Sticker Shock and Government Subsidies


With the launch of the Obamacare exchanges, sticker shock is becoming a regular occurrence for the American people. From the Orlando Sentinel:

How much will insurance cost?

That depends — on where you live, your age, family size, income, what level of coverage you want and what federal subsidy you qualify for. For a family of four, a bronze plan without subsidies can start at $615 a month in Orange, Osceola and Seminole counties, and $596 a month in Lake County.

And that’s more expensive than current rates?

Much. The OIR figures show many plans costing twice as much, or more, compared with what’s out there for 2013.

For a law that was sold as lowering costs for the American people, this reality is quite disturbing. However, the Administration has countered these absurd increases with taxpayer-paid subsidies:

So I can expect to pay twice as much?

Probably not. The U.S. Centers for Medicare and Medicaid Services estimated that 53 percent of Floridians who are eligible for federal-exchange insurance can get subsidies, and they can make a huge difference. Here’s what agent August Boffa of Isurance said about a 54-year-old Orlando client he helped this week.

“He did get sticker shock because his plan was at, like, $410 a month,” Boffa said. “But based upon his subsidy, he will pay $28 a month.”

Who gets a subsidy?

Income-based subsidies are set up on a sliding scale; single people max out at $46,000, and a family of four at $94,000.

What about those of us who make more than that and can’t get subsidies?

Individuals who purchase unsubsidized coverage can expect to pay a lot more in 2014. Premiums for employer-provided plans are not expected to change significantly, because those are negotiated between the employer and the insurer.

In other words, the health care law will increase costs through government interventions…and then lower them through more government interventions.

This is becoming the norm for Obamacare. From Charles Krauthammer in 2011:

Suppose someone — say, the president of the United States — proposed the following: We are drowning in debt. More than $14 trillion right now. I’ve got a great idea for deficit reduction. It will yield savings of $230 billion over the next 10 years: We increase spending by $540 billion while we increase taxes by $770 billion.

He’d be laughed out of town. And yet, this is precisely what the Democrats are claiming as a virtue of Obamacare.

Obamacare was sold to the American people as a law that would decrease costs and help the nation’s financial situation. It’s clear now that it will increase costs, and worsen the fiscal problems America faces due to its enormous subsidies.

And for those who aren’t subsidized or covered by employers, the Sentinel rightly notes your premiums are going through the roof.

Higher costs, more spending, and more taxes – no wonder the American people still oppose Obamacare.