Obamacare News: 100K New Yorkers Losing Policies, CMS Admits Income Redistribution

In case you’re wondering why Democrats crafted Obamacare so it didn’t fully kick in until after the 2012 election, now you know. It’s one bad news story after another. There are so many it’s nearly impossible to keep up with them all. The latest news out of New York is that 100,000 New Yorkers will lose their individual policies, and that’s not counting those whose employer-paid polices are going to change.

Insurers are canceling the medical policies of about 100,000 New Yorkers enrolled in individual health plans because of ObamaCare, state health officials said.

But the figure is actually much higher because it doesn’t take into account hundreds of thousands covered under small business group policies that are being scrapped or rewritten to conform to the requirements of the Affordable Care Act.

In New Jersey, the policies of 800,000 residents are affected by the insurance overhaul, officials in the Garden State said.

“Approximately 100,000 individuals will be required to change insurance because current plans are not compliant with ACA [Affordable Care Act],” said New York state Health Department spokesman Bill Schwarz. (Read More)

New York Governor Andrew Cuomo doesn’t seemed too concerned, saying that those forced into the exchange will get a better deal. He must be referring to the people who previously paid for their own insurance without any help from the taxpayers that will now be subsidized. But someone has to pay for that, and it’s the middle class Americans who don’t qualify for subsidies. CMS all but admitted that Obamacare is a big redistribution scheme. Worse yet, they’re going to be data mining to make sure the redistribution is all going according to plan.

The fiscal 2014 budget justification released by Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner explains that CMS is requesting that Congress appropriate $803.5 million for operations and management of the Obamacare exchanges during the fiscal year so that, among other things, CMS can “ensure the integrity of programs that redistribute tens of billions of dollars.”

Overall, CMS wants $2 billion to run what it calls the “Federal Marketplace” for health insurance. “CMS’ program level request for the Marketplaces totals $2.0 billion in FY 2014, to support the first year of program operations,” says the budget justification. The agency estimates $1.5 billion of that will come from “discretionary Program Management resources” and $450 million from “anticipated user fee collections.”

The “Operations and Management of Marketplaces’ subsection of the justification says that CMS intends to spend $803.5 million in this area. That includes money that will be spent on “data mining techniques” to make sure the right people are benefiting from the new system of health-insurance subsidies set up by the Affordable Care Act.

The only people the “Affordable Care Act” will be affordable for are those who get a big enough subsidy.

Start, for example, with a low-income family of four living near St. Louis, Missouri, with $35,325 in household income (that is 150% of the federal poverty rate for a family that size). A Silver Plan policy for the family would have an annual premium of $8,088, according to Kaiser. But the family would receive a taxpayer-paid subsidy of $6,675, which means the family would pay, with its own money, just $1,413 for the coverage. (Kaiser chose the Silver Plan as an example because it would likely result in lower total costs for the family.)

Of course, most families of four in Missouri make more than $35,325 a year. The 2012 Census Bureau estimated that the median income for a Missouri family of four was $72,230 — meaning that half the state’s families of four are below that level and half are above.

For a family that is right on the median income, $72,230, the annual premium would still be $8,088, but the taxpayer-paid subsidy would fall to $1,226, meaning the family would pay, with its own money, $6,862 for the coverage. Is that a better deal than they have now? Maybe yes, and maybe no. In any event, they won’t save as much as the president promised.

Finally, choose a higher income level, but one at which there are still a lot of people. For a family of four with an income of $85,000, the premium remains $8,088 but the subsidy shrinks to just $13 a year, meaning the family will pay, with its own money, $8,075 for coverage. So that family will technically receive help with its health care costs — but not really.

For families above that level, and there are a lot of them, the subsidy will be $0. The bottom line is, when — or if — large numbers of people actually begin purchasing coverage on the Obamacare exchanges, many will find the much-touted subsidies aren’t for them.

So some people might be getting a good deal, but it’s at the expense of those getting a raw deal. Not to mention that those who think they’re getting a good deal are going to find out that the networks they have access to under their new policies may not include their doctors, or the best hospitals.