ObamaCare Incents People to Work and Earn Less - Will Media Report It?

A new study by the insurance price comparison website Value Penguin finds that ObamaCare will actually incent some people to work and earn less money.

As a CNBC.com article on this subject is now prominently linked at the Drudge Report, one has to wonder if the ObamaCare-loving media will report it:

The introduction of ACA subsidies to help people buy insurance on the individual market creates a number of economic incentives when it comes to income. In particular is the phase-out of all subsidies for households once their income surpasses 400% of the Federal Poverty Level (FPL). Getting a raise or putting in more hours beyond the FPL threshold may actually result in less take-home income for the household.

Yes, you read that right:

Household Size          400% FPL         Premium Cap
1 (Single)                    $45,960                $4,366
2 (Couple)                   $62,040               $5,893
3                                  $78,120               $7,421
4                                  $94,200               $8,949

If your income is at or below the above 400% FPL figure for your household size, the government will subsidize your healthcare so that you spend no more than 9.5% of your income. Earn a dollar above the 400% FPL threshold and the subsidies disappear completely. This obviously creates a problem! If insurance costs substantially more than the capped premium for your family, that extra dollar may actually cost your household a huge amount in actual dollars.

VP offered some examples that were simplified by CNBC.com:

Under a scenario that ValuePenguin.com identified, a couple in Ohio, both age 50, would be eligible for subsidies worth $3,452 to purchase a so-called silver insurance plan—a moderately priced level of benefits under the ACA's scheme—that costs $9,346 annually if they made up to $62,040 per year.

But if they made just $1 more than that, they would lose the subsidy. Wu noted that the couple then would have to earn at least $65,492 to make up for the lost subsidy.

So, unless they knew they were going to make the extra $3,452, this couple would be better off working less and staying at $62,040.

Of course, since health insurance costs more the older you are, the incentive to work and earn less will be more the case for older working Americans.

As such, ObamaCare is just another social program that will end up disincenting people to work and earn as much as they would without such programs.

And people wonder why the income inequality gap continues to widen.

Will the liberal media report this?

Don't hold your breath!

Noel Sheppard's picture