It’s been something of a task to make sense out of the all implications of the Supreme Court’s ruling on Obamacare yesterday, but here’s one that most have missed. If things stand as they are, the Affordable Health Care Act is poised to create a new sort of welfare queen—poor women who are compelled to have children to avoid federal penalties (or taxes, I guess) and to receive healthcare benefits.
If you are confused, let’s start with Gov. Bobby Jindal’s appearance on The O’Reilly Factor last night. Laura Ingram was filling in for O’Reilly on the show, in which Jindal made it clear that Louisiana would not be implementing medical exchanges under the new law:
Obamacare requires states to set up their own exchanges—systems in which private insurance compaines are tasked with managing Medicaid patients—or have new Medicaid patients, under guidelines to be implemented in 2014, absorbed into federal exchanges. Earlier this year, Louisiana implemented Bayou Health–an exchange to transfer current Medicaid patients into a network where their care could be managed by one of five private insurers with the goal of reducing healthcare cost.
Under Obamacare, single people with taxable income—roughly $15,000 or more annually—could be covered under Medicaid. The Supreme Court has ruled, however, that states don’t have to comply with the Medicaid expansion and they won’t. They simply can’t afford to.
In Louisiana, for instance, it would mean hundreds of thousands of people being added to Medicaid roles right off the bat, not including an estimated 233,000 additional people who would lose their private insurance because they simply won’t be able to afford higher premiums or would have their employers dump their healthcare coverage.
Businesses will find it cheaper to pay the $2,000 per-employee annual tax—imposed on workplaces with more than 50 employees– for not providing healthcare plans than the plans. These workers will eventually end up being covered under Medicaid. If people with an annual income exceeding $15,000 per-year didn’t want to be covered by Medicaid, they could just avoid Obamacare taxes by purchasing private insurance—which they won’t do.
Even with taxes going to 2.5 percent of income per-year by 2016, it will be much cheaper for middle class people to pay the tax than to pay insurance premiums, which averaged over $2,000 for a single person last year. Since Obamacare mandates that insurance companies must accept people with pre-existing conditions, they would be fools to not wait until they are sick before buying private insurance for coverage.
But here is where things really get interesting.
The Supreme Court’s ruling on the state Medicaid provision means that some of the poorest among us will be taxed—by 2.5 percent of their annual income—and have no healthcare coverage. The states can’t afford to expand Medicaid to absorb them and don’t have to. In Louisiana, and most other states, if you are a young single man or woman (without dependent children in a woman’s case) you are generally ineligible for Medicaid. You will be taxed with no coverage.
So, there is really only one alternative for a lower-income, young single woman to avoid paying a tax she can’t afford or be forced to buy private healthcare she can’t afford—have kids. That way she will be covered under Medicaid, avoid taxes, and receive healthcare to boot.
Are you getting this? This is worse than the welfare queen, who could receive checks indefinitely by having kids before the reform of the Clinton-era.
If you are a poor, single woman minding her own business, the IRS—as the enforcement arm of Obamacare—is coming after you for tax evasion if you can’t afford the mandates. That is, unless, you don’t get busy having illegitimate children.
Welcome to Obama’s world of hope and change…