Zero Cost PPACA (Obamacare) Plans

Back Door Man…

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I’m sure you’ve heard that the Senate version of the (creatively named) Tax Cuts and Jobs Act is now going to attack PPACA (Patient Protection and Affordable Care Act), affectionately (sic) known as Obamacare. But, if you don’t truly understand the intracacies of the bill, it will be difficult to discern how NOT collecting the tax penalty on those who don’t enroll in a health care plan can be used to reduce the deficit incurred by the behemoth of a bill.  (Sorry for all those negatives- but that’s the true concept.)

I won’t go over the justice of a bill that rewards the rich and businesses – and penalizes the poor and the middle class. Or, that most folks’ taxes  will actually rise 8 years from now (due to credit expirations), but the business tax cuts will last forever.

Nope. I’ll stick to this despicable attempt to hurt Americans and their ability to obtain health care. (Please remember that the President has already harmed many folks by refusing to pay the $ 7 billion reimbursement to insurance companies, funds that repay the expenses they are mandated to spend [with the promise of reimbursement] to provide discounted insurance to the poorer citizens of the US. And, that many states then let the insurance companies restate their insurance rates to recover those funds from the middle class folks who are looking for insurance and are not entitled to any discounted rates.)

The Senate is planning to repeal the mandate that US citizenry purchase health insurance. And, that means there will be no fine (collected via the IRS) imposed on these folks. The mandate stipulates that those who fail to obtain insurance shall be fined $ 695 a person- or 2.5% of household income (whichever is higher); that’s what some 7 million folks had to do last year (2016), according to the IRS.

Who pays the Individual Mandate Penalty?

This action lets the Senate offer corporate tax cuts, since the US will save $ 300 billion in funding insurance. Of course, at least 13 million fewer folks (this is per the US Congressional Budget Office, a non-partisan agency!) will have insurance- and the rest of us will have higher rates (the CBO estimates the rates will rise by at least 10%), as hospitals and care centers raise their rates to cover their uncompensated care costs.

I know, this concept of not collecting tax penalties saving the US money left me scratching my head, too!

So, how does this mandate erasure (with its attendant tax penalty) save money? That’s because many of those who had been impelled to purchase health insurance were eligible for the federal subsidies. Removing the mandate means fewer subsidies will be required.

(The Senate has intimated- but not included in the bill yet- that the child tax credit would be escalated from $ 1650 (in their version; $ 1600 in the House version) to $ 2000. But, that won’t make up for the increased insurance costs. They’ve also intimated that they will bring up the (Patty) Murray- (Lamar) Alexander bill at the same time- which reinstates the $ 7 billion reimbursement to insurance companies that the President refused to authorize earlier this year.  That also didn’t find it’s way into the approved committee release.)

Don’t be surprised if Senators John McCain, Susan Collins, and Lisa Murkowski will refuse to support this new provision. Just like their previous refusal to go along (and hurt the citizens in their home states) and, thereby, killed the PPACA repeal earlier this year.

Roy A. Ackerman, Ph.D., E.A.

It was 54 years ago today.  I remember exactly where i was- and where I stayed for 2 hours until his death was pronounced. Where my school held all the buses in the lot, waiting for us, until it was clear that our prayers would not receive the answer for which we hoped.  

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5 thoughts on “Back Door Man…”

  1. Australia has a system which is similar to a tax penalty (although i don’t claim to understand the intricacies). Public healthcare is available to everyone automatically (which would be nice if the US stepped up to the plate for, but obviously it’s easy saying that when we have a 10th of your population). But then you have the option of organizing private helthcare as well – which, is usually better funded, and you can get straight into private hospitals for elective surgeries, emergency etc without a wait.

    But if you don’t have private healthcare, come tax time you’re hit with a “levy” which is a % of your income. It’s really not unreasonable since it’s funding the public healthcare system, but also means that we don’t actually have “free healthcare”.

    1. Whether or not the penalty funds healthcare for others, the penalty is critical to make one recognize that (given that the US system no longer lets one be penalized fro pre-existing conditions) there is a cost to trying to game the system. To buy insurance only when one needs it.

      Thanks for your information about the Australian system, Megan.

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