How ObamaCare reduces incentives to work

"We have to pass the bill so you can find out what is in it." -House Speaker Nancy Pelosi, March 2010

These infamous words take on a new meaning as we continue to discover more implications of the 2,800 page health care reform law, commonly referred to as ObamaCare.

Today in The Wall Street Journal, Daniel Kessler writes how ObamaCare impacts yet another part of our lives: it actually "punishes work." How?

Kessler points to the government-funded subsidies designed to Americans purchase health care coverage. With the onset of government-run health care exchanges in 2014, the cost of coverage will grow so much that government will offer subsidies to help citizens buy insurance. However, as incomes rise for individuals and families, the amount of their government subsidies will decrease. Kessler explains the damaging impact of such a sliding scale:

"Consider a wife in a family with $90,000 in income. If she were to earn an additional $3,700, her family would lose the insurance subsidy and be more than $10,000 poorer. In addition, she would also pay more in income and Social Security taxes. Taken together, these policies impose a substantial punishment on work effort."

In effect, the law will punish those who earn more. As the example above shows, families and individuals will all too often be incentivized to remain in lower income brackets to qualify for higher government insurance subsidies.

Kessler closes with this poignant question:

"For middle-income families, should economic success be determined by work and savings, or by participation in a government program?"

Is this what Congress was hoping to find when they passed the law?

Now Kentucky is in the business of 'ordering' private companies?

Kentucky's Insurance Commissioner Sharon P. Clark has decided that the decision by insurance companies in the commonwealth to discontinue the writing of new child-only policies because of increased regulations is unacceptable. So she's 'ordering' these companies to continue selling them.

This story is not new to the Bluegrass Institute. Jim Waters, vice president of policy and communication, reported on it in his statewide column last month. Waters quotes Peter Suderman of Reason Magazine: "Insurers are expected to both abide by new rules, which could prove costly, and not significantly change their prices or services in response to them."

So now what happens when companies wake up to see that the new health care reform will wreak havoc on their business? Kentucky's Insurance Commissioner forces her will to get her way.