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The Spectacle Blog
Just like the scene in the movie where the lab rat dies, and you know the protaganist is coming next, the mounting failures of the Massachusetts health care overhaul tell us what we can expect in the rest of the country if conservatives cannot undo the national health care legislation.
Fortune has a helpful story out detailing “five painful health care lessons from Massachusetts.” Most of them are pretty obvious and have been explored in depth on this blog, particularly how the changes make the system more expensive, place an incredible spending burden on government, and encourage employers to drop coverage and dump employees on the government-run exchange. But the article also notes a problem that gets less attention — how the system punishes the middle class when they start to earn a little more:
Data is lacking on how damaging these perverse incentives are in practice. But it’s clear in Massachusetts that low-to-medium earning families often suffer financially if they get a raise, work overtime, move to a higher paying job — or if a spouse rejoins the workforce. For example, a family earning $33,000 pays no premium at all under Commonwealth Care. But if their pay goes to $46,000, they’re obligated to contribute about $2,400. That’s an effective tax rate of 18.5% on that $13,000 raise. A pay increase of $44,000 to $46,000 is mostly erased by higher premiums alone.
The federal bill is plagued by the same weakness. For example, a $55,000 earner contributes $4,400 a year towards insurance. At $65,000, the bill is $6300; so the family is paying a “tax” of $1,900 or 19% on that $10,000 raise. After payroll taxes, those Americans would face a marginal rate of around 35%, a number that’s heretofore been the territory strictly for high-earners.
Such distortion of incentives can have absolutely devestating consequences for the economy. And people wonder why I’ve been critical of Mitt Romney, and skeptical of his conservative credentials and claims to have been a great governor.
View all comments (6) | Leave a comment
More Blog Posts by Philip Klein
http://spectator.org/blog/2010/06/17/how-romneycare-punished-succes
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Gold BC| 6.17.10 @ 11:22AM
This is an age of paradox. Romneycare served as the blueprint for Obamacare. Also today's prime mover for electing non-establishment conservative candidates, the Tea Party movement, issue wise is opposed to Obamacare hence Romneycare and therefore theoretically Romney. Yet Romney, deemed economically competent is the frontrunner for the 2012 GOP nomination and would be favored to win the election. People vote their pocket book and a bad economy trumps all and will probably pave his way to White House.
John - TMF| 6.17.10 @ 11:51AM
There is no further evidence for the Establishment GOP's total abandonment of a summer and fall political campaign based on a repeal Obamacare Monster, than Mitt Romney (their candidate of anointment).
Romney is; not a Conservative neither social nor government. He is a standard Yankee Establishment Republican of the Warren Rudman, Lincoln Chaffee, Susan Collins, William Weld, Olympia Snowe mold. They are not RINOs, please... They are OLD BLOOD Country-Club Republicans from a region where the difference between the GOP and the Democrats was and is SOCIAL CLASS (Not rich or poor, but family ancestry ) -- period.
Romney will say anything and espouse anything that gets him elected to the seat of whatever power table that he feels entitled to. If it takes mouthing Social Conservatism.... so be it. If it takes talking small government.. ok he will say that too... Balanced budgets, taxes, economics are all up for grabs. Whatever is "said" today will become "inoperative" tomorrow when circumstances change.
You can't play if you don't win.
If the GOP actually really honestly wants Obamacare repealed and a responsible intelligent Constitutional free market based system substituted in its place, then Mitt Romney is the wrong man at the wrong time.
Romney would, of course be better than Obummer... but compared to -20, one is a large number. The assertion of the Mittster's superiority is of little comfort.
The GOP needs to break the pattern of nominating the last loser. It only worked well once, and Romney isn't Reagan he isn't even George H.W. Bush.
If we are to slay the Monster we need someone else.
r/The Mighty Fahvaag
Michael L. Hauschild| 6.17.10 @ 1:41PM
TMF,
Romney is a triangulating weasal of Clinton's ilk. He could not even out RINO McCain. Thank the Lord that there is an intermediating short cycle before we have to bear the brunt of Mitt throwing another $40,000,000 (four times what the Unions threw at Lincoln) at our senses. 2010 will be a bellweather year, name us what you will but there are many like me who will not be swayed, by Wall Street, from a SoCon pulpit, by National Committees or the connected elite.
Phil S.| 6.17.10 @ 2:36PM
The $2,400 figure for the cost of insurance in Massachusetts is inflated by 23%. The true number is $1,840. As you earn more in Massachusetts, you get a smaller subsidy. Makes sense to me.
Taxpayer| 6.17.10 @ 2:38PM
Romney is a RINO's RINO. He consented to the Mass. HC debacle. He is not to be trusted.
Nobama| 6.17.10 @ 3:14PM
RomneyCare/ObamaCare---What's the difference?
If Stupid Party Republicans run this RINO clown in 2012 we deserve what we get.