Most working Americans already have health insurance because we already get a subsidy in the form of the tax treatment of insurance benefits. If your employer offers you subsidized insurance premiums as part of your compensation package, that subsidy doesn’t count as income for tax purposes. But the subsidy does have to be available to all full-time employees. So the government gives employers a subsidy that they use to subsidize insurance premiums. That creates the extra incentive to participate in the employer risk-pool and makes health insurance work. People trying to buy insurance outside the employer framework currently have no such sweetener. Obamacare works by spending money to create new sweeteners for people outside existing employer-sponsored risk-pools. This is key to conservative hatred of Obamacare: They cost money and that money comes largely from taxes on rich people, which Republicans hate. But even though the subsidies are at the heart of the political controversy, the campaign to convince people to sign up is based on ignoring their existence, in order to make the law look like a bad deal.
Posted on: Wed, 14 Aug 2013 20:36:01 +0000