Oct
03
2013

Is the best #obamacare exchange deal more than $400/year than your current plan? Then eat the tax.

The Las Vegas Review-Journal noted something in passing that struck me:

In California, for the Silver plans offered by Anthem Blue Cross and Kaiser Permanente, the monthly premium for a family of four is nearly $1,000. As one potential online enrollee tweeted, “It didn’t even show me Gold (plan). Probably figure I’d have a heart attack right there.” It did show the bronze plan, at a cost of about $750 per month — along with a whopping $5,000 deductible and out-of-pocket expenses of 40 percent.

It’s much the same in Nevada, with bronze plans ranging from $582 to $745 monthly, and deductibles as high as $6,300 with 40 percent out-of-pocket expenses. And regardless of whether you need an individual plan or a family plan, even with a subsidy, you are looking at a huge increase in premiums and out-of-pocket expenses, with stringent limits on care. Beyond the technical glitches, these plans don’t make financial sense for many individuals and families. It will make far more financial sense to buy a non-Obamacare compliant plan and pay the penalty tax. People will figure that out soon enough — and they won’t be happy about it.

(Bolding mine) In 2014, the Obamacare tax penalty will be 1% of taxable income above $10K.  Assuming a median household income of $50K, that means that if the price differential between an Obamacare-qualifying plan and an existing/potential non-Obamacare is more than $400/year, it makes sense to eat the tax (and vote Republican in November).  And apparently the government didn’t really take into consideration the possibility that rates were going to skyrocket enough in their Potemkin Village of a marketplace.

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