Obamacare’s Potential Disincentive to Work
Posted at 8:04 a.m. on Feb. 11
Matthew Yglesias observes that there is one way in which Obamacare’s design could make work less likely.
The way is “that means-tested benefit programs operate as a de facto income tax. The boss asks you to pick up an extra shift per week. So you do the math. The bad news about working the extra shift is that you’ll have to spend more time at work … But the value of that extra money is partially rolled back by the reduction in premium subsidies.”
“Those impacts are genuinely worth worrying about … Eliminating the phase-outs would make the program much more expensive. When it comes to programs that are currently structured to avoid work disincentives … conservatives generally offer the criticism that it is wasteful to be spending so much money on welfare state programs for [the rich].”