Governments lie. Politicians lie. Obama lies. Even the official title of Obamacare – the Patient Protection and Affordable Care Act – is a lie. It’s going to degrade healthcare and it’s going to cost more. Much more.
As David Henderson points out, there are two ominous signs that this is so. First, insurance companies are no longer guaranteeing their premiums for a year. Instead they’re leaving themselves free to adjust the premiums “as necessary.” One writer said they’re not doing it because they expect premiums to do down.
I used to sell health insurance. One of the benefits was that the premiums were guaranteed for a year, no matter what. Another was that insurance companies hated to raise their rates because their policyholders would cancel their policies when they did. But that was back in the days when consumers mattered and figured heavily into the actuary’s calculations. Today they don’t The companies are just trying to stay alive.
The other is the recent announcement from the IRS that the cost of the cheapest plan under Obamacare for a family of five would be $20,000. And the penalty for not buying that coverage: $2,400.
Here’s the language from the IRS:
“Example 3. Family without minimum essential coverage.
“(i) In 2016, Taxpayers H and J are married and file a joint return. H and J have three children: K, age 21, L, age 15, and M, age 10. No member of the family has minimum essential coverage for any month in 2016. H and J’s household income is $120,000. H and J’s applicable filing threshold is $24,000. The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000.
“(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 – $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12)).
“(iii) The sum of the monthly penalty amounts is $2,400 ($200 x 12). The sum of the monthly national average bronze plan premiums is $20,000 ($20,000/12 x 12). Therefore, under paragraph (a) of this section, the shared responsibility payment imposed on H and J for 2016 is $2,400 (the lesser of $2,400 or $20,000).”
So much for affordable.