Q&A of the Day – How Much You Pay for Obamacare Subsidies
Each day I feature a listener question sent by one of these methods.
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Today’s entry: Brian and Joel, it's George from Stewart. I listen to your show every morning, love what you guys do. Heard the news story about the poor woman with breast cancer. Always feel close to anyone with cancers. My wife suffers as well. She mentioned her Obamacare premiums were $14 a month. I pay $400 a month for my wife and I, and I work for a Fortune 14 company with a $9000 out of pocket, 54,000 employees. What am I missing?
Bottom Line: Right, so in a highly predictable move many in the news media have sought out people with sticker shock from Obamacare policies that are currently being offered in open enrollment without subsidies, which expired, and is a central point of contention between Democrats and Republicans during the partial government shutdown. In what’s a clearly politically motivated tactic by news organizations to curry favor for the Democrat’s position, there’s been a focus on potentially impacted sympathetic characters (WPTV in particular has made a point of seeking this out locally). A woman suffering with breast cancer who may not be able to afford the true cost of care she has been receiving certainly fits the bill.
What’s currently happening during the partial government shutdown coinciding with the expiration of the COVID-era Affordable Care Act subsidies is extremely important and highly instructive. The fact of the matter is that the Affordable Care Act is what it has always been – a fraud. There’s nothing that has been or is affordable about the healthcare plans being offered through the exchange. The real cost of the health insurance coverage offered through the exchange is now being seen. That’s important because up until now, due to the COVID-era subsidies, 92% of the ACA plans in use have been subsidized, meaning – paid for by you and me and other federal taxpayers.
As you point out, your monthly premium with your company sponsored plan is $400 per month, which is typical. But you’re paying more than that for your ongoing healthcare coverage. The total subsidies, known as “premium tax credits” for ACA plans is $125 billion. The average subsidy paid is $5,727 per plan. In other words, the real monthly cost of that health insurance plan for the woman with breast cancer who was cited in a recent news story isn’t $14 per month – it's $491 per month. With $477 being paid for by other federal taxpayers. To put this another way...
The average federal taxpayer is paying $780 this year for the Obamacare subsidies. The net income tax burden – meaning for those who are net federal income tax payers – is $1,560 per year. What this means is that in addition to what you’re paying for your health insurance and net health insurance costs this year – you're paying an additional $780 to $1,560 for healthcare to subsidize the ACA policies. What’s more, it’s commonly the case that subsidized healthcare plans provide better coverage than most employer and privately provided plans. This is due to those shopping the marketplace seeing that they can get higher end health insurance plans effectively paid for by taxpayers through subsidizes so why not? It’s a form of insult to injury for the reality on the ground for the average American family struggling to account for paying for their own family's healthcare needs.
You’ll notice there has never been a story presented in traditional news media providing this analysis or interviewing others asking the average family if they can afford the healthcare costs for their family but then also an additional $780 to $1,560 annually for the healthcare of those obtaining Obamacare policies. It’s journalistic malpractice to not cover this dynamic when advancing the conversation, and it’s a guarantee that there are actually more families negatively affected, including the inability to obtain potentially necessary healthcare (though an inability to afford deductible levels) who are on non-ACA plans than the 21 million who are using them.
It is sad to hear the story of a potentially negatively impacted woman suffering with breast cancer who could face additional adversity in attempting to afford coverage without subsidies. However, her story is being told out of sheer political interest by news media interested in doing the bidding of the Democrat Socialists who’ve become the base of the Democrat Party (and the sympathetic news media). She, and others like her, are merely pawns used in advancing an unsustainable quazi-socialized healthcare system.
There are also countless examples of families compromised similarly because they can’t afford to pay for their family's healthcare needs, but then also those of 21 million other Americans on subsidized Obamacare plans – but you’ll never hear those stories. You might personally be living that story, along with millions of other Americans, but you’ll not hear it. There is no such thing as “free healthcare”. Someone is always paying for it and if it’s not you, then it’s the others around you whether they can afford it or not.
This isn’t about compassion, because keeping the status quo in place isn’t compassionate and far more people are negatively impacted with the status quo in place as opposed to allowing the ACA marketplace stand (or fall) based upon the merits of what Barack Obama and congressional Democrats created it to be. This is the lesson of socialism that’s failed all throughout world history and that has resulted in the horrific deaths of hundreds of millions of people. Social safety nets have long been abused in this country, and the greater and more pervasive socialism infiltrates all aspects of our society, the worse society as a whole will be for it (even if there’s a small minority that stands to temporarily benefit from it).
Compassion and aid is best provided through non-profits, faith groups and the private sector. Compassion is never successfully provided through government-imposed socialism. It’s insidious.