2014: Obamacare Puts Down Roots for the Long Haul
by Alyene Senger, Heritage Foundation, January 7, 2014
Yes, Obamacare has raised premiums, caused people to lose their health coverage, raised taxes, and more. But on January 1, Obamacare started digging in for the long haul: putting down the deep roots of entitlement programs.
Entitlements—like the big three of Social Security, Medicare, and Medicaid—are the biggest causes of America’s spending and debt crisis. And Obamacare creates a new entitlement program while expanding another.
The creation of a new entitlement: Taxpayer-funded subsidies for millions of Americans
Obamacare created insurance exchanges to sell and subsidize government-approved health care plans. Most of those who attain coverage through the exchanges will have their costs partially subsidized by federal taxpayers.
By 2023, the Congressional Budget Office (CBO) projects that 24 million people will obtain coverage in the exchanges, 19 million of whom are expected to receive subsidies. CBO estimates that together, the subsidies will cost taxpayers nearly $1.1 trillion from 2014-2023.
Who can get a subsidy?
- Those earning between 100 percent and 400 percent of the federal poverty level ($11,490 to $45,960 for individuals and $23,550 to $94,200 for a family of four in 2013) will be eligible for premium subsidies that are applied on a sliding scale, with the lowest income receiving the highest premium subsidy.
- Those who purchase a silver plan in the exchange and earn between 100 percent and 250 percent of the federal poverty level are eligible for cost-sharing subsidies to help offset their out-of-pocket costs, in addition to the premium subsidy.
The expansion of a broken entitlement: Medicaid
Thanks to Obamacare, the already failing Medicaid program will receive an influx of millions of new enrollees in 2014 and beyond.
Before Obamacare’s blanket expansion, Medicaid traditionally covered low-income moms and kids and low-income disabled and elderly. If every state expands its program, as many as 25 million additional people could enroll in Medicaid by 2021—most of them childless adults. And there may even be some erroneous additions: Senator Rand Paul (R-KY) announced yesterday that his son had been signed up for Medicaid when the family tried to sign up for health care on the Obamacare exchanges.
Obamacare expands Medicaid eligibility to any individual earning up to 138 percent of the federal poverty level —an annual income of $15,856 in 2013, in any state that allows it. Instead of reforming a program that is already failing the most vulnerable in our society, Obamacare worsens the existing problems and creates new ones.
The law’s creation of two new entitlements comes at a time when the nation is already facing a fiscal crisis, largely due to existing entitlements. These programs need reform—not piling on new obligations.
We need health care reform that helps the needy and vulnerable in our society — by giving them better options than these. Learn more.
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