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A No-Growth Obamacare Christmas?

Obama's "signature achievement" may help bring growth to a halt even before it takes effect.

by
Tom Blumer

Bio

November 4, 2013 - 12:40 pm
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Middle-income and upper middle-income professionals and self-employed persons comprise much of the individual market. They are now being forced to choose between either purchasing far more expensive coverage through their state exchanges containing coverage they neither want nor need, or doing without health insurance entirely and paying a tax penalty. Additional millions of Americans who have chosen to be uninsured until now are facing the same choices. In California alone, according to the state’s Covered California exchange, this will affect about 2.7 million people who will receive no Obamacare subsidies to cushion the impact:

CalHealthInsIndivMarketImpact

A March outside study commissioned by Covered California estimated that average monthly Silver and Bronze plan premiums for affected individuals across all age groups would be $450 and $386, respectively. That’s supposedly a 20 percent average increase for those who are currently insured, and $386 to $450 the currently uninsured haven’t been spending at all.

People who know they will have to spend hundreds of dollars extra every month on health insurance starting next year won’t wait until next year to sharply curtail their spending. They’ll start the minute they learn the bad news, taking billions away from November and December retail sales. Meanwhile, those who will supposedly be saving money on health care thanks to subsidies won’t change their spending habits until the lower premiums take effect in 2014.

It would only take $4 billion in reduced monthly spending by affected individual plan households each month with a Keynesian multiplier of 1.75 to clip a half-point from the nation’s $1.4 trillion monthly gross domestic product — and most forecasts for fourth quarter GDP were at 2 percent or below even before the ADP report and a recent dive in consumer confidence were known. There is also an undetermined number of people in “small group employer plans” who are seeing their plans terminated, and whose impact will only compound the damage.

Suddenly, thanks to the accumulated effect of years of poor economic policy choices combined with the sticker shock of Obamacare, no GDP growth in the fourth quarter is within the realm of possibility.

Merry Obamacare Christmas.

(Artwork created using a modified Shutterstock.com image.)

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Along with having a decades-long career in accounting, finance, training and development, Tom Blumer has written for several national online publications primarily on business, economics, politics and media bias. He has had his own blog, BizzyBlog.com, since 2005, and has been a PJM contributor since 2008.

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Top Rated Comments   
Nothing grows until he goes.
47 weeks ago
47 weeks ago Link To Comment
/SARCASM ON

Obama has achieved what so many thought impossible: the end of the "boom and bust" economic cycles. It's going to be BUST FOREVER. Long live our wise and fearless Great Leader!

/SARCASM OFF
47 weeks ago
47 weeks ago Link To Comment
All Comments   (29)
All Comments   (29)
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46 weeks ago
46 weeks ago Link To Comment
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46 weeks ago
46 weeks ago Link To Comment
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46 weeks ago
46 weeks ago Link To Comment
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46 weeks ago
46 weeks ago Link To Comment
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46 weeks ago
46 weeks ago Link To Comment
...and don't forget, the BILLION $ just spent on the website went to 'connected' companies, one of which was turned down for a gubmint contract before, complained and got a contract for part of the programming. I suppose that if I contributed heftily to Obama's re-election, I'd want some payback as well. And speaking of payback, LOL, the gubmint just decided that health care providers were exempt from being prosecuted for 'pay backs'. Read all about it folks. The law is only for those who oppose the Obama administration. Obama's friends can do as they like and get away with it as does Obama. Long live the 'King'. sheesh.

Coeurmaeghan in Twentynine Palms, CA
46 weeks ago
46 weeks ago Link To Comment
OK, sorry, 'The IRS could have been given that 3 BILLION $ ', should of course have read 1 BILLION $. I should proofread my comments more closely. Thank you for your patience.

Coeurmaeghan in Twentynine Palms, CA
46 weeks ago
46 weeks ago Link To Comment
...and I STILL don't get it. Unless one is afraid that giving everyone free insurance or health care would be too socialistic, which the administration is constantly being forced to deny they are, it seems to me that the money spent on the web page(s) for just signing up would have done that admirably. Almost a BILLION $ spent just for the web site alone. With a population of approximately 330 MILLION, couldn't they have spent that money easier, since the IRS is already in charge of re-embursing overpayment of taxes (refunds). The IRS could have been given that 3 BILLION $ and either given everyone 3 million $ or bought healthcare for everyone. Please someone explain my faulty reasoning because I just don't get the waste inherent in having the gubmint in charge of making a website, much less our healthcare.

Coeurmaeghan in Twentynine Palms, CA
46 weeks ago
46 weeks ago Link To Comment
President Obama, fundamentally transforming America one (lost) job at a time.
47 weeks ago
47 weeks ago Link To Comment
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46 weeks ago
46 weeks ago Link To Comment
my response to ACA aka Obamacare is this letter:

Dear economy,
I will not be stimulating you this coming Christmas season nor anytime soon. The government has MANAGED to tap me wallet dry and thus I'll be unable to participate in any purchases other than the most essential, which the Obama government has already MANAGED to skyrocket like food, gas and utilities...I guess this is what happens when you are MANAGED rather than FREE.
Yours down and broke,
Terry L. Newberry
47 weeks ago
47 weeks ago Link To Comment
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