Should the Affordable Care Act be repealed so that over a
million people making more than $123,000 per year can avoid paying $3,000 in
taxes beginning in 2016? And should they
be allowed to pass on the cost of their health care to everyone else?
This week, a
local newspaper quoted a lifelong Florida Democrat as saying she might vote
for Mitt Romney because she believed ACA offered “a costly giveaway to
freeloaders.”
The irony is that the law actually does just the opposite –
and Mitt Romney knows this better than most.
It requires nearly all health care “freeloaders” either to get insurance
or pay a tax penalty.
Eighty percent of those affected will get insurance. But the Congressional Budget Office reported
last week that it expects 6 million people to owe the tax penalty beginning
in 2014. The $8 billion the penalty will
eventually raise will help defray the cost of uncompensated care.
Six million people make
up less than 2% of our total population.
Should the Affordable Care Act be repealed because of them?
Like that Florida Democrat, at least half of us seem to
think so.
According to a CNN poll taken
just after the June Supreme Court decision upholding the tax penalty, 51%
opposed the so-called individual mandate.
According to a Kaiser
Family Foundation July tracking poll, 61% opposed collecting the tax
penalty. And according to a Rasmussen
poll released this week, 52% still want to repeal the whole Act, largely
because of this provision.
Just who are these 2%,
for whom our collective hearts bleed?
They are hiding among the 30 million people who will still be
uninsured after the Affordable Care Act takes full effect.
The vast majority of those 30 million are exempt from the
mandate, because they are Native Americans, undocumented immigrants,
individuals who are so poor that their insurance premiums would exceed 8% of
their income, and people who will be granted hardship exemptions.
The remaining 6 million comprise the 2%. And most
are fairly well-off. In today’s
dollars:
- 69% have Adjusted Gross Incomes (AGIs) of at least $46,100 for a family of four, roughly equal to the median household income in America;
- 49% have AGIs of at least $69,150;
- 31% have AGIs of at least $92,200; and
- 20% have AGIs of at least $115,250.
How much will it cost
the 6 million to buy health insurance?
Not as much as you might think.
Beginning in 2014, a family with $69,150 in income will get
a tax credit of
$10,385 if they have to buy their own health insurance, limiting their
total net insurance cost to just under $540 per month.
And families with incomes of $46,150 will get tax credits of
$14,014. They’ll pay just $237 per month
net for their health insurance.
The 2% is made up almost entirely of these two groups. The first is people with six figure incomes who
can afford to buy insurance. The second
is lower income people who will be offered tax credits so big that their net
cost of insurance will be far less than what many people are paying out-of-pocket
today.
What these two 2% groups
have in common is a sense of entitlement – a belief that if they become
seriously ill then the rest of us should pay their health care bills as well as
our own.
Or, as Mitt Romney characterized it for Glenn Beck in 2007, they
want “free care paid for by you and me.
If that’s not a form of socialism, I don’t know what is.”
Is that fair?
As the Affordable Care Act is written, the free ride ends. 1.2 million wealthier
people who today make more than $115,200 per year and choose not to buy health
insurance will pay, on average, a tax penalty of around $3,160 per year when
the penalty is fully phased-in in 2016 – to help cover health care costs that
average more than five times that.
And the 1.2 million middle-income people making between
$46,100 and $69,150 will pay a tax penalty averaging around $583 per year
– about the same as what other middle income people will pay for insurance
every month or two.
Maybe people who oppose the penalty think it is too
small. I doubt it.
I think they’ve more likely been mesmerized by the wizardry of
politicians and pundits, who are using the cloak of repeal to protect an
entitled 2% at the expense of everyone else.
Questions or comments? Post them below, or email gionfriddopaul@gmail.com.
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