Liberals Proclaim Obamacare Rate Shock No Big Deal, Since Other People Pay For It

by William Teach | June 20, 2014 8:10 am

Well, of course they do. They’re all about Someone Else bearing the burden for the insane policies of Liberals

(Avik Roy, Forbes[1]) Over the past twelve months, there has been an energetic debate among health policy researchers about the extent to which Obamacare will increase the underlying cost of individually-purchased health insurance: what observers have come to call “rate shock.” Yesterday, the Manhattan Institute published[2] the most comprehensive study yet on the topic, analyzing premium data from 3,137 U.S. counties, and finding an average rate hike of 49 percent. In response, left-wing bloggers are trying out a new talking point: that rate shock doesn’t matter, because taxpayer-funded subsidies will bear the higher costs.

There are a number of reasons why the underlying cost of health insurance matters. First: not everyone is eligible for subsidies. If your income is above 400 percent of the Federal Poverty Level, you don’t qualify. Second: subsidies don’t always make up for rate shock. If your premiums go up by $200, and Obamacare gives you a subsidy for $120, your premiums have still gone up by $80. Our interactive map[3] explains the interaction of these factors for every U.S. state–just click on the “Who Qualifies?” and “Your Decision” tabs and see for yourself.

Third: subsidies aren’t free. They’re financed by taxes: not just taxes on “the rich,” whoever they are, but on average Americans. So if Obamacare increases the underlying cost of insurance, taxpayers are hit with a double whammy: higher insurance costs for themselves, and higher taxes to subsidize those costs for other people.

This reminds me (again) of one of the quotes of 2013[4] “Of course, I want people to have health care,” Vinson said. “I just didn’t realize I would be the one who was going to pay for it personally.”

I’m struck by how contemptuous the left can be about these issues, especially given the moral obligation of government to spend taxpayer dollars in the most efficient possible manner

The loudest promoter of the “rate shock doesn’t matter because subsidies!” argument is Steve Benen[5], a blogger for MSNBC’s The Rachel Maddow Show. Benen described the Manhattan Institute analysis as “deceptive” because many people “are buying coverage subsidized through Obamacare.” It’s one thing to explain that subsidies will defray the cost of Obamacare-based plans for certain low-income people: they will. But it is economically obtuse for Benen to argue that studying the underlying cost of health insurance is “deceptive.” It’s especially remarkable given that Benen regularly contends that there is a vast “wonk gap” between the right and the left–in the left’s favor.

Mr. Roy also notes that apples and oranges talking point offered by liberals, whereby they claim that costs are totally different, because Ocare requirements mean more coverages. Yet, that breaks down, because the higher costs are a direct result of Ocare mandates, some of which are required by the law itself, some, such as the contraception mandate, were invented by Team Obama. And at the end of the day, real people are affected by the costs of Ocare. Virtually no one is saving $2,500 a year, as Obama and his Democrat minions promised. Most are paying more than they had been previously. Their premiums went up, and are expected to jump more this year. Their deductibles are sky high. Is it really health insurance if you cannot afford the deductible? How many lower middle class folks, forced by law to obtain insurance or pay a fine/fee/tax can afford an average deductible of $5,081?

Liberals think Everyone Else, not themselves, should pay for this boondoggle. Surprise.

Crossed at Pirate’s Cove[6]. Follow me on Twitter @WilliamTeach[7].

  1. Avik Roy, Forbes:
  2. published:
  3. interactive map:
  4. quotes of 2013:
  5. Steve Benen:
  6. Pirate’s Cove:
  7. @WilliamTeach:

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