If the devil is in the details, we got the motherlode this past week as to how the most incendiary part of President Obama’s health reform will actually work when it launches next January.
The Department of Health and Human Services issued lengthy rules on the controversial individual mandate requiring uninsured Americans to purchase a health plan. The IRS followed with nearly as lengthy a set of rules specifying who is eligible for subsidies for those purchases and who pays penalties when they refuse. In what critics will consider an Orwellian flourish, both federal agencies refer to these penalties as “shared responsibility payments” — even though the Supreme Court, in its upholding of the mandate, plainly referred to them as what they are: a tax.
The two sets of rulings represent a sort of good cop, bad cop routine from the Obama administration. The bulk of the HHS rules defines individual outs for the mandate, identifying 11 different types of uninsured Americans who will be exempt from the de facto tax, ranging from sudden financial impairment to genuine religious objection to medical care. The IRS rules are all bright hard lines about who has to pay, when, and how.
The major media, echoing criticism by Obamacare’s agitators from the Left, seized on the stinginess of the IRS rules regarding subsidies and penalties for family members of people covered by their employers, or what they call the “family glitch.” The glitch is technically real, but statistically remote, and will affect almost no one in the real world, but it does make for good inflammatory headlines.
Continue reading “Life Support and Taxes”
Filed Under: THCB
Tagged: Emergency Medical Treatment and Active Labor Act, family glitch, Health insurance, Health Reform, HHS, Individual mandate, IRS, J.D. Kleinke, Obama administration, Taxes, The IRS rules
Feb 7, 2013
The morning after Tuesday’s vote, there is one thing every commentator agreed on. The election of Barack Obama guaranteed that his signature piece of legislation — health reform — can now go forward. Republicans are powerless to stop it.
Yet there is something all these commentators are overlooking. There are six major flaws in ObamaCare. They are so serious that the Democrats are going to have to perform major surgery on the legislation in the next few years, even if all the Republicans do is stand by and twiddle their thumbs.
Here is a brief overview.
ObamaCare is not paid for. At least it’s not paid for in any politically realistic way. As is by now well known, the legislation will lower Medicare spending over the next 10 years by $716 billion in order to fund health insurance for young people. This reduction will primarily consist of lower payments to physicians, hospitals and other providers — reductions that are so severe that they will seriously impair access to care for senior citizens.
Continue reading “Did the Election Save ObamaCare?”
Filed Under: Commentology, OP-ED, THCB
Tagged: 2012 Election, Affordable Care Act, Health Insurance Exchanges, Individual mandate, IRS, John Goodman, Medicare, Obamacare, Preventive care
Nov 12, 2012
Healthcare reporters have been in a frenzy to report this week that the ACA is a done deal and states should get on with it. The election certainly changes the dynamic in the repeal effort, as Speaker John Boehner indicated in a recent interview with ABC News, yet the implementation battle is far from over.
The next interesting story line is developing out of an OK lawsuit pertaining to the legality of subsidies being made available in the federal exchange. To be more specific, it challenges an IRS rule that imposes an ACA employer mandate where the statute does not appear to authorize it. If this case were to prevail, it would undermine the “fallback” federal exchange that is going to be established for states that opt to forgo setting up their own state exchange.
Governors in SC, GA, FL, KS, VA, MO are on record that they will not set up a state exchange. Most believe, minus the Democratic Governor of MO since a ballot question prevents him from unilaterally setting up an exchange, that the subsidies will not be available in the federal exchange, and will put the federal government between a rock and a hard place.
The election results at the state level also play into this story.
Continue reading “Nine States to Watch for ACA Implementation”
Filed Under: The Business of Health Care
Tagged: ACA employer mandate, Affordable Care Act, federal exchange, Health Insurance Exchanges, HHS, IRS, John Boehner, Josh Archambault, state-based exchange
Nov 9, 2012
Ezra Klein is right. In a recent Washington Post column, the left-leaning policy wonk laid plain that the future of ObamaCare is at stake in next week’s elections. If President Obama wins and Democrats hold the Senate, the Affordable Care Act will survive. If Mitt Romney wins and Republicans take the Senate, the law is dead. It is the starkest of differences.
How likely is each scenario? At this moment Democrats have the advantage. According to Real Clear Politics, the president is running slightly ahead in six out of ten battleground states. He could actually lose seven of these, but still be reelected if he hangs onto Ohio, Wisconsin, and Iowa.
While key Senate races have tightened, such as Tommy Thompson in Wisconsin, Democrats have a slight advantage there too. If the elections were held today, Republicans would fall two seats short.
What would this future look like? Implementing ObamaCare would be accelerated. HHS and states will have less than fourteen months to finalize major provisions of the law before they take effect on January 1, 2014.
Thousands of pages of regulation will be released shortly after the election, on everything from IRS rules for employers to essential health benefits to covering pre-existing conditions. It remains to be seen how prescriptive these regulations would be.
State officials will have to submit a blueprint for their insurance exchanges by November 16th. They will need to decide if they will create and exchange and how it will be designed.
They will also have to decide whether to expand their Medicaid programs, and they’ll need to determine essential health benefits and benchmark plans for the insurance options to be sold through their exchanges.
Continue reading “Healthcare Law on the Ballot”
Filed Under: OP-ED, THCB
Tagged: 2012 Election, Affordable Care Act, David Merritt, employer-sponsored insurance, Essential health benefits, IRS, Medicaid, Obamacare, Real Clear Politics
Nov 2, 2012
Now that the Supreme Court has decided that ObamaCare’s mandate to buy health insurance is a tax, will the IRS be able to collect it?
Generally speaking, if you owe the IRS, it will get the money from you—with the possible exception of the ObamaCare tax. Though ObamaCare’s individual mandate imposes a tax on people who do not purchase government-approved health insurance, the law explicitly neuters the IRS’s ability to collect the tax.
Bizarre? Yes. And it matters. If policymakers expect uninsured young people to buy health insurance when it is even more expensive than it is today, the threat of serious consequences for not doing so must be real. Yes, the threat that the IRS might come after you if you do not do what you are told looks real at first glance. But Democratic politicians, fearing public backlash for making the mandate too intrusive, pulled its teeth.
First, the tax (nee penalty) is too small to matter to the people who are its target. In 2014, the tax will be the larger of $95 or 1 percent of taxable income for an individual. By 2016 it rises to $695 or 2.5 percent of income. Young people would not want to pay a dollar if they could avoid it, but avoiding the tax means signing up for insurance that many do not think they need. That insurance is not free. Even with subsidies, they will pay at least 3 percent of their incomes for premiums and up to 6 percent of the cost of the insurance in deductibles and copayments. That adds up to a lot more than 95 bucks.
Continue reading “Health Care’s New Rules: If You Don’t Buy Insurance, Will You Really Pay the Tax?”
Filed Under: THCB, The Business of Health Care
Tagged: Health insurance, Individual mandate, IRS, Obamacare, teeth
Jul 27, 2012