An Analysis of the Obamacare Tax
What follows is my napkin-level analysis of Obamacare for a hypothetical 40 year old single American. If anyone has more precise numbers I would appreciate it. But the analysis is useful to show the broad effect of Obamacare. It does not look good for the average American.
Here's my hypothetical: say an individual can't afford to buy health insurance and he's a 40 year old American making near the median income, $50,000 a year. Let's assume the individual also has $50,000 in savings for retirement.
Under Obamacare, the government subsidies for insurance won't help because there is no real subsidy at this level of income. So, our individual, being 40, tries to go the next 10 years simply paying the fine (assuming it's $1,000--don't know where they ended up on that for reals) instead of paying the premiums which we will assume are $8,000 a year and which our individual can't afford because he's got the bills of a typical American (see here for an up to date snapshot of the typical American's balance sheet). So he's paying his Obamacare fine, not paying for insurance, and not adding to his savings because he was putting away only about $1,000 a year anyway.
Well, at 49 the individual gets cancer and has 2 years to live. He's not covered under an insurance policy but gets care. His two years of care cost $250,000. He's already paid or owes the government $10,000 over the last 10 years. And since he has $50,000 saved he can't go on Medicaid (have to be in poverty), and he has to declare bankruptcy. He would be able to keep probably half of the money through bankruptcy--say keep $25,000. But he's got care and was able to live a little more "extravagantly" over the last 10 years because he didn't have to come up with outrageous premiums (and probably dip into that savings and worse, take out credit cards).
This scenario is worse than the status quo for this individual. Under the status quo this individual would do all the above except pay $10,000 to the government. He'd be bankrupt and have cancer but not have to pay the government.
Under Obamacare he gets the two worst options. Say he chooses to pay for the crappy insurance. He stretches really hard and pays $80,000 over the coarse of the decade, his 40s, to the insurance companies. Then, his insurance only covers $150,000 of his $250,000 bill for care when he gets cancer. He's on the hook for $100,000 but only has $50,000 saved up (and likely he had to dip into this to afford the premiums).
He's still bankrupt, even under Obamacare. In fact, he would be much better off under the status quo. They all end up at the same place. Bankrupt and cancer at 52. But under Obamacare they shook him down for as much as they could before he died.
I would love to see someone quibble with the numbers . . . but I bet the basic analysis holds.