Tag Archives: subsidy cliff

Subsidy cliff: Obamacare work disincentives

subsidy cliff

PJ Media » Obamacare’s ‘Cool Calculator,’ Part 1: Work Disincentives Like We’ve Never Seen Before.

Let me translate this graph for you. If the couple, age 60, depicted in the graph have an annual income of $62,040 their health insurance premium is $5,890. If they make a single dollar more, their health insurance premium rises to $16,382. Let’s call this phenomenon “the Subsidy Cliff”


You see, Kaiser’s “cool calculator” makes the exact points Robert Rector at the Heritage Foundation and yours truly have been arguing since early 2010 — namely, that the Affordable Care Act will deeply discourage work and virtually any other attempt at financial improvement. It will also throw new obstacles in the way of couples wishing to get and stay married, even to the point of encouraging marital breakups of families with children.



The article concludes with these examples…

Many will conclude that earning extra money isn’t worth it, or will strive mightily to find ways to earn income under the table. This is not the recipe for growing an economy which already more resembles the awful 1930s in key statistical aspects than it does any other economy post-World War II.

Even if they somehow stay motivated while the government is taking one-third to one-half of each additional dollar they earn, what single person in their 50s or 60s who understands all of this is going to move to a new position or accept a promotion which increases their salary from $46,000 to $50,000?

What sane married couple in their 50s or 60s will want to increase their family’s income from $60,000 to $70,000, when doing so means either taking home almost nothing extra or losing money in the bargain?

This is NOT good for society. Un-American is a phrase that comes to mind.

Of course, the reason there is such a large “subsidy cliff” is that the actual cost of healthcare is “too damn high”.