There Are Still So Many Questions to Answer

If you’re following me on Twitter, you already know I’m a little annoyed at how the Supreme Court watch has turned into a sideshow. I’m frustrated every time this turns into a game. If the law is overturned, we are going to be back where we started. If it’s kept in place, there is still so much to do. Spending our time treating this like a circus gets us nowhere.

Here’s an example. What are we going to do about the issue of people whose salaries come close to the edges of the subsidies? I’ve covered this before, but evidently the Kaiser Family Foundation has updated their Health Reform Subsidy Calculator in the last few days, allowing me to make this point more explicitly.

Scenario one: It’s 2014. You are 35 years old, married, and have two children. You live in a area with medium regional cost factor, and you can’t get employer based coverage. Your income is $93,699, which is just under 400% of the poverty line.

In this scenario, your required premium contribution is $8901, as your government subsidy of $2202 covers the rest.

Scenario two: It’s 2014. You are 35 years old, married, and have two children. You live in a area with medium regional cost factor, and you can’t get employer based coverage. Your income is $93,700.

In this scenario, your required premium contribution is $11,104, as you get no subsidy.

Anyone else see the problem? There’s an incentive for you to make less, as making $1 more (before taxes) costs you more than $2200 in after tax dollars. That’s crazy. That has to be fixed.

It’s even worse at the other end.

Scenario three: It’s 2014. You are 35 years old, married, and have two children. You live in a area with medium regional cost factor, and you can’t get employer based coverage. Your income is $31,155, which is 133% of the poverty line.

In this scenario, you get Medicaid. You owe nothing in premiums. Insurance is essentially free.

Scenario four: It’s 2014. You are 35 years old, married, and have two children. You live in a area with medium regional cost factor, and you can’t get employer based coverage. Your income is $31,156.

In this scenario, your required premium contribution is $960, as your government subsidy of $10,144 covers the rest.

Hey, lucky guy at 133% of the poverty line. We’re going to give you a $1 raise in your pre-tax income! But it’s going to cost you more than 3% of your income in post-tax dollars. What? You don’t want that raise? Of course you don’t.

Go try out the calculator for yourself. We’ve still got a lot of things to fix. I wish we could get started.

[Cross-posted at The Incidental Economist]