If you are a family of four living in Brooklyn with a personal pre-tax income of $71,000 a year, good luck trying to pay for health insurance.
Here is the simple math:
If Child Health Plus will be around in 2014, you will pay $90 a month to cover your two children. This is a $1,080 cost for the year; which is indeed very cheap and a great help for taxable families. However, if you and your spouse want to enroll in a middle of the road (Silver) Obamacare Plan, you will need to pay an after-subsidy annual premium of $6,745, excluding your children’s coverage.
The stats are from the Kaiser Family Foundation and I calculated the average premium cost in Zip Code 11211.
A gross personal income of $71,000 a year as a W2 (employee), leaves you with a take-home pay of less than $64,000. If you are a 1099 (independent contractor), your after-tax personal income is less than $58,000. Meanwhile, your section eight-living; Medicaid-covered, Food Stamp-eating, WIC-buying neighbor gets a lucrative $5k-$9K annual tax return, which in addition to his personal income of $32K, leaves him with an income value of above $71,000 when all benefits are added up.
Few in Washington care if your pre-tax personal income is above your neighbor’s because – say – you work 55 hours a week while your neighbor tops out at 35. You are a “taxable person” and as such you are hit with tax and penalties, while your after-benefits neighbor is better off than you.
Buying a Silver plan is not the end of your troubles. You still have co-pays, deductibles, and it covers only 60% of most health-care bills. Worse, many big NYC hospitals don’t even accept Obamacare plans altogether! But if you don’t buy an insurance plan because you can’t afford it, you will pay an Obamacare penalty of 1% of your gross income. On the other hand, your better off neighbor is covered anywhere any time in full by the showing of a Benefit card.
If Washington wants to help provide healthcare for the low-end “taxable class”, here is a very simple solution: The tax liability of those earners should be reduced dollar-for-dollar to what they spend on premiums. You say Government can’t afford to lose revenue? Well, if our “taxable worker” can live on a budget of well below $64K, then so can the better off neighbor. Reform his benefit package and use the savings to cover tax credits for the “taxable” individual. Doing so will pull millions of young, healthy Americans into the insurance pools; a key goal of Obamacare, and with no added cost to the Government will assure insurance coverage to millions more; another key goal of Obamacare.
Some would argue that a large portion of the “taxable individual’s” tax bill is for Social Security and Medicare, thus Government can’t offer an insurance-buying tax credit. But the truth is, money paid into Social Security and Medicare by the better off neighbor is returned to him many times over annually in form of the above-mentioned benefits. If it works for him, it should work for the low-end “taxable individual” too.