I don’t know how much pain these people will feel from the unpleasant surprise that they are not eligible for Federal subsidies, but they are certainly not going feel like the White House was trustworthy.
Back in April, Health and Human Services Secretary Kathleen Sebelius told a congressional subcommittee that any individual making under that $45,960 threshold – or four times the poverty level of $11,490 for an individual – would qualify for “an upfront tax subsidy.”
“Somebody who’s making $25,500 would definitely qualify for a subsidy if he or she is purchasing coverage in the individual market,” Sebelius added.
Despite the secretary’s assurance, a 25-year-old living in Nashville, Tennessee, making $25,500 will not qualify for a subsidy, for example.
It is not clear to me of Sebelius was lying about who gets a subsidy. Her deception may have been to pretend to Congress that she had any working knowledge of the law. It is not clear to me how many people in the administration understand the Affordable Care Act.
But, whether the Administration knew it or not, their claims that people below a certain income level would all get Federal subsidies are turning out to be false.
One of the basic tenets of Obamacare is that the government will help lower-income Americans — anyone making less than about $45,900 a year — pay for the health insurance everyone is now mandated to have.
But a CNN analysis shows that in the largest city in nearly every state, many low-income younger Americans won’t get any subsidy at all. Administration officials said the reason so many Americans won’t receive a subsidy is that the cost of insurance is lower than the government initially expected. Subsidies are calculated using a complicated formula based on the cost of insurance premiums, which can vary drastically from state to state, and even county to county.
That doesn’t change the fact that in Chicago, a 27-year old will receive no subsidy to help offset premiums of more than $165 a month if he makes more than $27,400 a year.
In Portland, Oregon, subsidies for individuals making just $28,725 a year phase out for those younger than 35 years old.
Again, I don’t know how much pain this will cause the people who don’t get a subsidy. Obviously, the Administration thinks the rate is already low enough. Will these “low-income younger Americans” agree? I could easily imagine someone getting so upset that the expected subsidy is not available that he or she doesn’t care that the rate is lower than the Administration expected.
There are only a couple of ways we can really find out how much this is or is not damaging the Obama Administration. First, we will find out if we see many of these people complaining in the media. Second, we will find out if many young people “opt out” of Obamacare altogether. At some point, it should be possible to engage in some demographic research to see if the percentage of young people who opt out is higher among those who have lower incomes but who didn’t get the subsidies.
Once again we see that the Obama Administration was incredibly reckless in getting a law passed that is not performing according to what they promised.