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February 12, 2013

Ben Smith Is Wrong About ObamaCare Punishing Obama Voters And Helping GOP Voters

Ben Smith had a long story yesterday at BuzzFeed about how Obama's signal achievement, ObamaCare, helps a group of voters (the elderly) at the expense of voters who overwhelmingly support him (the young).

The passionate supporters are the youth, who voted for him by a margin of 60% to 36%, according to exit poll samples of people 29 and under. His enemies are the elderly: Mitt Romney won 56% of the votes from people 65 and over. And while one of ObamaCare's earliest provisions was a boon to the young, allowing them to stay on their parents' insurance through the age of 26, what follows may come as an unpleasant surprise to many of the president's supporters. The provisions required to make any kind of health insurance plan work — not just ObamaCare, but really any plan of its sort — require healthy young people to pay more in health insurance than they consume in services, while the elderly (saved by Sarah "Death Panels" Palin from any serious attempt to ration expensive and often futile end-of-life care) consume far more than they pay in. There is always a push and pull, however, and this year will be spent laying plans to shift the burden further toward the young.

What is actually missing from his piece is any advantage Obama's "enemies" are getting from sticking it to the 20 and early 30 somethings.

Yes, ObamaCare is a bad deal for these "young invincibles" (it's an argument conservatives made during the ObamaCare debate) but that doesn't mean it's a boon for older Americans.

The fight over health insurance resources isn't simply between young Obama voters and older Republican voters. It's also a struggle between income groups. Here the poor, aka "the 47%" which make up the core of the Obama and Democratic coalition are going to see massive amounts of dollars poured into government assistance programs while money is taken away from the middle class via taxes

On top of that, many middle class Americans will lose their existing health insurance coverage and be forced to buy new coverage out of their own pockets.

Middle class families take note. A family of four with an aggregate income of more than $88,000 annually or an individual earning around $44,000 could find themselves badly strained by healthcare costs under the Obama plan.

Many of these folks currently get their health coverage from work. They benefit from an implicit subsidy built into that workplace coverage that lets them spend pre-tax dollars through their employer to purchase health insurance. Depending on their tax rate, that subsidy helps offset some of the premium costs.

Under the Obama plan, many of these families could instead find themselves buying their health insurance on the new state-based exchanges that get started in January 2014. For a family of four, premiums on even one of the lower priced "silver" options could still cost more than $15,000 annually on the exchanges.

Only their incomes will make them ineligible for the "premium assistance credits." that are meant to offset some of the cost of buying the pricey comprehensive coverage that the Obama plan mandates. These families will also no longer have the benefit of being able to defray some of these costs by spending pre-tax dollars.

More on the cost of ObamaCare to the middle class here.

Meanwhile, Medicare eligibility will be expanded and subsidies will be provided to poor or low income Americans to cover their health insurance costs.

Obamacare establishes a new eligibility level for Medicaid above the current poverty line of $18,530 for a working family of three. Effective in 2014, the expansion will allow families who make up to $26,344 to be eligible for coverage under the program. That would make a huge difference for low-income working families in states like Florida, South Carolina, Georgia, and Louisiana who are not currently considered poor enough to qualify despite the fact that they are living in poverty by federal standards. However, those states’ Republican governors are choosing to deny their state’s low-income residents health care coverage.

If governors reject the ACA’s Medicaid expansion, the families whose income falls between the federal poverty line and the new $26,344 income level may receive subsidies to help them participate in the health insurance exchanges that will be set up in 2014. But the estimated 11 million families who fall under the poverty line but above their state’s Medicaid eligibility line will be left in the cold, unable to receive either Medicaid benefits or subsidies.

Whether or not one gets hurt by ObamaCare isn't simply determined by age, economic status has much more to do with it. It's inarguable that poor and low income Americans (including the "young invincibles" among them), aka prime Democratic voters, are going to be the recipients of a massive wealth transfer from middle and upper class voters, courtesy of Barack Obama.

So, ObamaCare isn't punishing Obama's base, surely it must as Smith claims, hurt his enemies....the seniors. To simply assert that what's bad in ObamaCare for younger Americans is good for older ones as he does misses some important parts of ObamaCare beginning with the over $700 billion it takes from Medicare that will now be spent on services for Obama voters.

Absolutely, without a shadow of a doubt, seniors will feel the impact of Obamacare’s cuts through decreased benefits or the inability to access health care. Heritage expert Bob Moffit has clarified, “Financing directly affects the quantity and quality of the benefits available to the beneficiaries.”

For example, the Medicare actuary projects that the cuts to Medicare Advantage ($156 billion over 10 years), the popular private alternative to traditional Medicare, where 27 percent of all beneficiaries are enrolled, will decrease enrollment by 50 percent by 2017. Millions of seniors will be forced to give up their current plans and go into traditional Medicare, where they will receive fewer benefits and pay higher out-of-pocket costs.

Further, seniors will face greater barriers when attempting to access care. The Medicare actuary projects that over the next 10 years, Medicare Part A providers (i.e., hospitals and nursing homes) may stop accepting Medicare patients or 15 percent of them will become unprofitable due to the severe Obamacare cuts. If Obamacare remains on the books, the number of providers becoming unprofitable will reach 40 percent by 2050. A doubling of Medicare patients with a major reduction in the number of providers will guarantee access problems for senior citizens.

No matter how Democrats try and spin this, seniors are losing access to healthcare providers across the country.

The central theme of Smith's piece, that ObamaCare hurts Obama's base and helps his opponents simply isn't supported by the facts or anything in his story. I don't know if Smith simply wanted to make Obama seem politically brave and selfless or not but there's no political courage (in terms of hurting supporters) or selflessness in ObamaCare.

The more troubling but less surprising part of Smith's story is the unexamined notion that it's normal and proper that we as a country should be using the government to pit groups against each other to split up the fruit of other's labor. That underlying assumption shared by far too many Democrats and Republicans is the root of our problems as a nation. Until we move beyond arguing over how to divvy up what is not rightfully ours and simply allow people the freedom to make their own way, we will be fighting over a smaller and smaller pie.

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posted by DrewM. at 11:37 AM

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