Have no fear of ‘Obamascare’
October 16, 2013
Yes, "Obamascare," the well-funded strategy designed to shape public opinion through a desperate assault armed with nothing but half-truths and flawed reasoning.
It is even worth shutting down the federal government, which coming from those that seem to be hell-bent on destroying civil government should come as no surprise.
It is extremely unfortunate that such an important piece of social legislation designed to assist a majority of families and correct monopolistic market failures in the health care system is frantically being misrepresented by supposedly reputable sources but who are apparently nothing but political hacks. Recent articles by the Associated Press, Wall Street Journal, and Forbes are so filled with partisan spin that one hesitates to consider them true journalism.
These anti-government forces have suggested that Obamacare will raise the cost and lower the quality of medical insurance for practically everyone in the country. As usual, the message is usually directed to elderly people and lower-income people of all ages. With so many people falling into this category due to demographic trends, corporate consolidation and foreign labor competition and who hardly have the means or time to research the truth due to their circumstance, this is a large voting constituency ripe to be duped, or so they hope. What a diabolical and desperate bunch of rascals we have here.
Aside from administering a daily dose of obfuscation, the basic strategy of the opposition is never to bring the effect of the federal income tax credit into the equation. The hope is that readers will be so bamboozled by a warped presentation of Obamacare's provisions that they will not think to notice that the main feature of the act was dropped. Much to the chagrin of the sore losers, even the unsubsidized, open-market rates for all age groups have been reduced in many states, including California, because of the assault by Obamacare on the monopoly that we have been subjected to for far too long.
Let's be clear — monthly premiums will be heavily subsidized for anyone making less than these estimated thresholds: $46,000 for an individual, $62,000 for a family of two, $79,000 for a family of three and $95,000 for a family of four. These thresholds relate to 400 percent of the Federal Poverty Level. Most Nevada County households fall under these thresholds due to a number of factors, including the large percentage of retirement-age people who typically have modest incomes drawn from significant assets, which are disregarded in the determination of eligibility for the tax credit.
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What if you generally don't have to pay much federal income tax? Well, you don't even have to owe federal income tax in order to receive the amount of the credit. You also won't have to wait to get your tax credit the next spring; your credit will act to reduce your monthly payment through the exchange, Covered California, which simply passes your credit piece-meal from the Treasury to the insurer each month.
For self-employed or retired people, 10 years ago, a 50-year old person would have paid at least $500 per month for an individual plan that paid about 70 percent with a large deductible, even if in good health. Now, assuming a wage of about $12 per hour, this person will only pay about $130 per month and with a smaller deductible! Even at $20 per hour, the subsidized premium would only be $330 per month. In most cases, employees in small businesses would be better off asking their employer to discontinue health coverage, add the amount paid on their behalf to their salary and just buy insurance through the exchange.
I highly recommend going to the Kaiser Foundation website at http://kff.org/interactive/subsidy- calculator and enter your household information for an easy and quick read of what premium you can expect. After getting a feel by entering different scenarios, go to the Covered California website to ask further questions or to start the enrollment process.
Make sure to avoid barely exceeding the income limits. Your accountant may be able to suggest ways to defer recognizing income until the following year or other strategies. To fail in this regard means losing more than $5,000 for an individual and more than $13,000 for a family of four. Really! The stated thresholds are estimates only, requiring some research each year to identify the actual target number.
Woe unto anyone foolish or unfortunate enough to come in at 401 percent of the FPL.
Jim Ciaffoni, a semi-retired public utilities manager, lives in Nevada City.