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Obamacare Finds a New Way to Crush Families

Obamacare has just used a definitional trick to make health insurance unattainable for millions of Americans. The new healthcare law will provide tax credits to individuals who can’t afford insurance, but on Wednesday the IRS released a  definition of “affordable” that will leave many families in the lurch. The NYT has the story:

In 2012, according to an annual survey by the Kaiser Family Foundation, total premiums for employer-sponsored health insurance averaged $5,615 a year for single coverage and $15,745 for family coverage. The employee’s share of the premium averaged $951 for individual coverage and more than four times as much, $4,316, for family coverage.

Under the I.R.S. rule, such costs would be considered affordable for a family making $35,000 a year, even though the family would have to spend 12 percent of its income for full coverage under the employer’s plan.

You heard that right. The new IRS rule suggests that it is “affordable” for a family making $35,000 a year to send 12 percent of its income on health care. That cuts a large piece of a very small pie. The results aren’t pretty:

“This is bad news for kids,” said Jocelyn A. Guyer, an executive director of the Center for Children and Families at Georgetown University. “We can see kids falling through the cracks. They will lack access to affordable employer-based family coverage and still be locked out of tax credits to help them buy coverage for their kids in the marketplaces, or exchanges, being established in every state.”

But wait: there’s some good news. Although individuals without insurance must pay a fine, the IRS has decided to exempt families unable to afford health care under this new rule. If the total cost of your family’s plan exceeds 8 percent of your income, you won’t have to pay the penalty for not buying it. Your kids still won’t have insurance, but hey, at least you won’t be taxed for it.

And people say compassion is dead in DC.

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