The Obama administration Monday unveiled a tax cut for small companies that provide health insurance, but business groups gave it a mixed review: Many small businesses won’t qualify for the tax credit, they say.
A new study by a former head of the Congressional Budget Office says that ObamaCare would make dropping employees’ insurance the sensible choice for the employers of up to 35 million workers — with the workers’ concurrence. These workers would flood into the government-run exchanges, which would then cost about $1 trillion more than projected over the next decade — essentially doubling ObamaCare’s published price and leading to massive new debt. Once in the exchanges, workers would find that their upward economic mobility would be strongly limited by the exchanges’ extremely high effective marginal tax-rates.
We’re about to enter a new age of chronic under-reimbursed care.
As this slide-show depicts, subsidies provided through ObamaCare for lower- and middle-class workers who receive health-care through the government-run exchanges would be much greater than the tax-breaks provided to lower- or middle-class workers who receive employer-provided health insurance. This would lead employers to drop these workers’ insurance and let them be covered through the exchanges, at taxpayer expense. Thus, ObamaCare is not only a new health-care system but a new welfare and tax system, which would lead to the segregation of the labor market: upper-income workers would continue to get insurance through their employers; lower- and middle-class workers would eventually get it through the government.
Under Obamacare, getting married would cause couples to lose large amounts in insurance exchange subsidies. Depending on their ages and incomes, married couples would lose up to three-quarters of their exchange subsidies and up $10,425 a year that would be available to couples who simply live together.
Subsidies in ObamaCare’s government-run insurance exchanges would dwarf tax-breaks for employer-provided insurance, with many families in the exchanges getting $10,000 more in subsidized coverage than families of identical size and income with employer-provided insurance would get in tax breaks. This would likely lead to far more people finding ways to jump to the exchanges than the Congressional Budget Office has forecast — which in turn would raise ObamaCare’s costs far beyond official projections.