Killer chart: OC’s middle class crunch …

Yesterday’s post recapped articles from the NYT and WSJ that made a common, largely unrecognized point:

The expansion of “free” and near-free healthcare to approximately 15 million currently uninsureds (out of about 45 million uninsured citizens) is – to a large extent – being funded by the working middle class.

Case in point: the net insurance premiums paid after subsidies on the Obama Exchanges.

Using the Kaiser Foundation subsidy calculator , I picked off the net premiums for single, non-smoking 25 year olds across a range of incomes … and calculated the net premium as a percentage of income.

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Here are the fundamental takeaways …

 

Many 25 year olds aren’t represented – those who are covered by employer plans and  “adult-children” covered by parents’ employer-provided insurance.

For them, coverage is free if there are siblings already on the plan … parents pay an added premium if this adult-child is the only child on the plan.

Regardless, it’s safe to assume the these covered adult-children are from middle class families.

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It takes $15,000 to even make the chart.

Why?

Anything less is covered by the extended Medicaid provisions of the law.

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Net premiums increase quickly as a percentage of income.

Over 4% @ $20,000 …. peaking over 8% at about $30,000 when the subsidy is totally phased out and a full premium is paid … then tailing off as the full premium becomes a lesser percentage of larger incomes.

Bottom line: it’s the individuals earning between $20,000 and $70,000 who get hammered.

Low incomes are mitigated by subsidies … high incomes have more financial wherewithal … it’s the folks stick in the middle who get hammered.

No wonder that young healthies who are earning middle incomes aren’t flocking to the ObamaCare Exchanges.

It’s not economically rational to allocate 8% of relatively modest incomes to something that you don’t think you need.

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Data for a 25 year old, non-smoking individual … obtained from the Kaiser Foundation subsidy calculator

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