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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Cohn: Obamacare Critics Dodge Act’s Key Benefit

From Jonathan Cohn’s post “The Big Savings Obamacare Critics Miss” at The New Republic about a new study for the Kaiser Family Foundation conducted by by Larry Levitt, Gary Claxton and Anthony Damico.:

The authors start by figuring out what the initial, upfront cost of insurance will be for people buying coverage on the exchanges. Based on Congressional Budget Office projections, the average across all households–that is, indivdiuals and families, of all ages–works out to $8,250 a year. That’s not a bad price for comprehensive coverage: It’s in the same ballpark as policies that employers provide employees. Still, it’s more than some families buying coverage on their own might pay today, because they have skimpy policies or benefit from preferential pricing for the healthy. thatObamacare prohibits. That’s why conservatives insist people won’t want to sign up for Obamacare’s insurance options.
…According to the Kaiser study, the subsidies on average will reduce premiums by $2,672, or about a third of the price. The averages mask a lot of variation, with more affluent people getting less assistance and less affluent people getting more assistance. People with incomes of more than four times the poverty line, or about $94,000 for a family of four, get no discount at all. That’s one reason why some people really will pay more for their insurance next year.
Still, the number of people receiving discounts is a lot larger than even many analysts seem to realize. It turns out that about half the people who buy their own insurance today will be eligible for subsidies. For them, the subsidies will be worth an average of $5,548 per household, effectively discounting the price by two-thirds…Keep in mind that people who choose less expensive options, like those that cover fewer expenses, will pay even less for their coverage.
“It makes sense to look at what people will pay for health insurance after taking tax credits into account, just like we do for things like 401(k) plans, child care, or educational expenses,” Levitt [one of the study’s authors] told me. “The law provides a surprising amount of financial relief for people who are buying their own insurance today, not to mention the uninsured, who tend to have lower incomes.” Len Nichols, a health economist at George Mason University, agrees. “In many ways, what the ACA is about is extending premium tax breaks to those without good employer offers today, and doing so through a sliding scale that provides the most help to those who need it most.”

No surprise that this all-important benefit is not addressed by GOP repeal advocates. Dems would be wise to not let them get away with this ‘oversight’ so easilly.

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