Obamacare Takes a Double Shot at the Economy and the American Dream

Kathryn Nix / April 26, 2011

In a recent piece for The Wall Street Journal, Daniel Kessler, a senior fellow at the Hoover Institution, describes how the new health care law’s subsidy program to help low- and middle-income Americans purchase health insurance will have severe economic consequences. These will include discouraging work for qualifying individuals and other taxpayers, disrupting America’s labor markets, and reducing economic activity.

Beginning in 2014, when the new health insurance exchanges will open for individuals and small businesses, subsidies will become available for those whose income falls between 134 percent and 400 percent of the federal poverty level (FPL). For a family of four living in a high-cost area, earning 134 percent of the FPL ($31,389 in 2014 dollars) would qualify them to receive $22,740 in assistance. A similar family earning an income at 400 percent FPL ($93,699) would qualify to receive $14,799 in subsidies.

The problem is that as income increases, families will experience large reductions in government assistance, which will discourage striving to earn a higher income. (more…)