ObamaCare and the Unemployed

click on graphs to enlarge

 

Over the past five years we have learned to not pay much attention to the government's official unemployment rate – U3 - the proportion of the civilian labor force that is unemployed & actively seeking employment.  The unreliability of this measure has always been true but in normal economic times U3 would suffice to give an accurate portrayal of the health of the job market.  It breaks down in severe economic conditions like BO has induced on America the past five years.

 

Even though I have found U6 to be the most comprehensive measure of labor resource unemployment & underemployment available I have recommended that the Bureau of Labor Statistics (BLS) add a U7 category.  U6 includes the total unemployed, plus all persons marginally attached to the labor force including discouraged workers who have stopped looking for work, plus the people working part time who want full time employment.  My proposed U7 would include all of U6 plus those employed full time who make a fraction of their former pay.  U6 & U7 give the most complete picture of those relying on their wealth spend down to live on which is an excellent measure of the unhealthiness & misery of the economy.

 

The BLS provides more than enough employment data every month & I know many in this readership pour over it.  For November U3 was 7% & U6 was 13.2%.  The civilian noninstitutional population increased by 608,000 in the past quarter & the civilian labor force shrunk by 192,000 during this same time.

 

The above two graphs provide further insight.  The graph on the left shows that the long term unemployed – 27 weeks or longer – has hovered around 40% of those unemployed for well over four years.  These are the people that may never work again especially if they are over 50.  The graph on the right shows a higher percentage of the unemployed have dropped out of the labor force than found a job each rolling quarter for the past four & a half years.  This is a new phenomenon that was not observed from 1967 until it started as shown on the above graph.  Source – The Roosevelt Institute. 

 

Obtaining healthcare insurance under ObamaCare is an added complication for the over 20-million people who fall under the U6 unemployment classification as well as those who have jobs but are working for a fraction of their former compensation with no benefits.  It is also no bargain for many who have maintained uninterrupted employment the past five years.  Nearly a third of the previously unemployed who found jobs in November were in the leisure & hospitality field with an average weekly wage of $351.26 & the retail field with an average weekly wage of $520.42.  Source – BLS.

 

Now when most who are in the U6 category choose to sign up for healthcare insurance under ObamaCare they most likely will be eligible for the expanded Medicaid program – the taxpayer paid (free) joint federal-state healthcare-insurance program for the poor & disabled.  But even this comes with two problems.

 

The first problem is that only about half the states are participating in the Medicaid expansion meaning that the unemployed or underemployed in those states will have to sign up relying on subsidies to cover the costs of the healthcare insurance plan they select.

 

The second problem is that the ObamaCare website may not be processing people who qualify for expanded Medicaid because the website is not able to transfer Medicaid applications to the states for verification & logging the applicants in accurately.

 

In addition to people in the U6 category employed people's troubles start when enrolling in ObamaCare when they learn their unsubsidized premiums can be as much as 2% to 9.5% of their income (actually IRS defined modified adjusted gross income) for people between 100% & 400% of the federal poverty level & their annual maximum out-of-pocket costs can total $6,350 for individuals & $12,700 for families – not cheap by many people's standards who could wonder where they will get this type of money. 

 

People whose income falls between 100% & 400% of the federal poverty level ($11,490 to $45,960 for individuals) qualify for subsidies known as Advanced Premium Tax Credits & people whose income falls between 100% & 250% of the federal poverty level ($11,490 to $28,725 for individuals) may be eligible for Cost-Sharing Reduction Subsidies which can help lower deductibles, copayments, coinsurance, or any other costs the insured is required to pay.  More rules - In order to receive Cost-Sharing Reduction Subsidies the insured must purchase a Silver plan on the Exchange.

 

It was about two months ago that Tammy Bruce first alerted everyone to the problem of the high deductibles of the ObamaCare Bronze plans (generally the plan with the lowest premiums) – typically deductibles in the $5,000 range before the plan would start to pay.  People are finding that what they thought was going to be insurance that covered teeth cleanings & routine eye examinations is really insurance with several thousand dollars of deductibles meaning it is not really what they were hoping for @ all – they are paying something for nothing as far as they are concerned.

 

The purpose of insurance is to protect the insured from a catastrophe they cannot afford to pay for themselves.  Over the years as the entitlement state has grown in America & people got more & more use to thinking they are not paying for anything themselves insurance has come to mean every routine healthcare maintenance item imaginable.  In this sense it is ironic that for many people the policies listed under ObamaCare are more in line with the classic definition of insurance than the free no-charge plans people envisioned when they were totally for the law.

 

BO has brought the country further toward destruction in five short years than we could have ever foreseen.  It has now become obvious that ObamaCare will take additional money from an already strapped citizenry whether through tax payments made to cover people under Medicaid or by direct payments by people who cannot afford them for premiums & deductibles or tax-fines for not signing up.

 

Compelling people to participate in such a program described above is just another deprivation of our personal freedoms that may ultimately be BO's undoing – if there is any fight left in us @ all.