How Obamacare is Cutting Your Salary -- And Your Vacation Budget
http://www.thestreet.com/story/1342...r-vacation-budget.html?puc=yahoo&cm_ven=YAHOO
Economic reality is catching up with the Affordable Care Act, aka Obamacare, according to two recent reports.
The problem is that while acts of Congress can be repealed, the basic laws of economics cannot. In this case, the law in question is one that most students are taught on the first day of economics class: There is no such thing as a free lunch. Someone always pays.
Obamacare is proving no different. First, people with employer-based health insurance are paying in the form of lower salaries because of the extension of coverage to dependent children through age 25.
"We find evidence that employees who were most affected by the mandate, namely employees at large firms, saw wage reductions of approximately $1,200 per year," states a January-dated report from the National Bureau of Economic Research.
That's $1,200 per year that employees would have received if it not for the implementation of Obamacare, according to the report.
The Incidence Of Mandated Health Insurance: Evidence From The Affordable Care Act Dependent Care Mandate, by Gopi Shah Goda and Monica Farid, both from Stanford University, and Jay Bhattacharya of Harvard University, examined income data from the U.S. Census Bureau for August 2008 through March 2013. That includes 19 months before the healthcare law was passed as well as 37 months of Obamacare.
"These reductions appear to be concentrated among workers whose employers offer employer-sponsored health insurance; however, they do not seem to be only borne by parents of eligible children or parents more generally," the report says.
In other words, the childless are subsidizing those who have kids.
To put the $1,200 in perspective, it represents an extra 2.2% annual raise for the median household income in the U.S., which was $53,657 in 2014, according to the St. Louis Federal Reserve.
A second report is no less worrying. It indicates the ACA is upending one of the long-standing realities of the U.S. consumer. Typically, when gasoline prices fall, consumers have more money in their pocket at the end of the month, money they might spend on luxuries or so-called discretionary items.
Not so much this time -- even with fuel prices dipping under $2 a gallon on average across the U.S.
"A notable uptick in healthcare spending linked to Obamacare is eating into many of the gains linked to lower prices at the pump," according to the report, published by the KKR Global Institute. More simply, Obamacare is immediately taking away some of the cash that lower fuel prices are returning to consumers.
(More at above url)
http://www.thestreet.com/story/1342...r-vacation-budget.html?puc=yahoo&cm_ven=YAHOO
Economic reality is catching up with the Affordable Care Act, aka Obamacare, according to two recent reports.
The problem is that while acts of Congress can be repealed, the basic laws of economics cannot. In this case, the law in question is one that most students are taught on the first day of economics class: There is no such thing as a free lunch. Someone always pays.
Obamacare is proving no different. First, people with employer-based health insurance are paying in the form of lower salaries because of the extension of coverage to dependent children through age 25.
"We find evidence that employees who were most affected by the mandate, namely employees at large firms, saw wage reductions of approximately $1,200 per year," states a January-dated report from the National Bureau of Economic Research.
That's $1,200 per year that employees would have received if it not for the implementation of Obamacare, according to the report.
The Incidence Of Mandated Health Insurance: Evidence From The Affordable Care Act Dependent Care Mandate, by Gopi Shah Goda and Monica Farid, both from Stanford University, and Jay Bhattacharya of Harvard University, examined income data from the U.S. Census Bureau for August 2008 through March 2013. That includes 19 months before the healthcare law was passed as well as 37 months of Obamacare.
"These reductions appear to be concentrated among workers whose employers offer employer-sponsored health insurance; however, they do not seem to be only borne by parents of eligible children or parents more generally," the report says.
In other words, the childless are subsidizing those who have kids.
To put the $1,200 in perspective, it represents an extra 2.2% annual raise for the median household income in the U.S., which was $53,657 in 2014, according to the St. Louis Federal Reserve.
A second report is no less worrying. It indicates the ACA is upending one of the long-standing realities of the U.S. consumer. Typically, when gasoline prices fall, consumers have more money in their pocket at the end of the month, money they might spend on luxuries or so-called discretionary items.
Not so much this time -- even with fuel prices dipping under $2 a gallon on average across the U.S.
"A notable uptick in healthcare spending linked to Obamacare is eating into many of the gains linked to lower prices at the pump," according to the report, published by the KKR Global Institute. More simply, Obamacare is immediately taking away some of the cash that lower fuel prices are returning to consumers.
(More at above url)
