This idea is, to many liberals, perverse. It means that Ryancare doesn’t give the neediest families enough help to afford decent insurance while blowing a substantial chunk of change on families who don’t really need much help.
.. One school of thought holds that a major problem with the Affordable Care Act is that it creates a structure where a hypothetical near-poor person has very little financial incentive to increase his labor market earnings. Ryan’s American Health Care Act restructures the subsidies in a way that doesn’t accomplish anything from a health insurance point of view, but does directly address this labor market issue.
.. But Ryan has a pretty consistent and somewhat metaphysical theory of poverty whereby helping poor people by directly providing them with additional material resources doesn’t count. What he wants is for the government to help poor people become more like middle–class people and raise their labor market earnings.
Hence, in Ryan’s view, all means-tested benefits create what he calls a “poverty trap,” where the existence of benefits reduces the incentive to bootstrap your way up the income ladder.