How the IRA Bill Subsidizes the Rich

Posted on by John C. Goodman

The benchmark premium for an exchange plan in Prescott, Arizona, for a family of five with a 60-year-old household head is $50,923 in 2023.

  • If that family made $150,000, they would qualify for a subsidy of $38,173.
  • If that family made $350,000, they would qualify for a subsidy of $21,173.
  • If that family made $500,000, they would qualify for a subsidy of $8,423.
  • This family does not lose subsidy eligibility until they make more than $ 599,000.

The projected cost per newly insured is nearly $14,000 a year over the next decade—a high amount that shows that most of the new spending is simply replacing private spending with government spending.

Brian Blase testimony

2 thoughts on “How the IRA Bill Subsidizes the Rich”

  1. Thank you for posting the Brian Blase testimony before Congress. Mr. Blase is always worth reading, even when I disagree with him.

    His testimony has a few weak spots, in my opinion.

    1. He uses the cliche that 25 per cent of health spending provides no health benefits. (Left-wingers use a similar cliche.) This seems to be to be impossible to prove or disprove — it just sounds good.

    Health spending does provide a good living to millions of doctors, nurses, insurance administrators, health studies researchers and professors, drug industry salesmen, et al.
    It certainly benefits them!.

    2. He cites the fact that a family of 5 with parents over age 60 faces a premium of $51,000 for a silver plan on the ACA exchange.

    This is true. But I priced the same plan in my own zip code in St Paul MN. The price here is $23,724.

    The ACA rules are all the same. I do not think that Minnesotans are healthier than Arizonans.
    (considering how many retirees move to Arizona for their health!!)

    I think the difference is that Minnesota has used 1332 reinsurance programs and tried other tweaks to lower the ACA premiums. Arizona has been largely anti-ACA from the start and I do not think they have tried anything.

    (In fact Mr. Blase endorses reinsurance himself later on in the article.)

    3. Mr Blase asserts that higher subsidies will cause some persons to lose employer coverage.

    I sold health insurance to both employers and employees for several years, so I am going to share my own experience here.

    a. ACA coverage for low income persons is usually way, way better than most employer offers. I could give a whole page of examples.

    b. In my experience, the people who opted for ACA coverage were usually not offered anything by their employer (or they were unemployed)

    I have a few more observations, will post later today.

    Reply

  2. Dr. Goodman notes correctly in the “Links” here that the ACA replaces private spending with public spending. Mr. Blase gives numerous examples where this is occurring, and condemns virtually all of them while offering private-spending alternatives.

    Personally, I think that public spending is just fine in some cases. A free public ambulance service — funded by taxes — makes far more sense to me than private ambulances that charge $1500 a ride.(and that’s just ground ambulances)

    Free public nursing homes — funded by taxes — makes more sense to me than families losing everything they own to elder care.

    A program like Medicaid — with no premiums or deductibles, and no resulting medical debt — seems superior in some ways to private insurance. I try not to be doctrinaire about my preference for social insurance, because there are hard limits on taxpayer funding.

    .

    Reply

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