2013
From a Wall Street Journal article October 4, 2014
Among the consumers who were able to enroll is Leslie Foster, a 28-year-old freelance filmmaker in Hollywood. Mr. Foster made his choice at about 10 a.m. Wednesday. He said he would have to pay $62 a month for his Health Net plan, “a great deal.”
The total monthly premium is $213.68, according to Mr. Foster’s online confirmation page. But because he earns only about $20,000 a year doing freelance videography and odd jobs, he qualifies for federal subsidies that will cover more than $150 of those costs.
So here is my question. Is this a great deal for taxpayers? Mr. Foster presumably chooses to be a freelance videography (for a non-profit) and to do odd jobs. Because of that choice he has a low-income. Because of that low-income, he now receives more than $150 per month in subsidies.
We tend to think of low-income Americans as poor people who are victims of circumstances. In reality, some low-income people choose to follow their dream, elect a less stressful lifestyle or whatever and as a result live in part off the hard work of the rest of society. The problem of course is society does not make any distinction and rather we only look at the end result of choices people make. Doesn’t this simply encourage those who are happy to take the easier, less trodden path?
History shows us that large numbers of citizens in any society simply do not pull their own weight. The lasting problem is how much of that load must be pulled by others.
I guess this is the difference between the liberal and conservative view of the world. The liberal view tends to ignore the causes of ones circumstances while the conservative view expects the individual to do something about the causes before society intervenes.
By the way, if you are curious about Fosters low premium, his plan has a $2,000 annual deductible and a $45 office visit co-pay.
As Benjamin Franklin said:
I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I travelled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer. – On the Price of Corn and Management of the Poor (29 November 1766)
QUINNSCOMMENTARY 
Dick…I have to take issue with you on this one. “Why should taxpayers subsidize a life choice made by someone who chooses to engage in employment with no health benefits and low earnings?”
We could also say, “Why should taxpayers subsidize those who are employed by an employer who provides health insurance benefits?”
Someone who receives health insurance from an employer pays no tax on the value of the benefit. The employer lowers his tax exposure by claiming the cost of providing health insurance as a business expense. Employer provided health insurance is the most expensive tax expenditure to the federal government. A tax expenditure is actually spending through the tax code and in this case, it is spending to provide a subsidy to those who get health insurance from an employer. In the interest of disclosure I will tell you that I have always had employer provided health insurance in my working years and am now on medicare. The fact that I am on the receiving end of a taxpayer provided subsidy doesn’t blind me to the inequity of the system where some are subsidized and others are not. I am against Obama care because I think it is the wrong way to fix flaws in the system and the negative effects it has on the economy. I think a better way was floated during Senator McCain’s primary run. Health benefits should be taxed as income and the additional revenue used to provide some basic subsidy to those without employer provided health care.
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I don’t disagree with you in principle. I am all in favor of a gradual phase out of tax-free health benefits thereby putting everyone on an equal footing or putting a cap on the amount. Why not start by eliminating pre-tax premiums which really seems unfair and a bit redundant.
But I see subsidizing people who make life choices at the expense of others a different issue. That is equally unfair in my opinion.
A real dream is that additional revenue from changing the tax status of the employer contribution would be used productively.
Dick
Richard D Quinn
Blog http://www.quinnscommentary.com Twitter @quinnscomments
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I was just thinking of another point. Let’s say the tax free status of the employer contribution was changed to taxable. That still leaves us with the tax subsidy for the people I mention.
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