...For households with income between 100 percent and 133 percent of the poverty level, for example, insurance premiums are capped at 2 percent of household income. From there, the cap gradually rises until it tops out at 9.5 percent of income for households making between 300 percent and 400 percent of the poverty level.
For households with incomes over 400 percent of FPL—even just $1 over, according to the IRS—there is no cap on the percentage of their income they can be made to pay for their Obamacare-mandated health-insurance premiums.
“ACA will provide premium credit support scaled to individual and family income relative to poverty such that eligible families and individuals’ premium contributions will be limited from 2.0 percent to 9.5 percent of income,” explained the Congressional Research Service. “Individuals and families with income at or above 400 percent of poverty will be ineligible for premium credits.”..
CNSNews.com put a hypothetical family of five through the Kaiser Family Foundation subsidy calculator. In this family, there were three children and a mom and a dad who were both 56 years old--and who did not smoke.
This hypothetical family started out with an annual income of $110,280—exactly 400 percent of the Federal Poverty Level. According to the Kaiser Family Foundation subsidy calculator, their total annual premiums for an Obamacare-approved “Silver” health-insurance plan were $19,832. Under the Obamacare subsidy regulation, this family would be required to pay $10,477 of that premium—which equals 9.5 percent of their household income, the Obamacare cap on premiums for people earning between 300 percent and 400 percent of the Federal Poverty Level.
The rest of this family’s annual premium--$9,355—would be covered by the federal government in the form of subsidy payments that the Treasury would send directly to the family’s insurance company.
But, continuing our hypothetical example, this mom and dad each get a 50-cent raise in their annual salaries. As a result of those 50-cent raises, their household income climbs an entire dollar to $110,281—putting their household income exactly $1 over 400 percent of the Federal Poverty Level.
When this $1 increase in household income is plugged into the Kaiser Family Foundation subsidy calculator, the calculator accurately notes that the family no longer qualifies for Obamacare’s 9.5-percent-of-household income cap on their health-insurance premiums.
According to the calculator, the family’s total annual premium for their Silver health-insurance plan remains $19,832. Now, however, because they earn too much money to qualify for the federal subsidy, they must pay every penny of that $19,832 premium. As a result, the cash they must pay out of pocket for their health insurance plan goes from $10,477 per year to $19,832 per year, an increase of $9,355...
We see this all the time with otherwelfaresocial programs as well. When an additional dollar of income results in more than a dollars worth of lost benefits, the net income for the individual goes down, and so the incentive is not to increase productivity, never climbing lifes' ladder. This is one of the ways in which we keep the poor, poor. We make it too expensive for them to try to get not-poor.
Treating the Subsidy as a Cap on Premiums paid by the individual:
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Obamacare has a massive marriage penalty, too, which will help contribute to the massive number of children raised in single-parent homes. Children raised such are at significantly higher risk for every possible form of social malady, and statistically suffer the consequences their entire lives.
So, just to reiterate: it's going to keep people from increasing their productivity (or cause them to decrease productivity in order to find ways to hide income, or receive it in tax-free manners), and it's going to screw over the next generation of poor kids, more of whom will be raised in single-family homes than otherwise would be.
Say it with me: Train. Wreck.
We see this all the time with otherwelfaresocial programs as well. When an additional dollar of income results in more than a dollars worth of lost benefits, the net income for the individual goes down, and so the incentive is not to increase productivity, never climbing lifes' ladder. This is one of the ways in which we keep the poor, poor. We make it too expensive for them to try to get not-poor.
We see this all the time with otherwelfaresocial programs as well. When an additional dollar of income results in more than a dollars worth of lost benefits, the net income for the individual goes down, and so the incentive is not to increase productivity, never climbing lifes' ladder. This is one of the ways in which we keep the poor, poor. We make it too expensive for them to try to get not-poor.
Treating the Subsidy as a Cap on Premiums paid by the individual:
[/FONT][/COLOR][/FONT][/COLOR]
Obamacare has a massive marriage penalty, too, which will help contribute to the massive number of children raised in single-parent homes. Children raised such are at significantly higher risk for every possible form of social malady, and statistically suffer the consequences their entire lives.
So, just to reiterate: it's going to keep people from increasing their productivity (or cause them to decrease productivity in order to find ways to hide income, or receive it in tax-free manners), and it's going to screw over the next generation of poor kids, more of whom will be raised in single-family homes than otherwise would be.
Say it with me: Train. Wreck.
I am certain that you are extremely upset that a family making more than 100k/yr is not getting a govt entitlement
Because right wingers hate it when people do not get entitlements. They're all about giving entitlements to more and more people :roll:
What, do you not understand the perverse incentives created by a subsidy cliff?
You'd need to work a lot more to compensate for the financial setback the subsidy cliff creates for you.
And many families this scenario applies to will simply choose not to. They'll cut back on their hours, be willing to let their salary stagnate, or have one parent continue to stay home when going back to work would otherwise be an option.
I'm not so foolish as to believe that someone will give up more than 100K in income in order gain 9K in subsidies.
So it's an incentive to work harder?
So they'll risk losing their 100K+ job in order to save 9K?
Well you clearly haven't even grasped what we're talking about here. No one is suggesting that's how this works.
No, it's an incentive for certain people (at certain salary levels with certain insurance options) to intentionally work less.
Dude, no, just read up on it for Christ's sake so that you can figure out what we're talking about.
Start here if you need to.
No, it's because you're posting nonsense
People who work for a salary generally don't have a choice to work fewer hours, and even if they do, they get paid a salary. Either they will get fired and lose all their income, or they'll keep their job and lose none.
The self-employed will not jeopardize their businesses by working fewer hours or else the competition will take their business.
Your argument may sound sensible in the bizarro right wing fantasy land, but it bears no relation to reality
You're refusing to read about this and understand its effects. People can easily negotiate pay cuts to their own salaries if it will leave their family with a better bottom line.
One parent can continue to stay home and not work if their family is earning close to one of those cliffs.
There are plenty of ways to voluntarily work (or earn) less to not have to get hit with the financial setback this policy creates for some families.
Here's another: for those who are not too close to the cliff, and who have insurance options at 9.5% of their income, and others that cost even more (and, say, offer more coverage), what do you think they will choose? The cheaper policy? Nope. They'll choose the more expensive policy because it doesn't cost them any more money (it's subsidized). So there's another perverse incentive: some families will voluntarily choose the more expensive policy, and the insurance company is rewarded by this because more customers are choosing their more expensive offerings thanks to the subsidy.
Good! They'll be making the economy more efficient
This is bad...how?
And someone else will work the job, reducing unemployment.
This is bad....how?
And they will get better coverage in return.
This is bad....how?
Middle class people voluntarily undermining their own earning potential thanks to an arbitrary and ****ty policy? I dunno, you tell me.
Further impeding women's incentive to return to work after having a child? I didn't realize you were such a social conservative.
It rewards higher insurance prices (2nd time I've had to point it out now).
I've given you all the info you should need to be able to comprehend the inherent problems in this, and you're just intentionally playing dumb to it.
No, you tell me.
So you assume it will be the woman who stays at home?
It also rewards better insurance coverage. That's a good thing
If you think it's a good thing that middle class people undercut themselves professionally to avoid federally imposed financial setbacks at certain specific earning levels, then I'll let you own that one.
More often than not.
No, it encourages more expensive insurance. If coverage is marginally better but significantly more expensive, people wouldn't buy it if they were the ones paying for it. With the subsidy, they'll accept marginally better coverage at virtually any price because it's not costing them any more.
You haven't shown that middle class people will undercut themselves professionally.
You are now reduced to making up nonsense about how the better insurance will be significantly more expensive but only marginally better.
Your arguments may sound good in right wing fantasy land, but they have no relation to reality
It has been explained in detail, with links to these comprehensive explanations, that certain families would be financially rational to do so (i.e. it would be better for their bottom line). If you're counting on the guess that these families will not act rationally, that's your prerogative.
From the get-go you have been reduced to feigning ignorance to everything being discussed in this thread. You started off asking why someone would forego $100,000 to save $9 grand in subsidies, which displays profound ignorance to this topic. Since then you've just been calling bull**** because you refuse to think.
If you sold a product and could increase its quality marginally while increasing its price substantially, without affecting your consumers' demand for it despite its higher price (thanks to the subsidy), would you go that route? Or would you just be charitable about it? Are you betting on the charitability of the health insurance industry?
I've paid out nearly $1000 this year to her heart doctor and hospital.
Speculating about what people might do is not the same thing as proving that they will do that.
And you have not shown how such decisions would be rational
I like you. I really do, but....
You've earned a very large picture of a very small violin
If you like me so much, why don't you tell me what your issue is with my post? I warned you it was anecdotal and I think it illustrated the ":cliff" issue rather well. So, why the violin?
Fair enough.
Given your financial position, I'm not sympathetic that you have spent $1000 over the last year.
I think there's a world of difference between your wife, who is married to someone who has made it clear that he is far from poor, and someone who is genuinely poor. I also think it's not realistic to compare someone on public welfare (with it's extremely low income thresholds) and a family with more than 100K in income.
The welfare recipient is facing a decision about money in a situation where every dollar counts. A couple with a 100k+ income is not in a similar situation.
Ah, I got it now. She is my ex-wife and I have not been married to her since 1982. My point wasn't that I spent $1000 on hr medical expenses. I have $1000 and for some reason am willing to spend it on her despite the many years we have been apart.
The point I was trying to make was how screwed she would be if she didn't have such a nice ex-husband and how abruptly she arrived at the cut-off point. Now I hope it will make more sense. Most people with a $900 monthly income would suffer from that $20 raise if they didn't have an "angel" to save them. We're discussing a $10,000 a year income in her case, not $100,000 a year income.
Fair enough.
I'll just say that I have far more sympathy for those like your wife who don't have someone like you in their lives than the couple who are making 100k+ per year.
And I believe that many of the people complaining about this issue (you excepted) don't give a damn about the hardships the poor face due to this cliff and that their preferred solution is to eliminate the welfare in order to eliminate the cliff.
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