The Extortion of the Middle Class through the Affordable Care Act

You talk about disturbing, take a look and the lights will come on. The Affordable Care Act was designed to use the hard working middle class to fund increased accessibility and low cost health insurance coverage to low income individuals and families, high risk individuals, and our senior population. Hard working Americans that have clawed their way through this recession to keep our heads above water are going to pay for this.

Now don’t get all bent out of shape. We do need programs for low income individual families, high risk individuals, and we simply have to take care of our growing senior population, but we need to do it methodically. The Affordable Care Act is opening the floodgates and we are bout to bleed billions of dollars that will have to be funded. Who will be left with the bill? The middle class will pay for provisions of the ACA that are implemented and exhaust the funding provided by the Act.

Numbers don’t lie. The Affordable Care Act is clearly designed to create all kinds of benefits, but just not for the middle class. I spent the day nosing through premium individual tax credits that will be available through the Affordable Care Act, looking at the 2011 household income distribution from the U.S. Census Bureau, and 2009 IRS Tax Revenue statistics. It paints a disturbing picture and here’s why:

Affordable Care Act Premium Tax Credits

Tax credits are going to be available to individuals and families to offset premium cost purchased through the exchange (Link to Exchange Page). Take a closer look at the sliding scale and you get a real picture of what will be available to the middle class.

Expected Contribution Table:

Income based on percentage of Federal Poverty Line – Expected Premium Contribution

Less than 133% – 2.0% to 3.0%

At least 133% but less than 150% – 3.0% to 4.0%

At least 150% but less than 200% – 4.0% to 6.3%

At least 200% but less than 250% – 6.3% to 8.05%

At least 250% but less than 300% – 8.05% to 9.5%

At least 300% but less than 400% – 9.5% to 9.5%

 Now let’s turn the lights on by replacing % with real income numbers.

 Less than $29,725 – 2.0% – 3.0%

$29,725 – $33,525 – 3.0% – 4.0%

$33,525 – $44,700 – 4.0% – 6.3%

$44,700 – $55,875 – 6.3% – 8.05%

$55,875 – $67,050 – 8.05% – 9.5%

$67,050 – $89,400 – 9.5% – 9.5%

The Affordable Care Act sliding scale clearly provides the majority of premium tax credits to the lower income side of the scale. Household incomes over $89,400 will not have access to subsidies through the exchanges and those in the top end of the scale will not see significant credit assistance.

Income Distribution:

Now that we know the income level you need to be in to get anything from the Affordable Care Act, let’s look at where the population is. 2011 U.S. Census Bureau (Link to Census Bureau Site) information tells us this:

Household Income % of Population

Under $15,000 – $25,000 25%

$25,000 – $50,000 24.8%

$50,000 – $75,000 17.6%

$75,000 – $200,000 28.3%

$200,000 and over 4.2%

You can clearly see the correlation to the population household income demographic and the premium tax credit opportunities. Well over 50% of the population (Low Income) will reap the lion share of benefits, while many hard working dual income middle class families will be left out in the cold. Now let’s talk about those left out in the cold.

Tax Revenue by Household Income:

I couldn’t help ask myself if there was a correlation between household income and the tax revenue generated. Here is what I found from the IRS 2009 individual tax statistics. Now keep in mind that 2009 was the most current data available and that was in the height of the recession. It’s probably higher now.

Household Income Percent of Filings Percent of Tax Revenue

$75,000 – $100,000 10% 15.70%

$100,000 – $200,000 9.7% 28.6%

You can clearly see that 19% of hard working middle class Americans account for 44.3% of the tax revenue. This also answers the question of who will pay for the Affordable Care Act when this mismanaged implementation runs out of funding.

The Affordable Care Act has adopted an implement first and fund later mentality. With hard working middle class families in their sites, the administration has masked benefits to the middle class (or lack there of) on purpose. There is clear deception for a reason. As long as the middle class cannot see the implications, the administration can implement provision after provision with temporary funding supplied in the Healthcare Law. Once the funding runs out at the Federal and State levels, the American taxpayer will pick up the bill. As we see above, it will be the middle class.

As state insurance exchanges become unsustainable and Medicaid expansions exhaust federal funding, middle class America will find themselves footing the bill. A seemingly 1-2 punch will be delivered as the middle class are hit with increasing health insurance premiums to accommodate essential health benefit provisions of the ACA and find no help through the state run insurance exchanges. Other provisions will decrease the benefits we see through our employers as the exchanges standardize health insurance packages.

So why aren’t hard working middle class Americans screaming about this? The lights are just coming on. The Administration has engineered a very solid marketing plan to sell the benefits to everyone, and mask the true recipients. Look no further than the recent articles with Union officials finally figuring out that the ACA does not benefit them. The same individuals that fought to help the president vote in this crazy mess are starting to see the light. Educate yourself then educate someone else. We need to help each other understand this instead of believing everything we are told.