Obamacare Cliffs - earn $1 more, lose $9,355 in subsidies

[sangha]

I thought the topic was cliffs and I illustrated that. I didn't bring up the sorrows of $100K a year, more like the sorrows of $10K a year and the abruptness of the cut-offs.

Yes, I realize that now. I was wrong to personalize it as having something to do with your specific situation

My point is that the issue of a cliff for those on welfare, and for those making $100K+ are almost completely different things. This thread is about the latter, and some are trying to make it about the former, as if the two were interchangeable.

 

[cpwill]

I am certain that you are extremely upset that a family making more than 100k/yr is not getting a govt entitlement

Congratulations. I do not think it is possible that you could have misunderstood more. Fantastic trick, that.

 

[specklebang]

Yes, I realize that now. I was wrong to personalize it as having something to do with your specific situation

My point is that the issue of a cliff for those on welfare, and for those making $100K+ are almost completely different things. This thread is about the latter, and some are trying to make it about the former, as if the two were interchangeable.

I think there is a relationship between the two and I would support that the cliff issue should still be taken into consideration and that the loss of benefits should be graduated. So maybe at $70K the benefit should start dropping and by the time you get to $110K it is gone. That would make planning a lot easier and the actual costs would be the same or lower on the government side.

 

[sangha]

I think there is a relationship between the two and I would support that the cliff issue should still be taken into consideration and that the loss of benefits should be graduated. So maybe at $70K the benefit should start dropping and by the time you get to $110K it is gone. That would make planning a lot easier and the actual costs would be the same or lower on the government side.

I would support making the reduction in subsidies more gradual, and I think your idea is a good one.

 

[cpwill]

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.

A) the bolded is not true. Nearly $10K a year is either 2 Roth IRA's, or an annual contribution to college savings for each of their three children. Furthermore, $100k is a very different sum in (say) New York City or the areas surrounding Washington DC than it is in Decatur, Georgia.

B) the underlined, however, is true. And that is why cliffs of this kind hurt them the most. Observe, for example, what happens to a man and a woman with children if they decide to get married so as to raise their children in the most stable environment, one best suited to allowing the kids to escape poverty:

For a recipient of aid, facing a decision about money, in a situation where every dollar counts (as you say) this is a powerful disincentive to take action that will benefit the children, themselves, and ultimately, society. It is a punitively high cost to impost on those who, when facing a decision about money, are in a situation where every dollar counts, for the crime of attempting to be responsible and improve their lot in live.

We already do this for single parents as well:

effectively trapping women with children into low-income, low-skill jobs and low-income, low-skill jobs. This means that they will never be able to accumulate significant resources to focus on their children, housing, you name it. This is one of the ways in which you create cyclical, multi-generational poverty and the loss of social mobility that so many of those on the left decry so loudly and understand so little.

 

[Simon W. Moon]

We see this all the time with other welfare social 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.

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)...

Fwiw & fyi, same phenomenon also happens with tax brackets.

 

[cpwill]

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.

Then you don't have the damedest clue what you are talking about, but are instead spitting vitriol at your opposition because it is emotionally fulfilling and easier than thinking. When you talk about low-income single mothers you are talking about my family. I've qualified for food stamps, WIC, all that crap.

 

[sangha]

A) the bolded is not true. Nearly $10K a year is either 2 Roth IRA's, or an annual contribution to college savings for each of their three children. Furthermore, $100k is a very different sum in (say) New York City or the areas surrounding Washington DC than it is in Decatur, Georgia.

The person on welfare gets no IRA's. The situations of people making 10K a year are not comparable to the situation of those making 100K+

B) the underlined, however, is true. And that is why cliffs of this kind hurt them the most. Observe, for example, what happens to a man and a woman with children if they decide to get married so as to raise their children in the most stable environment, one best suited to allowing the kids to escape poverty:

Correct me if I'm wrong, but this thread is not about increasing subsidies for poor people. It's about Obamacare.

For a recipient of aid, facing a decision about money, in a situation where every dollar counts (as you say) this is a powerful disincentive to take action that will benefit the children, themselves, and ultimately, society. It is a punitively high cost to impost on those who, when facing a decision about money, are in a situation where every dollar counts, for the crime of attempting to be responsible and improve their lot in live.

We already do this for single parents as well:

effectively trapping women with children into low-income, low-skill jobs and low-income, low-skill jobs. This means that they will never be able to accumulate significant resources to focus on their children, housing, you name it. This is one of the ways in which you create cyclical, multi-generational poverty and the loss of social mobility that so many of those on the left decry so loudly and understand so little.

I agree that we should eliminate the cliff that welfare recipients face by increasing the amount of additional income they earn from working.

Do you?

 

[cpwill]

Fwiw & fyi, same phenomenon also happens with tax brackets.

.....no. If they were applied backwards, then you would be correct, but our progressive tax structure is on a marginal basis - meaning that you never lose more money in (income taxes, at least) than you gained in income. If you throw in the EITC (shrug) I haven't done the math.

 

[cpwill]

The person on welfare gets no IRA's. The situations of people making 10K a year are not comparable to the situation of those making 100K+

I qualified for food stamps and I saved for IRA's. Perhaps you are the high income one who does not understand the situation of the low-income?

Nor am I comparing their situations, you continue to misread this post.

Correct me if I'm wrong, but this thread is not about increasing subsidies for poor people. It's about Obamacare.

No, I am simply demonstrating that we have already observed what the effects of subsidy cliffs are - and it is to halt production and create incentives for net-long-term-destructive behavior. Which is precisely what this will do. Someone making 100K in New York is similarly in a very different situation than someone making $100K in Decatur, Georgia.

I agree that we should eliminate the cliff that welfare recipients face by increasing the amount of additional income they earn from working.

Do you?

If by that you mean that you wish to increase the minimum wage then A) you haven't eliminated the cliff at all; you've simply increased the number of workers that it applies to and B) you have priced the poorest and least-skilled of us out of the labor market alltogether and ensured that the only way they can ever earn a living is through illicit employment.

 

[sangha]

I qualified for food stamps and I saved for IRA's. Perhaps you are the high income one who does not understand the situation of the low-income?

Nor am I comparing their situations, you continue to misread this post.



No, I am simply demonstrating that we have already observed what the effects of subsidy cliffs are - and it is to halt production and create incentives for net-long-term-destructive behavior. Which is precisely what this will do. Someone making 100K in New York is similarly in a very different situation than someone making $100K in Decatur, Georgia.



If by that you mean that you wish to increase the minimum wage then A) you haven't eliminated the cliff at all; you've simply increased the number of workers that it applies to and B) you have priced the poorest and least-skilled of us out of the labor market alltogether and ensured that the only way they can ever earn a living is through illicit employment.

The fact that a cliff has a certain effect on low income people does not mean it will have the same effect on a higher income person.

It is my assumption that this thread is about Obamacare, and the cliff it creates when it comes to subsidies for insurance. Therefore I don't see the relevance of the cliff that welfare recipients receive.

 

[cpwill]

The fact that a cliff has a certain effect on low income people does not mean it will have the same effect on a higher income person.

On the contrary - incentives are incentives. When you talk about nearly $10k for a family of five bringing in $100k, depending on where they live, that might be their post housing, food, energy, transportation, education, clothing disposable income. People will respond to a near 10% cut in pay, and families with three children have plenty of costs sucking up that money. Your argument that someone with three kids isn't sensitive to a sudden loss of more than $9,000 is ridiculous.

Your do realize that your own argument (that those with higher incomes do not go to efforts to protect themselves from costs) would belie your claims elsewhere that the wealthy go to great efforts to avoid paying taxes?

It is my assumption that this thread is about Obamacare, and the cliff it creates when it comes to subsidies for insurance. Therefore I don't see the relevance of the cliff that welfare recipients receive.

The relevance is that we have seen the destructive power of cliffs, nor is the only cliff the one that takes place at $100K for a family of five. For the poor, you get punished by Obamacare as soon as you get married, and you see the exact same effects added on to what we are already doing to them.

 

[Greenbeard]

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 (it's subsidized beyond 9.5%). 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.

That's not how those subsidies work. Their value is tagged to the cost of the second cheapest plan available in the silver tier of a market. That means a family that chooses a cheaper plan than that pays less, and a family that chooses a more expensive plan pays more. There's no "cap" in the sense of allowing people to buy any plan they like and not have to pay more than some percentage of their income. The same incentives for buying cost-effective plans, or at least deliberating very carefully before you decide to spend more on a more expensive plan, still exist.

 

[sangha]

On the contrary - incentives are incentives.

Making a claim, and proving it to be true, are two different things

 

[cpwill]

Making a claim, and proving it to be true, are two different things

Setting aside the fact that the portion you chose to respond to was, in fact, a tautology, you do realize that your own argument (that those with higher incomes do not go to efforts to protect themselves from costs) would belie your claims elsewhere that the wealthy go to great efforts to avoid paying taxes?

 

[sangha]

Setting aside the fact that the portion you chose to respond to was, in fact, a tautology, you do realize that your own argument (that those with higher incomes do not go to efforts to protect themselves from costs) would belie your claims elsewhere that the wealthy go to great efforts to avoid paying taxes?

I never claimed that "those with higher incomes do not go to efforts to protect themselves from costs" or that "the wealthy go to great efforts to avoid paying taxes"

 

[Neomalthusian]

That's not how those subsidies work. Their value is tagged to the cost of the second cheapest plan available in the silver tier of a market. That means a family that chooses a cheaper plan than that pays less, and a family that chooses a more expensive plan pays more. There's no "cap" in the sense of allowing people to buy any plan they like and not have to pay more than some percentage of their income. The same incentives for buying cost-effective plans, or at least deliberating very carefully before you decide to spend more on a more expensive plan, still exist.

I stand corrected, thanks for clarifying this.

 

[cpwill]

I never claimed that "those with higher incomes do not go to efforts to protect themselves from costs" or that "the wealthy go to great efforts to avoid paying taxes"

Except that you did. Explicitly, you claimed that a net loss of more than $9K derived from increased productivity would not effect the behaivor of families with three children who earned $100K. If you would now like to retract that statement, I'm fine with letting you do so.

 

[sangha]

Except that you did. Explicitly, you claimed that a net loss of more than $9K derived from increased productivity would not effect the behaivor of families with three children who earned $100K. If you would now like to retract that statement, I'm fine with letting you do so.

Except that I did not.

That's why you can't quote me saying that.

 

[274ina]

more lies of the rich.

 

[274ina]

more lies of the rich.

SAY IT WITH ME!

Affordable HEALTHCARE FOR ALL!!!!!!!!!!!

Sign up OCT 1 !!!!!!

Oh, and weather we all pay $30 or $60 month for HC really does not matter! NO ONE makes over 400% of poverty so your entire argument
is POINTLESS.

A majority ofthe bill is on the MEGA RICH with .9% and 3.2% taxes on all those MEGA RICH FAT INCOMES!!!!!

Please dont complain.........................

Loius the 16th complained..............guess what happened to him!!!! LMAO!!!!!!

 

[274ina]

How about you show us IN THE LAW, not RW media lies. Where the marrage penalty is in the ACA..............

 

[Neomalthusian]

How about you show us IN THE LAW, not RW media lies. Where the marrage penalty is in the ACA..............

Haha, have you ever shown anyone here where anything you say about the ACA actually is in the bill?

 

[274ina]

Haha, have you ever shown anyone here where anything you say about the ACA actually is in the bill?

Yes, by section and page number all the time. Not only do I have a full copy of the law, I HAVE READ IT. ALL OF IT.

See this is the easy way to debunk all the RW lies about the ACA. They can NEVER point out the saction of law that backs up the lying Headline.

Deathpanel!
train wreck!
bla bla bla!
FEAR fear fear!