Some of the deserving poor whom you’ll be subsidizing under Obamacare
Ever since the Obamacare rollout I’ve been studying more of the details of Obamacare, including how subsidies will actually work. There’s so much information out there, so much of it shocking, that my posts just can’t keep up with my teeming brain.
I’ve probably got a hundred drafts for articles I haven’t published yet. Several of them deal with the issue I’m about to discuss, which boils down to the fact that assets are not considered when subsidies on the exchanges are determined. Family size and income, particularly line 37 of your federal income tax return, constitute the basis on which a person becomes eligible for subsidies. If your income is under 400% of the poverty level, you get them. If it’s over that, you don’t. All of that does not apply to people who already have employment-based insurance available to them; they have to play by different, more restrictive rules.
But let’s just concentrate on those without employer-based insurance who are shopping on the exchanges. When we look at them, we get anomalies like the Horsts. The Horsts have made a choice for a particular life-style—something they have every right to do—that happens to now end up qualifying them for a free ride in the new Obamacare world. And yet they might very well be asset-rich (the article doesn’t say), and they are mostly definitely highly-educated.
The Horsts didn’t make the choices they did because of Obamacare (they seem to have made the changes a few years before the law was passed), but they do get the benefits. My objection is not to the Horsts themselves. They don’t bother me at all; they’re not doing anything wrong. It’s Obamacare that bothers me. If people have major assets and are getting subsidies anyway, that bothers me. And more importantly, Obamacare opens the door to people purposely manipulating their financial situations in a big way in order to get subsidies when in fact they are fairly—or even extremely—well-to-do.
Here’s a video that could assist those who wish to change a few things in order to qualify in the future. It turns out it’s not all that hard to exploit what one might call the loopholes in the system. Be assured that it will happen. Again, this is not the fault of the people taking advantage of a law that allows them to. It is the fault of the law’s drafters [be patient; the video has been taking a longer time than usual to load, but it does load]:
Somehow I don’t think most people would be pleased if they were to find out about this.
You are absolutely correct Neo on the lack of means or asset testing language in the ACA law. I have a client with a multi-million dollar net worth who will qualify for a full premium subsidy if he chooses to register. Simply put, a little financial planning can help reduce or eliminate any financial cost for many of the “well off.”
I am not inclined to see which line item of the AHA will stimulate my gag reflex more than another line item. That seems utterly pointless, and utterly nauseating, to boot.
I do not want to see the AHA made better, not by one iota. So I am not studying its entrails. I want it decapitated and the whole carcass flung out to rot on the garbage pile of history.
Tonight’s election returns in places like VA deserve more attention. Virginia, not NJ.
Don Carlos:
I think the details of O-care will make people more and more outraged, which is important.
And of course the Virginia election is important (actually, I think the NJ one is too, but just in a different way). I plan to write about the results.
Several observations:
1) No less than Justice Learned Hand said that it is not illegal for anyone to structure theri affairs so as to pay the least amount of tax. One would think that this also applies to subsidies, whether such structuring is intentional or not.
2)Milton Friedman noted the following about humans and money:
3) I remember being a poverty stricken grad student (redundancy alert!) standing in line at the Grand Union watching a woman (probably about as old then as I am now) in a mink coat using food stamps to pay for her purchases of lobster and steak; all when my wife and I were living off of tuna fish and tomato soup.
I mention this not out of resentment or envy, but to point out the fact that such is always the way of a government program. Even 40 years ago, there was no concern for waste because it was someone else’s money.
Furthermore, the great bane of a Progressive society is that it makes success dependent upon gaming the system. Want to pay less income tax, follow Justice Hand’s advice and intentionally (and legally) structure your life accordingly. Want to become eligible for Obamacare subsidies? Find out how you can legally structure you life to do so. Remember the “work less” wisdom of several weeks ago? Several months ago a study was released that showed in Pennsylvania a single mother actually lost money if she made more than ~$27,000 but less than ~$57,000 after accounting for all of the low income perks she was eligible for.
It’s like the baseball player who asks his manager not to put him in the line up against a certain pitcher because he can never get a hit off of him and it will ruin his statistics.
I remember the day Obamacare was passed. That evening my husband and I went out for “happy hour”. First thing, I looked around the bar and said to my husband, “I don’t want to pay for these people’s healthcare.”
I looked at the photo of the Horsts and recognized them right away — not those actual two people, but their ilk. I know a lot of self-satisfied arty people, so smug that they’re surrounded by a nimbus of smugness particles.
I have recently been turned down yet again by Mass Health for the Health Safety Net now because I have (an embarrassingly small) 401K which is an “asset” that I am not allowed to have unless it is only $2000.
In the Left’s eyes, the only asset a slave needs is a body fit to work.
Living in Washington state, I went on the state exchange website and found that they count neither interest nor capital gains in totaling income. Capital gains I can understand (although the summaries I’ve read of the requirements include capital gains) but leaving out interest. Maybe it’s just a glitch. Like Obama’s elections.
We need to see the Horsts in a larger context:
Art and art “education” are everywhere in the town of ~150K in which I live; in the schools, public and private (one for middle schoolers is a designated “arts academy”), in commerce-a commercial do-it-yourself pottery place; to say nothing about the half-dozen ballet/dance studios that are always giving ill-attended recitals in public venues.
The city government loves art, of course. There are now a bunch of artsy non-profits that get grants from city gov’t and there is a move underfoot to build “affordable housing” for artists (not auto techs or house painters, but “artists”).
Any resemblance to Weimar Berlin? Naaah. I read too much.
JVermeer51:
I believe that must be a glitch. The standard for the determination is line 37 of form 1040.
No, Yamarsakar — a body fit to NOT work!
Interesting and horrible. Because of a few lucky breaks (my rural farm is now suburban, a first-cousin-twice-removed died and left me a pile) I am technically a millionaire. But my income has always been…. modest. I rather suspect that I would qualify for the full subsidy given the size of my family.
Neo – Just curious if you have run this bit of fact by your liberal friends. Do they care? What about 0care would make them take notice? I have noticed that all my few liberal friends have gone dead silent on the subject of 0care.
It has been obvious from the very beginning that even with the best intentions on the part of the administration this thing was bound to leave many openings for exploitation by all sorts of people with an interest in and talent for gaming the system. Not only people exploiting the subsidies etc. as consumers, but lawyers and consultants and health care providers. And we know that we can’t even assume good will, since cronyism has been operative in it from the start. It will be severely infested with parasites.
I’ll never forget arguing online about HillaryCare with a woman who went on and on about how great it was going to be as she explained some labyrinthine set of rules and procedures. It turned out that she was a lawyer/consultant in the health care arena who eventually admitted that she expected to do very well out of it.
Axiom: if you need a consultant to navigate the system, it’s too complicated.
More anecdotal evidence, I have some lefty friends who are non-tenured researcher at a major university, the kind of job where they must pursue external grants and collaborative research funding in order for their employment position to even exist. It’s fun technology and basic scientific research with few practical applications, and they like their field, if not their station in life. They would both love to be able to follow their muse instead of the daily grind, but a medical condition requires them to be in the university’s employ for the excellent health care benefits.
As late as September they were still excitedly burbling about how Obamacare changes everything, they can pick up and move anywhere and do anything, even if it doesn’t pay well, or at all. They can just get great insurance on the exchanges! It will probably be better than this sorry University coverage we have now! Of course, my profitable employer can only dream of affording the gold-plated plan they have as university affiliated researchers.
I tried to gently suggest that the details will be in the fine print after implementation gets going, they just shake their heads in sorrow that their friend and neighbor could possibly be infected with crazy wingnut ideas like Obamacare not being anything but great free stuff… They are not far from the article’s artists in their expectations.
ArmyMom:
I have hardly talked politics at all with my friends for the last year.