Posts Tagged ‘federal poverty level’

December 19, 2012

Health Care News

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12 Days of Obamacare Surprises: Exchange Subsidies

Photo: Dominique Bruneton/Altopress/Newscom

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 9 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.

The federal government will provide subsidies to offset the cost of coverage in Obamacare’s new exchanges for those with incomes between 100 percent and 400 percent of the federal poverty level.

In 2010, the Congressional Budget Office (CBO) projected that exchange subsidies would average $6,000 per enrollee in 2019, for a total cost of $113 billion.

In 2012, the CBO updated its projection for an average subsidy cost of $6,470 per enrollee in 2019. The total cost of subsidies and related spending is now projected to be $137 billion in 2019.

Surprise: With premiums higher than initially anticipated, the average subsidy is now projected to cost $470 more per person in 2019 alone. This increase in projections of about 8 percent is an indication that both health care premiums and the cost of Obamacare will continue to rise faster than reindeer take flight!

Read the rest on The Foundry…

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November 8, 2011

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Love Conquers All…Except Obamacare

Thanks to Obamacare, Americans looking to tie the knot may find that it’s a lot cheaper to stay single.

Last week, the House Oversight Committee released a report and held a hearing to unpack its subject matter: a hidden penalty on marriage created by the structure of the Patient Protection and Affordable Care Act’s (PPACA) tax subsidies for low- and middle-income Americans to purchase health insurance.

Obamacare’s new tax subsidies are linked to the federal poverty level, discriminating against married couples by failing to increase proportionally with household size. Heritage research has shown how two individuals could qualify for more financial assistance to purchase health insurance individually than as a couple, leading many to forego marriage altogether. The difference could amount to several thousand dollars.  (Read the rest on The Foundry…)

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June 20, 2011

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Obamacare’s Premium Subsidies Will Stifle Small Business

As small business goes, so goes the economy. They have been responsible for creating almost two-thirds of all net new jobs over the last 15 years. Indeed, one reason Obamacare is such a concern is that it will significantly reduce the incentive for small businesses to hire. Especially once the premium subsidies become available in 2014.

The premium subsidies are Obamacare’s way of making health insurance more affordable for low-income earners who buy coverage in the new exchanges. Eligibility for a subsidy is limited to people who lack public or employment-based insurance and have incomes less than four times the poverty level. The values of the subsidies are set so as to limit the amount one contributes towards insurance as a percent of income.

The actual implementation, however, is complex.

Say you’re under 65 and not on Medicaid (or CHIP), and the year you would be eligible to purchase insurance through an exchange is 2014. Your premium subsidy is determined by your income and family structure from two years earlier (in this case, 2012), applied against the poverty level for the calendar year in which you purchase the insurance (2014).

The consequences of this complicated formula are far worse.  (Read the rest on The Foundry…)

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April 27, 2011

Health Care News

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Obamacare Takes a Double Shot at the Economy and the American Dream

In a recent piece for The Wall Street Journal, Daniel Kessler, a senior fellow at the Hoover Institution, describes how the new health care law’s subsidy program to help low- and middle-income Americans purchase health insurance will have severe economic consequences. These will include discouraging work for qualifying individuals and other taxpayers, disrupting America’s labor markets, and reducing economic activity.

Beginning in 2014, when the new health insurance exchanges will open for individuals and small businesses, subsidies will become available for those whose income falls between 134 percent and 400 percent of the federal poverty level (FPL). For a family of four living in a high-cost area, earning 134 percent of the FPL ($31,389 in 2014 dollars) would qualify them to receive $22,740 in assistance. A similar family earning an income at 400 percent FPL ($93,699) would qualify to receive $14,799 in subsidies.

The problem is that as income increases, families will experience large reductions in government assistance, which will discourage striving to earn a higher income. (Read the rest on The Foundry…)

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December 14, 2009

Health Care News

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Employment Discrimination in the Senate Health Care Bill

The Senate health care bill includes a well-known “employer mandate” provision that would require employers to offer “qualified” health plan and pay 60% of the premium, or pay an annual tax penalty of $750 per full-time employee.

What is less well-known is that the provision would also tax companies even if they do offer insurance – but only if they hire people from low- and moderate-income families who qualify for, and elect to accept, premium subsidies. And the tax penalty for hiring those employees – arguably the people who need jobs the most – would be a whopping $3,000 per year.

Who would qualify for such a subsidy?
There are two criteria. First, family income – not how much this employee is paid by this company, but total family income – would have to below four times the federal poverty level (FPL). The FPL depends on family size; for 2009 four times the FPL would be $43,320 for a single adult with no children and $88,200 for a family of four (regardless of whether it’s a single parent with three children or two parents and two children). (more…)

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