Silly stupid numbers

Betsy McCaughey:

The Affordable Care Act is looking less and less affordable. Start with the IRS’s new estimate for what the cheapest family plan will cost by 2016: $20,000 a year to cover two adults and three kids. And that will only cover 60 percent of medical bills, so add hefty out-of-pocket costs, too. The next surprise is for parents who thought their kids would be covered by an employer. Sloppy wording in the law left that unclear until last week, when the IRS ruled that kids won’t be covered.

Starting in 2014, the law will require employers with 50 or more full-time employees to offer coverage or pay a penalty. “Affordable” coverage, that is — meaning the employee can’t be told to contribute more than 9.5 percent of his salary. For example, a worker earning $40,000 a year cannot be required to pay more than $3.800.

But the law doesn’t specifically mandate family coverage — and now the administration says that won’t be required. You can see why: If the lowest-cost family plan (again, two adults and three kids) is to run a whopping $20,000, and if the employee’s contribution is limited to $3,800, the employer’s tab would be $16,200 — adding about $7.40 an hour to the cost of that employee. Wisely, the IRS announced on Jan. 30 that employers won’t have to pay for dependents.

But the Congressional Budget Office’s much-cited prediction that ObamaCare would leave only 30 million people uninsured by 2016 was based on the assumption that kids would be covered by employers…So how will the kids be covered? They won’t. The IRS shocked the law’s advocates by announcing that the insurance exchanges won’t provide subsidies for a child whose parent is covered at work. Nor will these parents be penalized for not insuring their children — the IRS will kindly consider the kids exempt from the mandate.

Between this and the economy, expect a lot of misdirection over the next couple of years.

One Response to “Silly stupid numbers”

  1. Andrew_M_Garland Says:

    Possibly the most wonderful economic discovery by politicians is that they can tax workers through their employment while confusing everyone. Workers don’t seem to care, because these are taxes “on employers”. They may even applaud these taxes. Workers blame the “stingy” employer when their wages go down, instead of blaming the government.

    Politicians trumpet that they are only taxing stingy businessmen, who should be offering health care as a matter of simple morality.

    Health Insurance Or Cash

    The message from the main stream media is that “capitalism” has led to stagnant or even lowered take-home pay, while the government takes as much from employment as it can.

    Government has the nerve to charge businesses 5% of wages for “unemployment insurance”; workers don’t figure out that all wages are 5% less to pay for this tax “on employers”.

    Social Security is supposedly only 7.65% paid by the worker, and matched by the employer. Wages are 7.65% less to match the employer “contribution”. Workers are paying the full 15.3% taxed by the government, half in explicit taxes and half in lower wages.

    The IRS and the Obama administration are scrambling to interpret the Afordable Care Act so that it doesn’t lead to massive layoffs and business failure. The government cannot indirectly force employees to pay much more for health insurance. Employees end up paying almost all of the increased taxes and penalties placed upon employers because of employing people. The employee is fired if he cannot pay, and the business fails if it needs those employees.

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