Bill Clinton was Right: ObamaCare in its Current Form is a Crazy System

During the recent presidential campaign, Bill Clinton was quoted as saying that the current healthcare system in the country (ObamaCare) is a "crazy system." He took a lot of heat for this, but when you see his full quote, what he actually said makes a lot of sense.

 

I was reminded of this so-called gaffe today when a proposed GOP plan for replacing ObamaCare leaked. A key feature of this plan is that instead of means-tested subsidies, the plan uses refundable tax credits that rise with age, not income. Here's a graphic that lays out the benefits.


As you can see, if you are in a low income bracket, especially if you are older with low income, you do MUCH better on ObamaCare. However, at the same time if you are in a higher income bracket ($60,000 and above) ObamaCare is not such a great deal for you. You make just enough money to make you ineligible for subsidies.

This illustrates the problem with ObamaCare. It is basically a benefit program for those with lower income. People who are moderately comfortable--but far from rich--are screwed in this system, especially if you are older. For people like this (I am one of them), the proposed GOP plan is vastly preferable. In my own case, the cheapest plan on our local exchange would have cost me $650 a month and included a $4500 deductible. I viewed this as little more than catastrophic coverage. Under the GOP plan, assuming that nothing else would change, I would pay only $300 a month for the same plan.

This is a persistent problem with Democratic policy proposals. The party consistently criticizes vast levels of income inequality and special breaks for the rich. I strongly agree with this. However, when it comes time for actual policy proposals the party tends to pass legislation that targets benefits towards the poor at the expense of the middle class. If you are rich, then you can afford to pay more, but if you are only moderately successful, then you cannot. What is rich? This is not easy to define, but I would say that at a minimum you cannot be "rich" unless your annual income is in the top 1%, which nationally averages about $465,000 in income annually.

This is an urgent problem that the party must fix. Clinton's idea of a Medicare buy-in for the middle class sounds like a great idea. If Hillary had promoted this idea, then maybe. . . .