The legislation neither protects the patient nor are the plans affordable.
The author shows that for those Americans whose income places them between 138% and 400% of the Federal Poverty Level, the out-of-pocket cost for one of the least expensive (lower coverage) subsidized policies ranges from 2% to 9.5% of Modified Adjusted Gross Income (MAGI), a tax base larger than the Adjusted Gross Income used for calculating federal income tax.
What this means is that those Americans with the least or no disposable income are faced in effect with a substantial pay cut. The author provides an example of a 35 year-old with a MAGI of $27,925. The out-of- pocket cost to this person of a Silver level plan (second least expensive) is $187.33 per month. This cost is based on pre-tax income, that is, before income is reduced by payroll and income taxes. There goes the car payment or utility bill. The lives of millions of Americans will change drastically as they struggle with a new, large expense – particularly in an era of no jobs, low-paying jobs and rising cost of living.
The author also points out that the cost of using the mandated policies will be prohibitive because of the large deductibles and co-pays. Many Americans will find themselves not only with a policy they can’t afford, but also with one they cannot afford to use. Those who cannot afford the insurance, even with a subsidy, will be faced with a costly penalty, and in many cases, this, too, will be difficult, if not impossible, to pay. As each year’s subsidy is based on last year’s income, there will be a substantial year-end tax liability for those who must repay the subsidy in whole or part because their income increased during the year. The stress alone from such a regressive scheme is, without a doubt, not conducive to good health and well-being.