It's Gonna Be Like Christmas! (Health Care)

It’s Gonna Be Like Christmas! (Health Care)

Posted by Karl Denninger

Oh boy are some folks in for a surprise…..

“It’s just going to be like Christmas,” said DeCarlo Flythe, who lost health coverage for his family when he was laid off almost three years ago. “It’s going to be great. You know, no worries (about) the bills. We are going to go ahead and pay our co-pay and be alright.”

You got the $10,000 for the policy and another $10k for the out-of-pocket deductibles, right?

Yes, I know if you are lower-income you’ll get subsidies.  But that being laid off thing might become more-permanently laid off, you see, since if you go back to work your employer will have to either pay a fine (annually) or pick up the majority of that $10k in cost.

If your value in the marketplace is $20/hour, with a 2,000 hour man-year of work (50 weeks x 40 hours/week) your economic value in the economy is $40,000 (gross.)  From this your employer is going to have to take $10,000 out to avoid being fined, which means you now make $15/hour.  Then you pay taxes (FICA and Medicare) on that.  You’ll likely get back the rest of your federal income tax (especially if you have a family) but your out-of-pocket medical expenses will still be that $10,000 either way.

So now you’ve got $30,000/year less about $2,300 in Medicare and FICA tax, and from that you subtract the co-pays and deductibles of $10,000.  You’re left with about $18,000 to live on, or about $1,500 a month for your family of four.

This sounds like “Christmas”?

The clue-stick coming to whack these folks upside the head just as did the people who said “I don’t have to worry about putting gas in my car or paying my mortgage!” will lead to some rather extreme emotions, I suspect, when the truth becomes apparent.


From the forum:

“So I just got a call from my health insurance provider. My family rates are going up $200/month … $2400/year per employee effective April 1st. Didn’t take long after signing to get this s**t going.

So much for the “my plan will save Americans” $2500/year in Healthcare premiums.

F***ing liar in chief. “

Yes, this law will induce people to hire, it will improve health access, and it will be positive for the consumer, economy, stock market and spending.

The market rallies on for today, as I sit back and chuckle to myself…  “I told you so.”

Please, buy more stocks to drive the DOW, S&P, Nasdaq and Russell higher on the mythical economic “recovery” and mythical job gains that will take hold as employers, right here and now, four full years before the “benefits” show up for adults in this bill (those very same workers) get whammied for $2,400 per year in additional costs per employee.

PS: One way or another the employees will be paying every single penny of that cost.  Either directly through lower wages (which will do great things for consumer spending and the economy) or indirectly as people are either laid off or not hired in the first place.