Here are Casey B. Mulligan’s estimates of the impact of emergency unemployment compensation ending in December 2013:
Jessica Sanford, a self-employed single-mom, was so ecstatic at being able to purchase affordable health coverage for her and her son that she wrote President Obama a fan letter. The president even acknowledged her letter and quoted from it in an October 21 speech.
Ms. Sanford later discovered the state website she had used to calculate her subsidy had made an error:
Originally it said Sanford and her child would get a whopping tax credit that would reduce their total premium to $169 a month. Now the state is telling her it goofed — twice — and she has to pay full ticket. There may even be a third goof involved: At least one health-insurance broker says she may qualify for a tax credit after all, albeit a small one.
According to the Kaiser Family Foundation Subsidy Calculator, family of two with an income of just under $50,000, living in Washington State would be required to spend nearly $4,750 per year on health coverage before it qualified for a subsidy. This is more than double what she was originally told she would be required to spend.
In a Wall Street Journal editorial, Ramesh Ponnuru (American Enterprise Institute) and Yuval Levin (Ethics and Public Policy Center) discuss how to reform health care the right way. Their suggestion is a good one:
The proposal Ponnuru and Levin described is almost identical to the National Center for Policy Analysis’ Alternative to the Affordable Care Act.
Ponnuru and Levin explain:
Conservative policy experts have long proposed such approaches, but Congressional Republicans, with a few honorable exceptions, have not taken them up in recent years…
Some Republicans think that political success requires nothing more than watching ObamaCare fail. But if the new system quickly implodes, that would be all the more reason to have an alternative on hand — other than another leftward move toward single payer. And it might not implode so quickly.
We haven’t said much about it at this blog, but it amounts to $10 billion a year and the unions hate it, as so do many businesses. As Doug Badger explains:
In order to raise this $10 billion, section 1341 of the health care law requires an assessment of $63 on each of the roughly 159 million people who are covered under group health plans. This is a transfer of $10 billion from people who will not get coverage through the new exchanges next year to the estimated 7 million people who will. The money is intended to fund reinsurance arrangements, helping to help pay the claims of people who run up unusually high medical bills.
Badger, who was George W. Bush’s lead health care policy advisor, is critical of this and other transfers to insurers who participate in the exchanges.
This is called making it up as you go along:
What the administration is doing today is probably best described as a tweak to the individual mandate: They are allowing anyone who purchases coverage during open enrollment (up through March 31) to not face a tax penalty for those three months they spent uncovered. This is only true for people who buy coverage through the marketplace. (Sarah Kliff)
[Y]our “adjusted gross income”…can be found on line 37 of your 1040 tax return form. But it requires that you add back certain items like nontaxable Social Security income, tax-exempt interest and foreign-earned income…
The figure also includes income from items like dividends, interest, real estate and retirement account withdrawals. (More)
The 2009-10 peak for marginal tax rates comes from various provisions of the “stimulus” programs in the American Recovery and Reinvestment Act of 2009 and the extension of unemployment benefits to 99 weeks in some states. At the end of 2012, the marginal tax rate index reached its lowest value since 2008: 43.9%. A little over a year later (January 2014), the index will be close to 50%, driven up by the expiration of the payroll tax cut and multiple provisions of the Affordable Care Act. The ACA employer penalty, delayed until 2015, adds more than a percentage point in that year alone, while other ACA provisions strengthen their disincentives for the various reasons cited above.