• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • For Low-Income Families, Obamacare Is the UNAFFORDABLE Care Act

    Protesters oppose Obamacare at Supreme Court

    Newscom

    Yesterday the Associated Press published an article summarizing how Obamacare’s supposed benefits may well turn out to be a mirage for many low-income workers:

    It’s called the Affordable Care Act, but President Barack Obama’s health care law may turn out to be unaffordable for many low-wage workers, including employees at big chain restaurants, retail stores and hotels….Because of a wrinkle in the law, companies can meet their legal obligations by offering policies that would be too expensive for many low-wage workers. For the employee, it’s like a mirage — attractive but out of reach.

    The company can get off the hook, say corporate consultants and policy experts, but the employee could still face a federal requirement to get health insurance.

    Here’s how it could work: Obamacare includes numerous mandates that will raise premiums. CBS News reported this week that one survey of employers showed “Obamacare may cost more than previously thought” for many firms. Due to these new mandates, some employers may feel forced to scale back the employer’s percentage of premium costs. But as long as the employer’s insurance policies cost less than 9.5 percent of an employee’s income, the employer will not face taxes under the employer mandate—and the employee will not qualify for subsidies on the exchange.

    The end result could be a no-man’s land for many low-income workers. The AP notes that a worker making $21,000 could face premium costs of as much as $1,995—and that coverage would still be viewed as “affordable” under Obamacare’s standards. In reality, the worker may not be able to pay that much in premiums—but under the law would have no other coverage option.

    That’s not the only way Obamacare harms low-income families. The non-partisan Congressional Budget Office (CBO) concluded that under Obamacare, many workers could work fewer hours or give up working altogether. Thanks to the law’s perverse incentives, which according to CBO “will effectively increase marginal tax rates,” work will be discouraged.

    What has been the Administration’s reaction to the plight of low-income families? In a word, complacency. From the AP:

    White House senior communications advisor Tara McGuinness downplayed concerns. “There has been a lot of conjecture about what people might do or could do, but this hasn’t actually happened yet,” she said. “The gap between sky-is-falling predictions about the health law and what is happening is very wide.”

    American families of all incomes deserve better than to be placed in a poverty trap that deprives them of health coverage while simultaneously discouraging work. They deserve better than Obamacare.

    Posted in Obamacare [slideshow_deploy]

    Comments are closed.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×