Households Facing Obamacare "Rate Shock" Will Get an Average of $2,672 in Free Money

Moneybox
A blog about business and economics.
Aug. 14 2013 12:19 PM

Study: Households Facing Obamacare "Rate Shock" Will Get an Average of $2,672 in Free Money

slide11

The conservative campaign against the Affordable Care Act is largely motivated by dislike of the large subsidies that it will make available to help people buy insurance. At the same time, the conservative campaign against the Affordable Care Act largely consists of ignoring the existence of these subsidies. But the subsidies are a big deal—that's why Republicans hate them.

The Kaiser Family Foundation did a very interesting study looking specifically at households that currently purchase insurance on the individual market. These are the folks who might be facing "rate shock" when Obamacare is implemented and insurers can no longer freeze high-need patients out of the marketplace. They found that these households will, on average, get $2,672 in subsidy, or about 32 percent of the total cost of a silver plan. If you opt for a bronze plan, the subsidy will cover an even larger share of the premium.

Ta-da!

Advertisement

It's really worth dwelling on this because something like 90 percent of the commentary I read on Obamacare involves a kind of bad-faith denialism about these subsidies. The thing about subsidies is that money doesn't grow on trees. It comes from taxes. In this case, largely taxes on rich people. And one of the core beliefs of the modern-day Republican Party is that taxing rich people in order to give money to nonrich people is economically ruinous. Another of the core beliefs of the modern-day Republican Party is that taxing rich people in order to give money to nonrich people is deeply immoral. These two ideas, alone and in combination, are the heart and soul of GOP economic policy. So it's no surprise that Republicans really dislike this law, since it's a major transfer of income from the rich to the nonrich. But from the flip side, if you're a normal person who thinks this kind of redistribution is neither immoral nor economically ruinous, this is a big part of the appeal. It's one of the main reasons Obamacare will make many more people better off than it makes worse off.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Stop Panicking. America Is Now in Very Good Shape to Respond to the Ebola Crisis.

The 2014 Kansas City Royals Show the Value of Building a Mediocre Baseball Team

The GOP Won’t Win Any Black Votes With Its New “Willie Horton” Ad

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

Technocracy

Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

One of Putin’s Favorite Oligarchs Wants to Start an Orthodox Christian Fox News

These Companies in Japan Are More Than 1,000 Years Old

Trending News Channel
Oct. 20 2014 6:17 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Politics
Oct. 20 2014 8:14 PM You Should Be Optimistic About Ebola Don’t panic. Here are all the signs that the U.S. is containing the disease.
  Business
Moneybox
Oct. 20 2014 7:23 PM Chipotle’s Magical Burrito Empire Keeps Growing, Might Be Slowing
  Life
Outward
Oct. 20 2014 3:16 PM The Catholic Church Is Changing, and Celibate Gays Are Leading the Way
  Double X
The XX Factor
Oct. 20 2014 6:17 PM I Am 25. I Don't Work at Facebook. My Doctors Want Me to Freeze My Eggs.
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
  Arts
Brow Beat
Oct. 20 2014 9:13 PM The Smart, Talented, and Utterly Hilarious Leslie Jones Is SNL’s Newest Cast Member
  Technology
Technology
Oct. 21 2014 8:38 AM An Implanted Wearable Gadget Isn’t as Crazy as You’d Think Products like New Deal Design’s UnderSkin may be the future.
  Health & Science
Bad Astronomy
Oct. 21 2014 7:00 AM Watch the Moon Eat the Sun: The Partial Solar Eclipse on Thursday, Oct. 23
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.