HOT BLAST: The insane policies pre-Obamacare
Oct 29, 2013 | 1297 views |  0 comments | 20 20 recommendations | email to a friend | print
(AP Photo/J. David Ake, File)
(AP Photo/J. David Ake, File)
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Josh Barro provides a little perspective on the lost coverage because of Obamacare meme sweeping the nation.

Barro writes:

Once Obamacare is implemented, America's health insurance system will be a thicket of subsidies and transfers that benefit some people and harm others.

He then adds:

Before Obamacare, our health insurance system was already a thicket of subsidies and transfers. The law doesn't simplify the system, but it does make the thicket of subsidies and transfers more sensible: directed more at people who have low incomes or high health needs, and greatly shrinking the share of the population that doesn't have health coverage at all.

He then cites the example of Obamacare foe Sen. Ted Cruz, R-Texas:

Cruz has frequently noted that he declines the health plan that is offered to him as a member of Congress. Instead, he is covered through insurance that his wife gets as a Managing Director at Goldman Sachs.

Health care economist Austin Frakt ran the numbers on that Goldman plan. As of 2009, Goldman's health insurance coverage for employees at the managing director level and higher cost a stunning $40,000 per family. (The typical cost for a family health insurance plan in the United States is around $16,000).

Health insurance benefits are not taxable income, so Cruz and his wife get a big tax break on that plan. The break cut their tax bill by about $15,000 as of 2009, the last year for which we know the plan's value. The Cruzes aren't alone; every American who gets health insurance coverage through work gets this tax break, but the Cruzes enjoy an especially large one because their plan is so expensive and their tax rate is high.

For comparison, Medicaid coverage for two adults and two children cost about $11,000 in 2010, meaning (unless Goldman has radically changed its health benefits since 2009) Cruz is getting a tax break worth more than the benefits a family on Medicaid gets — even though he is a Senator and his wife is a highly paid investment banker and they have no need for subsidies to obtain health coverage.

This is insane health policy, and the Affordable Care Act changes it.

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