Question

Suppose that a worker received $62,000 in wage at a job that also provides health insurance. A health insurance policy costs $8,500. The employee is considering moving to a job without health insurance, so she would have to purchase health insurance on her own. (Prices would still be the same, $8,500). Suppose she is in the 15% tax bracket at both jobs. At least how much in salary would the new job have to offer to compensate her for the loss in tax benefit when she moves to the new job? Show all work to justify the answer.

Answer 1

When Republicans talk about the supposedly dire effects of Obamacare, they often refer to health care premiums that keep on rising and many journalists have followed their lead in using premiums as a shorthand for health care costs. But that’s a serious mistake. Premium costs are only one component of total consumer costs. When considering whether proposals to replace the Affordable Care Act are viable or achieve their stated goals, their effects on cost sharing must be taken into account, too. That’s the proportion of health care spending by the consumer, as opposed to the insurance company. Since Republicans haven’t agreed on a single replacement health care plan, it’s difficult to compare the Affordable Care Act with well, whatever is to come. But all Republican proposals to replace or repair the ACA share a set of common elements. These elements would dramatically reduce the generosity of insurance, which would, yes, reduce premiums. But they would also increase consumers’ out-of-pocket costs, such as deductibles and copays, as well as their financial risk.

The ACA also subsidizes many consumers’ premiums through tax credits. The Republican plans would reduce those credits substantially for most people. Finally, the proposals would alter premiums by age, increasing premiums for older people and reducing premiums for younger people.Minimum wage violations, by definition, affect the lowest-wage workers those who can least afford to lose earnings. This form of wage theft causes many families to fall below the poverty line, and it increases workers’ reliance on public assistance, costing taxpayers money. Lost wages can hurt state and local economies, and it hurts other workers in affected industries by putting downward pressure on wages.

Strengthen states’ legal protections against wage theft, increase penalties for violators, bolster enforcement capacities, and protect workers from retaliation when violations are reported.