Obamacare’s Stunning Redistribution of Wealth

obama-health-careFor all the attention Obamacare has drawn in recent weeks, few observers have noted that the law is having the unexpected, yet most welcome, effect of transforming scores of millions of Americans, virtually overnight, into generous benefactors of the less fortunate. A real-world example—representative of countless millions of similar situations—will make this crystal clear:

Let’s say that you are a healthy, hardworking 54-year-old single adult in San Francisco earning $45,960 per year—the income level at which federal Obamacare subsidies from your fellow taxpayers are no longer available to help you pay your monthly health-insurance premiums. As a San Francisco resident, you are permitted to choose from among 16 separate Obamacare-compliant insurance plans. Four of these are so-called “Bronze” plans, low-level policies whose average premium will cost you $453 per month, or $5,436 per year. In exchange for those premium payments, a Bronze plan will cover 60% of your medical expenses—that is, after you meet the $5,000 out-of-pocket annual deductible. For this priceless peace of mind, you can thank Obamacare—the Democratic Party’s gift to a grateful America.

Let us contrast your case with that of Joe, another 54-year-old single individual in San Francisco, who happens to be an obese alcoholic and longtime drug abuser with little ambition and no history of ever having held a full-time job for very long. Joe currently earns $15,860 per year, which is just above the income level that would have made him eligible for Medicaid. Because Joe doesn’t qualify for Medicaid, Obamacare stipulates that he must now purchase his own health insurance—thereby proving that, contrary to the shrill rhetoric of conservative naysayers, no one gets an undeserved free ride under Obamacare.

Like you, Joe can choose from among 16 separate plans that are available to San Francisco residents. But unlike you, he is eligible to receive federal government subsidies—money that other, wealthier Americans, such as you, magnanimously “contribute” toward the healthcare expenses of financially “disadvantaged” individuals. If he selects one of the four Bronze plans (whose average monthly premium is $453), Joe qualifies for $452 in average monthly subsidies—meaning that, regardless of which Bronze plan he chooses, he will pay a monthly premium of exactly $1. You read that correctly. The very same healthcare plan that would cost you $453 per month, is available to Joe for $1 per month—i.e., the cost of three oatmeal-raisin cookies at your local Subway sandwich shop. Over the course of a year, you will pay a total of $5,436 in policy premiums, while Joe, who sadly failed to qualify for free healthcare through Medicaid, will pay his own fair share of $12. This is all in the interest of social justice, you understand. And please, don’t even think about whispering that Obamacare might be some sort of “wealth redistribution” scheme, lest you expose yourself as a petulant reactionary who doesn’t give a damn about sick people.

Oh, imagine what a wonderful world it would be if we could somehow transfer this same brand of Obamacare-style fairness to realms other than health insurance. In such a utopia, for example, the $25,000 new automobile that you purchase would cost a deserving soul like Joe just $55. Your $100 nightly fee at a motel would be 45 cents for Joe. And the $25 hardcover book you purchase at Barnes & Noble would set Joe back about a nickel. What’s that, you say? These items aren’t life-and-death necessities, like medical care, and thus don’t serve as useful analogies? Good point! Let’s stick with real necessities, such as food and housing: The same load of groceries that costs you $250 would cost Joe 55 cents. Your $1,200-per-month rent or mortgage payment would be available to Joe for about $2.65 a month. And the $250,000 home you seek to buy could be Joe’s for about $552. Yes, we’re talking about a veritable paradise of fairness!

But let’s return, for a moment, to the subject of healthcare in the here-and-now. Suppose you decide to opt for something substantially better than the aforementioned Bronze plan. As a resident of San Francisco, you can also choose from among four separate Silver plans, which each pay 70% of your medical costs (after a $2,000 annual deductible) and have an average monthly premium of $614. For Joe, these same four plans are available for an average of $38 per month—thanks to the marvelous, magical subsidies that are built into Obamacare. In fact, one of the Silver plans in particular would cost Joe just twenty nickels per month—a darned fair deal for someone needing healthcare, wouldn’t you say? And again, try not to view the disparity between your fee and Joe’s fee as some form of “wealth redistribution,” but rather as an opportunity for you to cultivate the fiscal virtue that our president terms “neighborliness,” whereby those who are “sitting pretty”—like you—extend a helping hand to the “less fortunate”—like Joe. Yes indeed, think about how deliriously happy you’re making good-ol’ Joe!

Now, if you’re feeling somewhat bold and are inclined to seek out even better coverage, you might opt to enroll in one of San Francisco’s four Gold insurance plans, which pay 80% of your medical costs (with no deductibles) and have an average monthly premium of $752. For Joe, the average cost of such a policy is $166 per month.

And then there are the top-of-the-line policies—the four Platinum plans—which will pay 90% of your medical expenses and will cost you, on average, $843 in monthly premiums. For Joe, by contrast, the cost of these plans will run about $258 a month.

So, let’s review: Joe can have the very best coverage available—the type of Platinum plan that our revered overlords in Washington have carefully secured for themselves—for roughly half the cost that you must pay for the most meager, bare-bones, low-end Bronze coverage in existence. Or, alternatively, he can have:

  • a Gold plan for about one-third of what you pay for the Bronze;
  • a Silver plan for one-twelfth of what you pay for the Bronze; or
  • his own Bronze plan for less than four-tenths of 1 percent of what you pay for the same plan.

And why is Joe able to do all this? Because you, my generous comrade, are largely buying his plan for him. Hooray for you! Hooray for advancing the vision that our president so eloquently laid bare just one month ago, when he identified the eradication of “inequality” as the motive that “drives everything I do in this office.” Ain’t it wonderful to be part of such a grand crusade?

And in case you seek additional cause for celebration, rest assured that Obamacare imposes the same type of fairness and equity on family plans as it does on individual plans. For instance, a 54-year-old San Francisco couple with two grown children (ages 19 and 20) living at home—and with a $94,200 household income (the income level at which subsidies are no longer available)—can enroll in a bare-bones Bronze family plan (with an annual deductible of $10,000) for an average monthly premium of $1,175. Meanwhile, an identically structured San Francisco family whose household income is $32,500—just above the level that would have qualified them for Medicaid—can obtain a Bronze plan for precisely $4 per month. Yes, the same plan that costs $14,100 per year for the first family, costs $48 per year for the second family.

The four Silver family plans, meanwhile, have an average monthly premium of $1,593 for the first family, and $81 per month for the second family. Annual outlays would be $19,116 for the first family, vs. $972 for the second family.

This, in a nutshell, is the exquisite beauty of Obamacare: It is redistribution … er, um, er … It is neighborliness on a scale never before seen in this country. And many millions of Americans are poised to reap its glorious benefits! As a form of shorthand, you can simply refer to these fortunate millions as “Democrats,” in honor of the party of benefactors that is, at this very moment, purchasing their eternal political allegiance with your dollars. Take pride in the fact that this wonderful arrangement is but one aspect of the “fundamental transformation” of America that our president is so faithfully pursuing, true to his word. At its essence, it is an arrangement designed to take from certain individuals according to their ability to pay, while giving to other individuals according to their need—a profoundly neat and elegant formula if ever there was one. It almost makes you wonder if anyone else has ever thought of anything like it before.[1]

NOTE:

[1] A central principle of Marxism, popularized by Karl Marx himself, is this: “From each according to his ability, to each according to his need.”

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  • xzr56

    Obamacare desperately needs TWO major improvements OVER ANY OTHERS:

    1. “TEAR DOWN THIS WALL” which segregates America’s health insurance risk pools between the employed and the unemployed. America needs to END SEGREGATION of health insurance risk pools. (Thanks to Ronald Reagan for the inspiring quote!)

    2. Grant EQUAL TAX TREATMENT to all health insurance purchases so individuals can buy health insurance with BEFORE-TAX-DOLLARS just like businesses AND CONGRESS do.

    Pity those middle class Americans who
    are first SEGREGATED into the “UNEMPLOYED RISK POOL” and then forced to
    buy health insurance with AFTER-TAX-DOLLARS, all while getting NO
    SUBSIDIES!

    Talk about ONE HUGE EXPENSIVE TRIPLE WHAMMY — OUCH OUCH OUCH!!!

  • Steeloak

    The immediate logic of Obamacare is to tell the productive people of this country that they are stupid.
    Sit back, take it easy, be a bum, and all will be provided to you! Work hard, save, invest, pay your bills and you will get shafted.
    Its not hard to see what the effect of this will be – lots of people will start taking the easy way, as many already have. Project that out a decade or so & its clear the country will be well along the path to being just like Detroit.

  • vladimirval

    This is Socialism at its worse. As in every socialist state the people footing the bill for those unable or unwilling to pay their way will be less and less until there is no one left to pay the bills of of others and society deteriorates to a point where all are at the poverty level. As the saying goes, “eventually the state runs out of money” because the state is unable to generate an economy that can sustain a healthy GDP. This happened in Cuba as no one was allowed to practice private enterprise. There are no new cars in Cuba. Everything is run by the state providing not enough needed products and services. There are no automobile or any other private factories. The profit motive is nonresistant. The economy can not sustain production nor the services required for a robust economy. This includes health care. There are not enough qualified healthcare professionals to care for Cubans. The same happened in the Soviet Union. They were sucking the spoils of the countries under their control (iron curtain countries) to feed their own economy. Czechoslovakia, Poland, Hungary, and a few other countries had better economies, although poor by western standards, than the Soviet Union. That was due to the Soviet Union’s government micro managed all production and service by people who were not qualified in any of the fields they controlled. The other reason was that it tool too many resources to control the people; police and military were primary consumers of the their GDP. The current U.S. administration is heading our country in to the same dead end as these failed regimes. The US government took over our auto industry handed it to the unions, and stole the assets of the stock and bond holders. In the USSR it was called “dictatorship of the proletariat” our government called it a bailout. We can and must put a stop to this destruction of our Republic. We must make changes in our governments from Federal to state to local. We must replace the current office holders with patriots willing to serve our nation and follow the path of our founders. Let’s make this a government of, by, and for the people as intended by our founders. Hey people DO SOMETHING!

    • Smith and Wesson and Me

      Nah. They’ve already succeeded in draining any life force from us to do anything with two generations of leftist propaganda. A couple of generations earlier?…the Capitol and the White House would be smouldering ashes by now.

  • keithj

    Now these revelations bring it home—–the reality of the train wreck coming our way. Thank the progressives for their bleeding-heart approach to individual responsibility and accountability.

  • gvanderleun

    What’s Right (and Wrong) with This Picture

    “1) Perazzo’s right about the incomes and the differential premium prices for the different incomes. But he forgets to mention that poorer people get big subsidies on the co-pays and the deductibles, too (if they choose a silver plan), so their monetary advantages are not just for the premiums but for the whole kit and kaboodle (at least for a silver plan).

    “(2) Those percentages he gives—60% for bronze (40% contribution from the patient), 70% for silver (30% contribution from the patient)—are not explained correctly by him. First of all, those are just averages; the real patient contributions could differ a great deal depending on how much health care a person actually uses in a year. What’s more, he says that those are the percentages people pay AFTER they have paid the deductible, which is wrong. Those patient contribution percentages actually include what the person pays for the deductible, too.

    “(3) He’s right about the differential prices for premiums depending on income, but he’s wrong about the details of the redistribution part. The money that the richer people pay to buy health insurance does not go to DIRECTLY subsidize the premiums of the poor people. The money that the richer people pay for premiums goes to the insurance companies, and the insurance companies get exactly the same amount for premiums for the poor people–it’s just that the insurance companies get it mostly from the government instead of from the poor person him/herself (or from richer people’s premiums). The insurance company makes the same on rich and poor people. So where does the government get the money for the subsidies, if not from the richer people’s premiums? From a whole bunch of new taxes, for example on those making over $250K, on medical devices, etc. (see the list here: http://jeffduncan.house.gov/full-list-obamacare-tax-hikes ), some of which are borne by the rich and some by the middle class. “

  • 56Survivor

    I will not comply.

  • Langosta

    What you have to remember is that “Joe” the bum was subsidized under the old system too. He showed up at the emergency room when he got sick and then stiffed the hospital on his bill. The rest of us got over-billed to pay for Joe the Bum, so there was the same amount of redistribution going on then as there will be with Obamacare

  • Juls

    Are you kidding me? You’re missing the forest for the trees!

    At an annual income of less than $16,000 old Joe has no better insurance than the guy making $46,000 and paying the full boat. Can’t you see that?
    Even with the subsidy Joe still has the annual $5000 deductible for 60% coverage on the Bronze plan and the coveted Silver plans would still cost him $250 bucks a month after a subsidy. With a monthly income of $1300 do you really think either of these plans are a viable alternative for Joe? You’re paying the premium for insurance Joe can’t afford to use!
    EVERYBODY is getting screwed on Obamacare. If people who get the insurance don’t use it because they can’t afford it – then where is all that money going?

  • Feemster

    When was in Junior High back in the 60′s….our teachers would tell us….about four times a day…if we didn’t work hard and study hard…we would never accomplish anything or HAVE anything. I guess they were wrong.

  • MediaMentions

    Eh, it has it’s pros and cons. What I don’t get is why the US didn’t just adopt a Canadian system. Here’s 22 reasons why: I don’t get why the US didn’t just adopt the Canadian system: http://www.pressreader.com/bookmark/FSNFF82HB3O7/TextView economically, politically, we’re similar enough that it could work if done properly. And it’s not even an apples and oranges question. the two are similar enough that done right, it could work in a fair and equitable manner without punishing dependents.

  • Susan

    An excellent explanation of how this plans works. It just seems so unfair that hard working Americans get to pay more for their health insurance than ever before and the less motivated, who don’t work or barely work get the same or better health insurance for almost free.

  • Crabby

    Sorry, but I guess that I am a little slow. Assuming that Joe pays the $1.00 per month for the bronze plan where is he getting the money to pay the $5,000.00 annual deductible and the remaining 40% of his medical costs after that deductible is met?? What am I missing?? Help!

  • Death

    Do you really expect anyone to take this article’s criticism of Obamacare seriously when the example recipient of subsidized insurance plan is characterized as “an obese alcoholic and longtime drug abuser with little ambition and no history of ever having held a full-time job for very long” ?

    Come on…