IRS, health care premiums under ObamaCare, and right-wing distortions

There’s a bunch of nonsense circulating on the web claiming the Obama Administration has said the average family premium under Obamacare will be $20,000 in 2016.

The sources, primarily lousy journalists, right-wing ideologues and wingnuts (Betsy McCaughey), are either:

a) unable to read and understand basic English; and/or

b) quite willing to distort, mis-inform, slant and obfuscate.

The kerfuffle began with a lengthy IRS memo released last week.  [opens pdf] Ideologues took one sentence (page 70, third paragraph) out of the document and claimed it said something which it absolutely did NOT.

The nut-o-sphere mis-read the IRS’ statement and interpreted an example as the IRS’ estimate of cost.

IT IS NOT.

If you read the para at the beginning of the relevant section, it reads “The following examples illustrate the provisions of this section.”  Note the use of the words “example” and “illustrate”.

In fact, no one knows what the premium for a bronze-level plan for a family of 5 will be in 2016.

Now that we’ve thrown out that trash, let’s talk about family premiums, shall we?

First, let’s be precise about definitions. Employers’ costs are almost always lower than individual coverage, so be precise when talking about costs – are they for individual coverage, Medicaid, or employer-based plans.

Second, most individuals/families with incomes below 400% of the Federal Poverty Level will have a subsidy so their “cost” on the individual (or small employer” market will be less than the “list price.”

Third, the cost for a medium cost area is about $19,138 for a family of four for the Silver plan with no subsidy. If you make $80 grand, your cost – after the subsidy – is $11,528.

Fourth, my family – with four covered, all of us healthy, and no subsidy now or later, is paying $756 in premiums for a policy with an $11,900 deductible TODAY. That’s $20,972 TODAY. I can’t wait for Obamacare, as our costs will go DOWN and coverage vastly improve if the IRS’ figures are correct.

The best resource for calculating cost is the Kaiser Foundation’s calculator -
http://healthreform.kff.org/subsidycalculator.aspx

Unfortunately this is yet another example of ideologues taking statements out of context to advance their own agenda. Of course I didn’t read news of this revelation about Obamacare in the credible press; they ignored it because it isn’t a story. There is no story here. Unless it is about distortions for political gain.

This first came to light (for me) in the Workers’ Comp Advisory Group’s forum; not sure why it was there.

10 thoughts on “IRS, health care premiums under ObamaCare, and right-wing distortions

  1. Joe, looks like you did your homework for this one. I do have one question though, where does one find this “credible press” these days?

  2. “Third, the cost for a medium cost area is about $19,138 for a family of four for the Silver plan with no subsidy. If you make $80 grand, your cost – after the subsidy – is $11,528.

    Fourth, my family – with four covered, all of us healthy, and no subsidy now or later, is paying $756 in premiums for a policy with an $11,900 deductible TODAY. That’s $20,972 TODAY. I can’t wait for Obamacare, as our costs will go DOWN and coverage vastly improve if the IRS’ figures are correct.”

    From where do you think subsides come? That’s not free money.

    What deductible will Obamacare offer? I find it misleading to include your deductible in your total cost unless you meet it every year.

    • Fred – thanks for the comment. Allow me to respond to your two statements.

      Re subsidies, I am quite well aware of the source of “subsidies”, the source of that money is from the fees paid by pharma, hospitals, and the excise tax levied on device manufacturers among other sources. These were part and parcel of the PPACA/Obamacare negotiations.

      Moreover, the “cost” that is relevant to families is what they pay, after subsidies if any.

      In case you aren’t aware of the deductibles under Obamacare, the maximum deductible is $4000 for a small group plan, however the max out of pocket is the same as mine – $11,900 total. Thus the financials are, if not identical, certainly similar.

      Finally, what do you think a family plan would cost without Obamacare? I find it troubling that ideologues damn Obamacare while offering no reasonable alternative and ignoring the underlying cost drivers that have put us in the position where the Feds had to take action.

  3. Betsy (McCaughey) Ross, Former NY Gov. George (Elmer Fudd) Wacki Pataki’s Lieutenant Wing-Nut, I mean Governor, strikes again!

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  5. Your statement that subsidies will come “from the fees paid by pharma, hospitals, and the excise tax levied on device manufacturers among other sources” is a perfect example of the poor state of economic education in the US today. ALL taxes are paid by consumers – even so-called business taxes.

    Quite simply, taxes are a cost of doing business. Businesses must make a profit after taxes or they go out of business. Increasing taxes on business simply means the business will raise prices to offset the tax increase.

    Regardless how you slice or dice it, consumers will pay the subsidies. Your personal total bottom line expense for “free” health care may be a little lower, but the charges for those services will be higher.

    Of course, I understand the “the rich” will ultimately pay the majority of the subsidies (through higher taxes) but that’s okay because it’s not your money.

    Please remember, as Europeans are learning today, socialism is great – until you run out of other people’s money.

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