Healthcare Reform… The Rest Of The Story

In my last column, I had fun picking on the stupidity of our state legislature’s feeble attempt to make sufferers of the common cold suffer even more.

This month, it’s time to pick on the federal legislature, aka US Congress, and their now one year old disaster aka “Obamacare.” What are some of the hidden costs to businesses (and their employees)?

Imagine a family of four earning $31,389 in 2014. Under Obamacare, they would receive a subsidy of almost $22,800 to purchase healthcare insurance. That is a 72% increase in their total annual income! Contrast that with a family of four earning $93,669 a year, getting a $14,800 subsidy for their healthcare. A 16% increase in their total annual income! (Who’s paying for these subsidies? I’ll let you chew on the answer to that one.)

Imagine that 2nd family getting a raise of $1 more a year. They lose their $14,800 subsidy. In essence that $1 increase so generously given by their employer just cost this family $14,799! (Brilliant the way Obamacare works isn’t it?)

Here’s an unhappy scenario. Let’s say a family of four has only one spouse working. Due to higher gas prices, higher food prices, etc., they decide the other spouse is going to have to get a job. (Sound familiar?) This hypothetical family is currently making $90,000 a year and receiving a subsidy of $16,120 for medical insurance. The 2nd spouse gets a job offer of $40,000 a year.

What will this family actually realize in take home pay for this new 2nd job of $40,000? After factoring in Social Security and Medicare taxes of 7.65%, a bump into a higher Federal Income tax bracket of 25% and the loss of 100% of the Obamacare medical insurance subsidy, this 2nd spouse will bring in about $11,220 extra for working 2,080 hours a year. This 2nd spouse will be… more tired, maybe have to pay for babysitting, wearing out a second vehicle faster, paying for more gas and upkeep than before, buying more clothes and dry-cleaning costs, etc. Without counting any of those increased costs, this new job that’s grossing $19.23 an hour is really only bringing home a whopping $5.39 an hour!

So an employer needs the specialized services of that 2nd spouse, but the 2nd spouse says, “I can’t afford to go back to work…sorry.” This in effect causes the available skilled workforce to shrink. Forcing the employer to lower their standards for whom they hire, resulting in less efficiency, perhaps unhappy customers, etc. It also makes our hypothetical family much less able to pay their bills, resulting in their having less and less discretionary spendable funds, which will hurt local retail businesses. (Multiple negative costs on businesses due to Obamacare, and I’m just warming up. There are so many other problems with this terrible law, I’m just scratching the surface of it’s negative impact.)

If you are happy with Obamacare, congratulations, you are in the small minority. The rest of you need to get active to prevent any more attempts by the Federal government to “fix” our healthcare. Maybe, just maybe, we could talk them into reversing some or all of Obamacare?

Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459.