Thanks to Obamacare, Getting a Raise Could Cost You $12,000

Last updated: March 26, 2017

Dateline: Munich, Germany

In 1884, Prince Otto von Bismarck of Germany instituted the modern world’s first socialized medicine program. He called it “compulsory national health insurance”.

Like all politicians then and now, Bismarck had his reasons. As a staunch opponent of communism, the Prince designed his health care program as a bread and circus to keep the people happy and opposed to communism.

It was the worst of all worlds; “nationalistic socialism” that propped up big government to support crony interests and keep the ruling class in power and the people quiet.

Basically, adopting socialism to fight socialism. The old world version of passing the bill to know what’s in it.

As you might expect, government-run health care in Germany cost more than the private insurance it replaced. Quality of care was worse. The people hated it.

This nationalistic socialism did, however, pave the way for decades of a highly militarized Germany that brought about the rise of Hitler. But for some reason, modern Germany and almost all of Europe follows this failed model.

Across the pond, US persons are learning this lesson the hard way. The “middle class”, upon which praise is heaped constantly, complain that their taxes are too high despite demanding more and more free goodies from the government.

So it should come as no surprise that Janice Riddle was… well, taken by surprise… when she recently got a letter demanding she pay back her Obamacare insurance subsidy.

Riddle was out of work when she applied for Obamacare. As a result of her low income – in this case, $0 – she received nearly $500 a month in subsidies, resulting in a total premium of $1.

The rest of the suckers paying US taxes picked up the tab.

For some reason, once she got a job, Riddle figured she could continue to use her heavily subsidized plan. So she kept paying the premium of $1 until she got a letter from the IRS saying that changes in her income required her to pay back the subsidies. All of them.

The media is now in knots over the fact that Riddle had to “dip into her savings” to pay back the taxpayers, bless her little heart.

And she’s not the only one.

As with anything related to big government, taking “free money” from Uncle Sam has strings attached. The electorate has been sold the bill of goods that government will take care of them, all while the rest of us pay the bill.

Sadly, the rest of us are paying the bill in terms of inefficiency caused by the government’s involvement in health care. But few are getting a free ride.

How Obamacare has bankrupted some people

Signing up for Obamacare requires applicants to project their annual income. If you’re a clerk at the local Victoria’s Secret, this might not be that difficult. If you’re a commissioned salesperson or an entrepreneur, it can be nearly impossible.

As usual, the government’s one size fits all mentality makes things nearly impossible for anyone who falls outside of the nice little lines they wish everyone would fall into. You should know by now that being an entrepreneur in the United States is a raw deal.

If you predict your income incorrectly when applying for Obamacare, the penalties can be as bad as not applying in the first place.

For example, changes in income due to getting married, having a child, working more hours, or getting a raise, can cause you to be penalized.

The government can pull the ultimate bait-and-switch on you: tell you that you’re eligible for an Obamacare subsidy at the beginning of the year, and then demand it all be repaid at the end of the year because you earned “too much money”.

Set aside the fact that any country that accuses its citizens of “making too much money” is no place you or I should want to live. Try telling people in China that they’re making “too much money”; they’ll laugh in your face.

The deeper issue here is that the government can ruin the finances of anyone who doesn’t predict their income for next year with complete accuracy. One US tax preparation firm suggested that 53% of taxpayers will have to repay an Obamacare subsidy this year.

Since most US persons have little in the way of savings (causing me to wonder what makes the country so “rich”), such a demand from the IRS could be disastrous.

Imagine millions of Americans receiving nasty-grams in their mailbox to send a few thousands dollars to the tax man, all due upon receipt.

In one particular case, a guy had to repay $12,000 in Obamacare subsidies received because he got a raise during the course of the year.

Yes, in the United States, the government actively discourages people from getting raises. Perhaps that’s why none of the top ten jobs in the United States almost all pay quite poorly. It’s a sign of things to come, sadly.

This also is part of a transformational shift in the way the United States does business. Getting raises, creating jobs, earning sales commissions and bonuses, and being successful in general are now determined to be bad things.

The US government lured the electorate in with the promise of free and cheap health insurance that they didn’t have to take and wouldn’t lose. Now, people who have lost their subsidies are saying they can’t afford the “real” rate of insurance, even if the subsidy was merely reduced.

This is how the government bankrupts its population. Like the classic frog in the pot, they start with rosy promises, and quickly devolve into threats and money grabs.

If the government who claimed it was going to insure all Americans at record low costs can’t even be trusted to keep that promise, what makes you think it will keep its promise that your retirement account or other assets will be safe?

Eventually, the electorate will rise up again and demand that your money be taken so that they can have TRULY free health insurance without the hassles of having to tell the government when they get a raise.

That’s why moving part of your money to safe offshore jurisdictions is a highly prudent move when your home country is descending into socialistic tendencies. Personally, I think getting out of the United States where Obamacare does not apply to you is one of the smartest moves you can make.