How Obamacare Screwed The Stuges

This is the story of John and Mary Stuge, an older couple from Lohangen Groves, Florida, a small town just west of Mommunnie. John and Mary own a cleaning and painting business. It's a small business. They have no employees. In a typical year they earn around $57,000 a year, about the median income for American households.

At age 63, John has had some minor heart problems, so before Obamacare came in, John could not get health insurance. Then last year he was able to buy insurance through the Federal Marketplace in Florida, thanks to the ACA- Obamacare.

The Stuges could get a silver plan from Humana, the lowest cost provider in Florida, but the cost was still $857 per month, far more than they could afford. Because their income was below $62,000 they were eligible for a Federal subsidy. That subsidy reduced their monthly cost to $170 per month. Even though they usually spent every penny they earned just paying the bills to get by, by cutting back on eating at restaurants and a few weekend rounds of walk-around golf at the local municipal executive course, they could afford the subsidized rate.

Toward the end of last year John and Mary got a contract to paint a small office building for a company. That contract paid the Stuges $10,000. Even though it was a lot of extra work on nights and weekends, they were happy for the extra income.

Like Tim Geithner, the Stuges use TurboTax to file their tax returns. They sit down with all their paperwork in early April, and do their return together on their 4 year old PC. Then they file electronically. Because the Stuges are careful to pay their estimated taxes each quarter, they can usually look forward to a small refund.

Going through the return and answering the questions from TurboTax carefully, after their deductions and exemptions the Stuges' adjusted gross income was $42,000 on a gross income of $66,000. Great, they thought. They had paid about $10,000 in estimated taxes and were looking forward to that nice refund.

But this year it was not to be. You see, there was a problem with that health insurance John bought through the Federal marketplace.

After finishing the income and deductions portion of the TurboTax program, they got to a section on health insurance. The software explained that since they had gotten insurance through the new insurance exchanges, they had to fill out a new form, Form 1065. Turbotax asked them a few questions about their monthly premiums.

When the program was done with those questions, the Stuges were in for a big surprise. It turned out that not only would they not get a refund, but they owed the Federal Government money to repay the subsidy they had received! That cleanout contract they got late in the year had pushed their gross income above the subsidy limit of $62,000 for a couple. That meant that they had to repay the government for every penny of the $8,250 in subsidies that they had received to pay for their health insurance!

Where would the Stuges get the money? Since that $10,000 contract would not be repeated, John and Mary knew that they could not pay the money back. The Federal Government would have to put a lien on their house to collect the debt. But thank goodness they lived in Florida. Their homestead is exempt from liens by state law. The Feds would have to wait until the Stuges started getting social security, so that it could garnish that to claw back the insurance subsidy. At that point, there's nothing the Stuges could do about it. They'll be stuck.

John and Mary Stuge of Lohangen Groves, Florida, just west of Momunnie, just got screwed by the age old tactic of bait and switch. And who was the lowlife con man who suckered them? Why, the Federal Giverment itself.

Obamacare--what it pretends to give, it takes away with a pound of flesh from those who can least afford it.

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