John Goodman on ObamaCare
By David Henderson
John Goodman writes:
The two most serious defects of ObamaCare were never discussed at the Health Care Summit or in the President’s speech this afternoon. I blame the Republicans for that. As a result, things have gotten worse for the GOP. President Obama is now offering to make minor concessions on the issues the Republicans did bring up and call the whole effort a “bipartisan compromise.”
Goodman then highlights the two defects. One is the following:
In 2016, ObamaCare will require almost everyone to have insurance that costs an estimated $15,000 for a family (House version). For a $30,000-a-year worker, there are additional limits on out-of-pocket costs. If the employer is providing the insurance, the total tax subsidy from the federal government will be about $2,295. However, if the employee were not getting insurance from the employer, he would qualify for the better insurance (less out-of-pocket exposure) in a new health insurance exchange — with a federal subsidy that would be $17,105 higher!
ObamaCare (House version) would create marginal tax rates in excess of 60% for workers earning as little as $25,000! This is caused by the steep withdrawal of health insurance subsidies (in the exchange) as income rises.
Goodman shows some eye-popping graphs. In the comment section, though, North Carolina State University economist John Seater offsets some of Goodman’s pessimism, writing:
I see no reason why the Republicans cannot bring up these points now. A few clear, simple examples of just how stupid this plan is would make an effective case against it. The fact that the same case could have been made before won’t matter to the average voter, who didn’t watch the broadcast of the health care summit anyway. Now is the time to pound the table with simple facts about gigantic marginal tax rates for some middle-income people but not others with almost the same income, gross “unfairness” (a favorite word among the big-hearted Democrats) in the form of higher subsidies for higher income families, and nearly unbelievable disruption of the labor market. The average guy can understand it all if it is presented clearly and simply, and it is all true.