Is ObamaCare Good For The Middle Class?

October 08 01:00 2015 by ushadmin

Apparently not. For every person who has obtained insurance in the (Obamacare) exchanges, there are two other eligible people who have not enrolled. We now have a good idea why that is.

When people who were previously insured in the individual market obtain insurance in the exchanges, on the average they are worse off. And here is a surprise. When the previously uninsured obtain insurance in the exchanges, they are also worse off.

For the previously uninsured, out of pocket costs for medical care go up — even after the federal subsidies. On the plus side, they do consume more medical care once they are insured. And there is some value in the risk reduction insurance provides. But these advantages are not enough to offset the financial loss for almost everyone above 250% of the federal poverty level. Even the Obamacare mandate’s threatened penalties are not enough to make Obamacare insurance attractive to the vast majority of the uninsured middle class.

That’s the conclusion of a new NBER Working Paper by Wharton School economists Mark Pauly, Adam Leive and Scott Harrington. The conclusion is consistent with the evidence on enrollment. About 83% of people obtaining insurance in the exchanges have incomes below 250% of poverty and above that level enrollment drops off sharply as income increases. (See the chart below.)…